Designing Hong Kong E-Newsletter: Monday, 07 July 2008

URA not the only model for urban rejuvenation

The government has formally kicked off the urban renewal strategy review in the Legislative Council. In the related papers and presentations, the question that is not asked is what alternatives there are besides the Urban Renewal Authority (URA).

Can we achieve urban renewal by focusing our efforts on halting the construction of shoddy buildings, stricter enforcement of repair orders, the closure of inhabitable buildings and better co-ordination of planning, lands and building regulations to help private sector redevelopment?

Urban renewal is sold as a policy to help those who live in unbearable conditions and to eliminate urban decay from our city's landscape. Looking back in history, the predecessor of the URA, the Land Development Corporation (LDC), was set up in 1987 to speed up land development as low plot ratios were considered an inefficient use of land.

Those opposed to the LDC preferred the government to beef up its resumption powers. Instead, the government decided to minimise direct subsidies by setting up a separate body to handle resumption and related compensation.

In 2001, the LDC was replaced by the URA with greater powers to assemble land, apply for direct resumption, borrow money from the government, forego land premiums, relax plot ratios and gain exemptions for various facilities from the gross floor area calculation.

To gain support from the politicians and the public, the government increased the compensation offered to affected owners over the years. In 1987 Kowloon City residents received the equivalent of a Home Ownership Scheme property. Next, the LDC compensated them with the "fair market value" of resumed premises, which gradually increased to the value of a 10-year-old flat. The URA now pays the equivalent of a seven-year-old property.

These growing powers and increasing costs are reflected in the size of the URA projects replacing the old neighbourhoods. Their massive bulk - on average a threefold increase and often beyond what good urban planning may dictate as appropriate for the area - pays for the compensation, the operational cost (and profits!) of the URA, while also providing a handsome profit for the developers.

This model is unsustainable. Just imagine the size of the urban renewal projects required to replace, say, Tseung Kwan O in 30 years' time. Already, today, there is growing awareness of the limits to the intensification of our urban land.

The 47 LDC and URA projects have so far helped out 31,000 residents. It is claimed that another 110,000 residents are still living in squalid conditions in 200 or so projects. No details are released in fear of raising expectations.

However, taking into account that the buildings department reported over 17,000 potentially dangerous buildings in 1990, it does appear that a good part of Hong Kong's urban decay has been resolved by the private sector over the past two decades. The outcome of their initiatives is often less intrusive with smaller buildings and the renovation of existing properties, as can be seen around Soho.

The first requirement is that we halt the addition of new, substandard buildings with greater control over construction standards. Next, we need diligent enforcement of statutory repair orders and swift action with closure orders in case properties become dangerous and uninhabitable. The other side of this approach is that the existing welfare safety net needs to be strengthened for affected residents who lose their homes or suffer expensive repair orders. The cost of doing so is offset by the land premiums received from developers when they convert land leases.

On the one hand we have the URA, a dedicated machine with enormous powers; on the other, we can facilitate the market and redevelop our land organically. Let's make sure that the review of the urban renewal strategy considers all options between these extremes.

Paul Zimmerman is a founding member of Designing Hong Kong. This article was first published in the South China Morning Post on July 07, 2008. Copyright © 2008 South China Morning Post Publishers Ltd. All right reserved.

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	URA not the only model for urban rejuvenation The government has formally kicked off the urban renewal strategy review in the Legislative Council. In the related papers and presentations, the question that is not asked is what alternatives there are besides the Urban Renewal Authority (URA). Can we achieve urban renewal by focusing our efforts on halting the construction of shoddy buildings, stricter enforcement of repair orders, the closure of inhabitable buildings and better co-ordination of planning, lands and building regulations to help private sector redevelopment? Urban renewal is sold as a policy to help those who live in unbearable conditions and to eliminate urban decay from our city's landscape. Looking back in history, the predecessor of the URA, the Land Development Corporation (LDC), was set up in 1987 to speed up land development as low plot ratios were considered an inefficient use of land. Those opposed to the LDC preferred the government to beef up its resumption powers. Instead, the government decided to minimise direct subsidies by setting up a separate body to handle resumption and related compensation. In 2001, the LDC was replaced by the URA with greater powers to assemble land, apply for direct resumption, borrow money from the government, forego land premiums, relax plot ratios and gain exemptions for various facilities from the gross floor area calculation. To gain support from the politicians and the public, the government increased the compensation offered to affected owners over the years. In 1987 Kowloon City residents received the equivalent of a Home Ownership Scheme property. Next, the LDC compensated them with the "fair market value" of resumed premises, which gradually increased to the value of a 10-year-old flat. The URA now pays the equivalent of a seven-year-old property. These growing powers and increasing costs are reflected in the size of the URA projects replacing the old neighbourhoods. Their massive bulk - on average a threefold increase and often beyond what good urban planning may dictate as appropriate for the area - pays for the compensation, the operational cost (and profits!) of the URA, while also providing a handsome profit for the developers. This model is unsustainable. Just imagine the size of the urban renewal projects required to replace, say, Tseung Kwan O in 30 years' time. Already, today, there is growing awareness of the limits to the intensification of our urban land. The 47 LDC and URA projects have so far helped out 31,000 residents. It is claimed that another 110,000 residents are still living in squalid conditions in 200 or so projects. No details are released in fear of raising expectations. However, taking into account that the buildings department reported over 17,000 potentially dangerous buildings in 1990, it does appear that a good part of Hong Kong's urban decay has been resolved by the private sector over the past two decades. The outcome of their initiatives is often less intrusive with smaller buildings and the renovation of existing properties, as can be seen around Soho. The first requirement is that we halt the addition of new, substandard buildings with greater control over construction standards. Next, we need diligent enforcement of statutory repair orders and swift action with closure orders in case properties become dangerous and uninhabitable. The other side of this approach is that the existing welfare safety net needs to be strengthened for affected residents who lose their homes or suffer expensive repair orders. The cost of doing so is offset by the land premiums received from developers when they convert land leases. On the one hand we have the URA, a dedicated machine with enormous powers; on the other, we can facilitate the market and redevelop our land organically. Let's make sure that the review of the urban renewal strategy considers all options between these extremes. Paul Zimmerman is a founding member of Designing Hong Kong. This article was first published in the South China Morning Post on July 07, 2008. Copyright © 2008 South China Morning Post Publishers Ltd. All right reserved.