Hong Kong’s rural hinterland could hold key to chronic land crunch
HONG KONG: Hong Kong’s government says it needs to build billions of dollars’ worth of artificial islands to give the city’s glittering skyline room to grow, but critics say developers are hoarding unused land that could solve the problem.
Hong Kong’s leader, Carrie Lam, estimates the 1,111-squarekilometre city needs another 1,200 hectares, or about 12 square kilometres, and has proposed creating new land offshore.
Her plan, which would cost up to US$64 billion, could exhaust half of the financial hub’s sizeable financial reserves.
But major developers, including Henderson Land, New World Development and Sun Hung Kai Properties , are sitting on “no less than 1,000 hectares” of agricultural land, according to government estimates.
None of the three developers would clarify exactly how much rural land they hold, either directly or through shell companies. Two declined to comment on their plans for it or why they were sitting on the land.
Sun Hung Kai said it has been working to convert its agricultural land for “appropriate developments to help address the shortage of developable land and housing in Hong Kong,” but offered no examples.
Holding onto the land until it is rezoned for private development is potentially lucrative. Property prices have more than doubled in the last decade, and many city centre private flats sell for at least US$25,000 per square foot.
Augustine Ng, a former senior government town planning official for nearly three decades, is sceptical the city and developers are doing all they can.
He argues that taking over agricultural land held by developers using a powerful colonial-era ordinance would meet the city’s land needs many times over. “In a way, the developers are holding Hong Kong for ransom,” he said. ‘Business secret’
Ng, who recently wrote a detailed proposal on solving Hong Kong’s land woes, says developers conceal their acquisitions through shell companies and middle men, then sit on the land, betting prices will rise.
“There’s no way you can identify who owns the land ... This is a business secret,” he said. “I would not be surprised if they each own 1,000 hectares.”
Groups including Liber Research, an NGO advocating equitable land usage, have investigated hundreds of such shell companies, finding some shareholders to be senior staff of big developers.
The government gave no direct response to a Reuters inquiry on whether it had looked into developers’ rural land holdings.
A Task Force on Land Supply, including senior officials, academics and experts, has spent more than a year analysing how to resolve the land crunch but has only a “rough estimate” of such land banks.
“We do have a shortage of land,” task force chairman Stanley Wong said. “And this has (been) jeopardizing the development of Hong Kong in the past 10 or 15 years.”
The task force concluded in a recent report that far more than 1,200 hectares were needed. It supported the artificial islands, converting former industrial “brown field” sites in Hong Kong’s less-developed northern regions, called the New Territories, and developing part of a golf course that is home to rare trees and wildlife.
Yet it was lukewarm on taking developers’ rural holdings, given the risk of protracted legal disputes and protests.
Instead it strongly endorsed teaming up with developers, who would help build public housing in exchange for development rights on rural sites, while the