Land Ownership

As already hinted at, another key distinctive feature of Hong Kong, although it is one shared with both other Asian ‘dragons’ and with mainland China, is the central role played by the state in land ownership and disposal. For virtually all land in Hong Kong, ownership of the freehold title remains vested in the state. Urban development may be undertaken by the state itself, as in the case of public housing and certain infrastructure, or by private developers who acquire a leasehold interest in the land, usually through an auction process. Given the comprehensive approach to planning outlined above, leasehold disposals are routinely packaged with detailed zoning, development and layout plans which prescribe what can be built where—the analogy in other places would be a comprehensive masterplan. The common UK experience, where there is no up-to-date local plan and developers put forward a site which has not been zoned with a scheme which they have designed, does not typically apply. Until 1998 the quantity of land leased for private development was based upon a three-year housing demand projection and availability of existing serviced land (Chiu 2007, p. 73). Thereafter a modified auction process was introduced, entailing publication of a list of sites with developers invited to bid with a ‘minimum price’ for sites of interest.

The central role in land disposal gives the state a particular opportunity, but also responsibility, to influence outcomes in terms of the overall volume of supply, the type and location of supply, and (indirectly) the market price of housing. From a British perspective, where supply is manifestly inadequate and government relies on a decentralised system of local authorities and predominantly private land ownership, and where promoting supply has been likened to ‘pushing string’ (Bramley 2015), such a system looks enviable. It is also a significant source of revenue for the state, which also helps to motivate supply (Ng & Cook 1997). In practice, whilst land ownership has historically facilitated Hong Kong’s rapid growth, there have been questions about the effectiveness of the model in recent years. Land supply was deliberately expanded in the mid-1990s to curb price growth, but this did not prevent a speculative boom in 1997, whilst perhaps exacerbating the subsequent slump associated with the Asian financial crisis of 1998 and the subsequent economic problems including those associated with the SARS epidemic.

 
Source
< Prev   CONTENTS   Source   Next >