by Savantas Policy Institute
EJ InsightToday, 8:01 AM
More than one-third of the population of remote new towns like Tuen Mun works in Kowloon or on Hong Kong Island. Photo: HKEJ
In recent years, the acute land shortage, stemming from poor planning by previous administrations, has substantially clipped the wings of the Hong Kong government in different policy areas, from housing to economic development.
It is estimated that, by 2020, the shortage of office space may reach 4 million square feet, the equivalent of the floor area of four Two IFC towers.
The situation of industrial land — which houses many storage, logistics and food processing companies and other organizations employing a total of 400,000 citizens — does not offer us reasons for optimism, either.
Projections by the Planning Department show a shortfall of industrial land will first emerge in 2018 and amount to 2.97 million square meters by 2023.
Needless to say, the housing shortage still tops the agenda.
The government’s efforts to cool down the overheated housing market by increasing housing supply and combating speculation deserve recognition.
While the government presses ahead with supply-side policies, the importance of well-thought urban planning that gives due regard to balanced development of districts and forging mixed-income communities should not neglected.
As an undertapped housing policy tool, land use regulation matters in two ways.
First it can play a part in increasing land supply.
In his 2014 policy address, Chief Executive Leung Chun-ying announced that, excluding the Kowloon peninsula and northern Hong Kong Island, the maximum domestic plot ratio permitted for other “density zones” could be raised by around 20 percent as appropriate, after taking into account factors such as traffic and local characteristics.
By January this year, applications to relax the development density of 26 housing sites had been vetted and approved by the Town Planning Board.
This alone releases an additional supply of 3,500 housing units.
In this sense, loosening the constraints of land use regulation as appropriate can help alleviate the land crisis.
Second, the planning of new communities is no less important than building them.
A jobs-housing mismatch has been a persistent concern in public housing.
Many new towns are situated far away from the central business districts in Hong Kong Island and Kowloon.
The long commuting distances do not only add to the financial burdens on the new towns’ residents but also deprive them of rest and time with family.
The 2011 population census shows more than one-third of the working population in the Tuen Mun, Yuen Long, Sheung Shui and Tin Shui Wai new towns work in Kowloon or on Hong Kong Island.
In Tin Shui Wai, the ratio of local jobs to residents is as low as 7-8 percent.
The concentration of a poor population and the lack of economic activities and social amenities in these new towns, coupled with their near isolation from the rest of the city due to a poorly connected transport network, may combine to fuel social problems.
To avoid the segregation of the poor population, the United States has implemented inclusionary zoning to facilitate the integration of lower-income families into low-poverty neighborhoods.
Incentives for developers, such as floor area bonuses, fast-track approval and tax credits, are in place.
In exchange, the developers need to set aside a certain proportion of units in the building, or construct an equivalent number of units in a nearby land lot, for the middle- to lower-income households to rent or purchase at affordable levels.
This gives different classes access to the same community services and amenities and, given more economic activities in the neighborhood, promotes the employment of lower-income citizens in the vicinity.
In 1987, New York launched an inclusionary housing program in the densely developed R10 area.
In 2005, the city established inclusionary housing designated areas (IHDAs) in the boroughs of Brooklyn, Manhattan and Queens.
If developers set aside 20 percent of units for households with incomes lower than 80 percent of the median income in the area, they may apply for a floor area bonus that, subject to the quantity and location of the units they provide, can reach 33 percent.
For example, in a luxury apartment building in Manhattan, 78 units, or 20 percent of the total, are rented to lower-income households.
Among them, the rents for 19 two-bedroom units are 90 percent lower than the market rate.
Last but not least, regulations require these inclusionary housing units to be permanently affordable.
Inclusionary zoning is reminiscent of the mixed development pilot scheme, which has been shelved by the Hong Kong government since 2002 and may make a comeback in the future.
Ben Lee is the writer of this article.
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