2024-05-13 28Hse Editor
After the new government took office, the government has taken much action to address the public’s concerns on land and housing, such as encouraging private property developers to participate in the construction of Private Subsidised Sale Flat and public housing. Recently, the Development Bureau has even considered a new mode of land tendering to speed up the construction works.
In recent years, the Government has been committed to the development of the Northern Metropolis area, which requires the use of some brownfield sites and private land for planning and development purposes, to substantially increase the supply of residential flats. From now to 2026, the Government expects to further reclaim 200 hectares of brownfield sites.
According to information released by the Development Bureau, the Government has recovered and cleared about 30 hectares of brownfield sites in the past few years, involving about 400 affected operators. In reclaiming brownfield sites, the biggest problem to address is how to rehouse these operators on the sites. This time around, a whopping 200 hectares of brownfield sites will be reclaimed, so the Government must have comprehensive planning.
To speed up development of multi-storey industrial buildings, the Development Bureau may invite tenders for uncompleted, so as to allow interested investors to enter the market earlier. The development period may be as long as one to two years. During development, the relevant parties will prepare building designs and financing, so that construction works can commence immediately upon the completion of land levelling, thus accelerating the development process.
There has been much news about new developments, and oversubscription often occurs – so is this plan feasible? In fact, whether it is or not depends on the developer's willingness to invest in land. In response to this, the Real Estate Developers Association of Hong Kong said that if the land is not levelled before bidding, it is more difficult for developers to understand the potential issues of the land and calculate construction costs accordingly, which may directly affect their willingness to invest.
Worst case scenario: If the scheme is unsuccessful, the developer can wait for the land to be levelled before putting it on the market. However, this will not accelerate the development process, effectively rendering useless the manpower and resources required in the tendering process.
Moreover, if the Government decides to adopt this mode of tendering, it has to iron out more details, such as whether compensation has to be offered to the developer if there is a delay in the processing time of the site and the land cannot be handed over to the developer on time; and how the discount rate is to be determined since the land cannot be used immediately, and so on. All of these factors will affect the developer’s decision.
Some people raise a thoughtful concern. Not all operators of brownfield sites can move into multi-storey industrial buildings. For example, some operators have large machinery which would be difficult to move into industrial buildings, so how is the Government going to deal with this? Some have suggested using greenfield sites as a buffer measure to rehouse brownfield operators affected by development.
The main functions of greenfield sites are to conserve Hong Kong’s natural environment and beautify the city. These sites serve as a buffer to protect the core ecological zone of the Hong Kong Science Park and should be carefully developed. If they are used for rehousing purposes, it is inevitable that there will be much objection, so the Government must weigh its options and handle the matter delicately.
Land supply and housing have been some of Hong Kong’s most pressing issues. These problems have existed for some time, and it will take more time to rectify them. The new government has been coming up with new ideas and proposals since it took office, and though we haven't seen results yet, having new ideas is could be the first step towards a better future.
Like 13
