Hunting for more land for housing

In his election manifesto, Chief Executive John Lee Ka-chiu pledged that the sixth-term Hong Kong Special Administrative Region government would expedite land and housing development and shorten the waiting time for public housing.

He also announced plans to establish two groups to specifically deal with housing problems - the Task Force on Public Housing Projects, and the Steering Committee on Land and Housing Supply.

Chester Leung Hin-ching, valuation and advisory services senior director at CBRE Hong Kong, says the government can increase residential land supply through four channels.

Leung said that the government should continue to push forward with the Kau Yi Chau Artificial Islands reclamation project, as well as the Northern Metropolis Development Strategy, which he estimated will provide 3,300 hectares of land for development by 2048, accounting for more than 50 percent of the land needed for development in this period.

The second approach is to increase the plot ratios. In August, the government applied to relax plot ratios and height restrictions at 37 parcels of land by up to 30 percent in the northern Fanling North Development Area and the Kwu Tung North Development Area. This will be part of the Northern Metropolis development plan to boost the total number of homes, estimated at more than 13,000.

The government can also speed the redevelopment of urban areas by lowering the threshold for conducting compulsory land sales for redevelopment. It can further consider applying the Land Resumption Ordinance to expedite land supply.

Last but not least, the administration should streamline land development procedures, says Leung. "It would normally take at least 10 years for developers to complete the whole development process, even for noncomplex residential land conversion development projects. By simplifying every step, it would help a lot in streamlining the entire process."

Chiu Kam-kuen, Greater China chief executive at Cushman & Wakefield, says it is critical for the government to introduce a timetable that lists the development phases of residential land areas with infrastructure and transportation networks. Such areas include the Northern Metropolis Development Strategy and Lantau Tomorrow Vision. Private developers could then gauge the government's planning schedules to decide if they will proceed with lease modifications for residential projects.

If the infrastructure and transportation networks are insufficient, "developers can only opt for lower plot ratios, but this would hinder potential residential flat supply", says Chiu.

"It would require up to 6,000 hectares of land to build homes to meet the government's 10-year housing supply target," Chiu said. But he adds that such a target is relatively aggressive as the government does not have a specific land supply timetable at present.

Last year, the government said its 10-year housing supply target of 430,000 units in the next decade was on track -with 301,000 public rental housing units and subsidized flats, as well as 129,000 private residential homes.

The Hong Kong General Chamber of Commerce - the oldest business chamber representing multinational companies in Hong Kong - wants the government to permit plot ratio transfers, expand eligibility to apply for making land premium payments at standard rates, and better leverage public-private partnership to speed up land supply.

The Development Bureau and the Lands Department launched a pilot program in March 2021 for charging land premiums at standard rates for lease modifications for redevelopment of industrial buildings in a bid to accelerate the lease modification procedure based on the certainty on land premiums.