Housing policy tops the agenda of the current-term Government. As the policy bureau responsible for land use planning, the Development Bureau has to deal with one of the most difficult parts of the problem - identifying land for development. The community is now well aware of the severe shortage of land for housing, commerce, industrial use, and community facilities in Hong Kong after discussions over the issue in the past few years. The public is also aware that the shortage was a result of the slow-paced land development over the past decade. Nonetheless, land shortage is a chronic problem and could not be solved in the blink of an eye. While the current-term Government’s determination and efforts to increase land supply are widely recognised, we must continue the uphill battle to make up for the lagging behind in land development and build up a land reserve for future.
We understand that there is room for improvement for the Government’s work. We have been listening to suggestions and criticism about land supply with an open mind and earnestness. There were allegations that we have not made good use of vacant government land, short-term tenancy sites, and other government land or abandoned land. In fact, we conducted a large number of land use reviews in the past few years and identified a considerable number of potential sites for different uses according to planning principles, and increased development intensity as appropriate so as to fully utilise our land resources. Although the Government is being accused of increasing land supply by “in-fill needle-type development” or “grabbing land blindly” from time to time, the efforts made by departments in identifying land with professional, objective and pragmatic approach and attitude deserves recognition.
However, there are still critics questioning the need for increasing land supply. They argue that there is no need to develop new land amid slowing population growth, plenty of vacant land and vacant flats, as well as a large number of brownfield sites and village areas across the New Territories, etc. I would like to point out that these arguments often arise from misunderstanding and are prone to fallacy as a result of being partial or overly simplified. Let me clarify the facts using the following examples and data.
(1) Hong Kong’s population increased by 9.1 per cent (about 610 000 persons) between 2000 and 2015. During the same period, the number of domestic households increased by 21.2 per cent (about 430 000 households) with an economic growth of 72.3 per cent. However, the area of built-up land only grew by 17 per cent, i.e. about 3 800 hectares, equivalent to about 1.4 times of the area of the Sha Tin New Town (excluding Ma On Shan covering an area of about 2 780 hectares, with a population of about 440 000 and about 150 000 domestic households). This figure is far lower than the 8 000 hectares of newly built-up areas developed in the preceding 15 years (i.e. 1985-2000). Apparently, our current land supply is mainly making up for the shortfall due to lagging behind in the past.
(2) Some people believe that given the slowdown in Hong Kong’s population growth in future, optimising the use of existing developed land is all we need do to accommodate the extra population. However, according to the estimates of the Census and Statistics Department (C&SD), Hong Kong’s population will grow by 13.5 per cent (around 980 000 people) between 2014 and 2044. Due to the shrinking average household size1, the number of domestic households will grow even faster and is expected to increase by 20.4 per cent (around 500 000 households), equivalent to about 3.3 times of the number of domestic households in Sha Tin. In other words, Hong Kong will have to increase our housing capacity by at least one fifth in the next 30 years, just to accommodate the additional households. This has not yet taken into account the some 90 000 subdivided flat tenants and about 290 000 backlogged applications for public rental housing.
(3) I also notice that some people suggested earlier that in view of the low birth rate in Hong Kong, there is no need to explore new land for developing new flats as long as we stop all immigrant inflow. In fact, even without new immigrants, with the average household size declining, the increased number of households will still result in housing demand. For example, the number of public permanent rental housing units had increased by about 14 per cent (about 95 000 units)2 between 2000 and 2015, while the number of people living in public rental housing remained more or less the same during the same period. It is believed to be related to the significant drop in household size (from 3.5 persons to 2.7 persons). According to C&SD’s estimation, the declining trend in average household size will continue.
(4) Moreover, prohibiting one-way permit holders coming to Hong Kong for family reunion is controversial. It will not only aggravate the problem of ageing population in Hong Kong, but also lacks an ethical or legal basis. As for suspending the admission of talents and professionals of all industries, it will affect Hong Kong’s global competitiveness and economic sustainability, and in turn making it more difficult to improve our overall livelihood. Indeed, Hong Kong’s workforce will begin to shrink in a few years’ time. Unless we significantly enhance our productivity, the economic growth will inevitably be affected. Therefore, population intake is absolutely necessary to sustain economic development.
