HK must build up land reserves

The controversy over the Lantau Tomorrow Vision proposed by Chief Executive Carrie Lam Cheng Yuet-ngor in her latest Policy Address is indeed an excellent public lesson on the development issue. The debate has lasted for several weeks. One of the most discussed aspects is the “alternatives” to this idea. Those opposed to the Lantau project suggested different options, such as developing brownfield sites and green belts, resuming use of private agricultural land and tapping into country parks, as alternatives to the massive reclamation project; they also argued that the government’s proposed project is unnecessary.

The word “alternative” is quite misleading as it implies that the reclamation project is the same as the other options. One of the phrases mentioned most during the land supply consultation is that Hong Kong’s land shortage can only be resolved by a “multi-pronged” approach. But what is the real significance of this phrase? It means that no single approach can resolve the land shortage problem. In other words, different approaches have different functions. Just take a simple example. One of the approaches is to use rock caverns and underground space for development. However, this approach can only be used to provide space for suitable public facilities or infrastructure instead of residential purposes.

So what is the role of a massive reclamation project when it comes to development? It is to increase Hong Kong’s land reserves, which is at a different dimension compared with other approaches. What are the land reserves? These are land that the government obtains and stores to regulate the realestate market, reserve development space or to promote the rational use and management of land resources. For Hong Kong, the land reserves have two crucial functions — capacity potential and a development strategy.

Capacity potential means that a city needs room and flexibility to enhance overall development capacity. The capacity is vital to meeting various development needs of society, including improving average living space per person, improving the provision of community facilities and seizing economic opportunities. Let’s take livability as an example. Generally speaking, the higher the population density of a city, the lower its livability. Compared with international cities such as London, New York City and Tokyo, Hong Kong’s population density is at least five times higher. The problem of a dense population and small living spaces can be easily experienced in everyday life. This problem is hard to resolve by redeveloping the existing land as contrarily it will further drive up our already high population density. Therefore, if we expect that our future will be a better Hong Kong with less compact living spaces, a strategy of using land reserves is necessary.

The concerns of this development strategy are easily neglected, yet it is easy to understand why. Let’s look back to the recent controversy over land development. Due to limited land resources, consideration of the way to develop and prioritize different kinds of land often causes disputes between various stakeholders. The reason behind this is that the government does not have enough land and needs to “beg” or “grab” land when there is a shortage. Strategically speaking, land reserves can be used for unforeseen situations; they also provide flexibility and capacity to act as a buffer in the planning of land requirements. With sizeable land reserves, in the long run, the government will have greater flexibility when planning to provide land for different uses. This will also ensure a more steady and sustainable supply of land in the market.

When the government proposed that its massive reclamation plan could create 1,700 hectares of land, the opposition argued that other alternatives could also provide 1,700 hectares of land. If we appreciate the role land reserves can play in Hong Kong development, we can understand that the two “1700 hectares” are actually not at the same dimension.

Land reserves need to be built up with a surplus of the land supply exceeding the demand. There have not been any large-scale reclamation projects since the 2000s. The land shortage nowadays was due to the lack of planning for land reserves decades ago. It also takes time to increase the land supply. It is impossible to fill any gaps in the land supply within a short period of time when there is no or just a small amount of land reserves.

We should learn an important lesson from this. When it comes to land development, the consequences of underestimating demand will be much worse than that of an overestimation.

The old idiom taught us: “A bird in hand is worth two in the bush.” We need to work on how to get more land instead of arguing over the “alternatives”. The public discussion on the Lantau Tomorrow Vision is a good start. We should forget about political controversies and instead find out more about the development of land reserves in order to prepare for the future.

Strategically speaking, land reserves can be used for unforeseen situations; they also provide flexibility and capacity to act as a buffer in the planning of land requirements. With sizeable land reserves, in the long run, the government will have greater flexibility...