(5) Another source of future housing demand is the additional units required for relocation caused by urban redevelopment, though the issue has now attracted less attention. From 2010 to 2014, an average of just about 1 900 private residential units in buildings aged 30 years or above were demolished in Hong Kong each year. If there were no more demolitions from now on, the number of private residential units aged 70 years or above (i.e. built in 1976 or before) will reach 330 000 by 2046, almost 300 times that of the current level. As such, there will be a much greater need for redevelopment in the coming decades. Generally a redevelopment project takes ten years or even longer to complete, and by the time of completion the number of units may not have increased (and sometimes may even decrease). With a large number of buildings pending redevelopment and residents pending rehousing, and the possible decrease in the number of units, we definitely need more land and flats as a buffer for urban redevelopment.
(6) According to an overseas consultancy (Demographia), Hong Kong is the most densely populated advanced city in the world, among urban regions with a population of five million and more. Each square kilometre of developed land in Hong Kong is accommodating 25 600 persons (and 27 000 persons if we only consider the built-up area of about 267 square kilometres), way ahead of Singapore in the second place (11 100 people/square kilometres) and Seoul in South Korea in the third place (9 100 people/square kilometres), as well as all other European and American urban regions. Accommodating all new population and households in the currently developed land will further boost Hong Kong’s population density, which collides head-on with the public aspiration of “living in a bigger and better space”. It will be an impossible mission to maintain or even enhance the living quality without developing new land.
(7) In the past, some opined that all or most sites available for development could be used for housing, and thus criticised that the proportion of housing sites was “too low” in certain New Development Areas (NDAs). As a densely-populated city, Hong Kong needs to adopt a balanced approach in developing new towns and NDAs, and take into account various uses in land distribution. Taking the Outline Zoning Plan (OZP) of Sha Tin New Town as an example, housing sites account for 18 per cent of the OZP area, Government, Institution or Community (G/IC) sites and open space account for 20 per cent, and roads account for 8 per cent. On the other hand, land zoned for “Village Type Development” or “Green Belt” has taken up 42 per cent of the OZP area, but these sites in fact do not form part of the new town development.
(8) Looking ahead, in view of the public aspirations for improved living environment and living space, in general, a higher proportion of land in NDAs will be planned for G/IC uses and open space, while original villages and farmland/green land will be preserved as far as possible. Taking the Kwu Tung North/Fanling North NDAs as examples, housing sites account for 16 per cent of land, G/IC sites and open space account for 20 per cent, and roads account for 12 per cent. On the other hand, 40 per cent of the land is for villages, agriculture, green belt and conservation, including the 37-hectare Long Valley Nature Park and 58 hectares of farmland for balancing development and conservation. Meanwhile, we need to provide sufficient land for economic uses to meet the demand for economic activities and employment. In recent years, the price and rent of different types of industrial and commercial buildings have been rising and their vacancy rates are kept relatively low. These reflect the tight supply of economic sites, especially those for industrial and commercial purposes.
We present the above examples and data in the hope that the public will have a better understanding of the pressing need of land development, and the Government’s priorities with regard to increasing land supply. I can assure you that the current-term Government is steadfast in rectifying the past problem of land supply shortage. Despite the difficulties and challenges along the way, our resolve will never waver. We understand that various social problems, including the site search for building elderly homes, sports venues, open space, start-up business, logistics sites, public and private housing, shops and offices, as well as columbaria, etc. will only possibly be solved with sufficient land supply. As a people-oriented Government, we will make long-term planning to increase land supply and build up a land reserve. After all, it is our duty to make early preparation for the future and the next generation of Hong Kong.
There are indeed a lot of myths on the issue of land. I will explain further when the occasion arises.
Notes:
1. According to C&SD, the average domestic household size is projected to decrease from 2.9 persons in 2014 to 2.7 persons in 2034, and the declining trend will continue up to 2049.
2. According to “Housing in Figures 2016”, public permanent rental housing covers (i) public rental housing flats and interim housing flats of the Hong Kong Housing Authority; and (ii) rental flats and Senior Citizen Residences Scheme flats of the Hong Kong Housing Society. For the numbers of public permanent rental housing units, their population and average household size, please refer to “Housing in Figures 2010”, “Housing in Figures 2015” and “Housing in Figures 2016”.
16 October, 2016
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