Treating the Symptoms - A Critical Review of ... - Civic Exchange

54 Yeh, A. (1993), “Urban planning under a leasehold system”, Working Paper No. 57, Hong Kong: Centre of UrbanPlanning and Environmental Management, University of Hong Kong, pp. 4-6.55 HKSAR Government (2010), “Tax rates of property tax”, http://www.gov.hk/en/residents/taxes/taxfiling/taxrates/propertyrates.htm, downloaded 29 May 2010.56 Cullen, R. and Wong, A. (2008), The Foundations of the Hong Kong Revenue Regime, Hong Kong: Civic Exchange, pp.17, 25, http://www.civic-exchange.org/eng/upload/files/200812_hkTaxRegime.pdf, downloaded 12 July 2010.57 Yeh, A. (1993), op. cit.58 HKSAR Treasury (2002, 2004, 2006, 2008), “Accounts of the Government for the Year Ended 31 March 2008 (2006,2004, 2002)”, http://www.try.gov.hk/internet/eharch_annu_statend08.html - p, and http://www.try.gov.hk/internet/eharch_annual.html, downloaded 8 September 2009.59 For much of Hong Kong’s history, the Hong Kong dollar has been pegged either to the pound sterling or the US dollar:it was pegged to the pound between 1935 and 1972; and then pegged to the US dollar between 1972 and 1974, andagain from 1983 to the present day. This means that Hong Kong’s government cannot raise or lower interest rates inorder to slow down or stimulate the economy, and resorts to land supply manipulation instead.60 Cullen and Wong (2008), op. cit., p. 22.61 Ibid.62 Hui, E., Lam, M. and Ho, V., “Market disequilibrium and urban land shortages: Analysis of policy and patterns inHong Kong”, Journal of Urban Planning and Development, ASCE 132 (2), 2006, pp. 80-88.63 Bristow, R. (1984), op. cit., pp. 33-34.64 HKSAR Census and Statistics Department, “Population by type of housing, 1996, 2001, and 2006”, Hong KongStatistics, http://www.censtatd.gov.hk/hong_kong_statistics/statistical_tables/index.jsp?charsetID=1&subjectID=1&tableID=160, downloaded 12 July 2010.65 Bristow, R. (1984), op. cit., p. 29, 72.66 Ibid., p. 91.67 The URA Ordinance states that one of its purposes is to replace dilapidated areas with new development which is“properly planned” and “provided with adequate transport and other infrastructure and community facilities”.68 Brownlee, I., personal interview, 25 June 2009.69 Yeh, A. (1993), op. cit., pp. 18-20.70 Ibid., pp. 16-17.71 Nissim, R. (1998), Land Administration and Practice in Hong Kong, Hong Kong: Hong Kong University Press, pp.49-50.72 Ibid., pp. 91-93.73 Yiu, E. (2009), Hong Kong Building Control and Land Administration E-Museum, http://rec.hku.hk/ecyyiu/HKBCLAEM/HKBALEM%20r4.pdf, downloaded 12 July 2010.74 It should be noted that Hong Kong and Britain’s planning systems have diverged considerably since 1939. Hong Kong’sgrew into a plan-based system of zoning and development control. Britain’s system has since evolved into a discretionarysystem where local councils grant or reject planning permissions, required for all new developments, according to themerits of individual cases.75 Yeh, A. (1993), op. cit., pp. 13-15; Bristow, R. (1984), op. cit., pp. 56-57, 73.76 Tang, B. S. and Leung, H. F., “Planning Enforcement in Hong Kong: Implementing the New Planning Law before theChange of Sovereignty”, Town Planning Review, v.69 no.2, 1998, pp.153-169.77 Chan, K., “Government demands $300m premium for Mongkok site”, The Standard, 16 December 1999.78 Poon, A. (2006), Land and the Ruling Class in Hong Kong, Richmond, Canada: Alice Poon, pp. 89-90.79 Ibid., pp. 52-57.80 Nissim, R. (1998), op. cit., p. 68.81 Yeh, A. (1993), op. cit., p. 9. Also see Bristow, R. (1984), op. cit., p. 79.82 Hong Kong Legislative Council, Official Repord of Proceedings, 6 November 1986, pp. 362-363.83 Working Party on the Possible Conversion of Selected Industrial Buildings for Loft Apartments (2002), “Working PaperNo. 40: Final Report on the Case Studies of the Possible Conversion of Selected Industrial Buildings for Loft Apartmentsin Ma Tau Kok and Yau Tong”, Annex 1: Working Papers and Technical Reports of the HK2030 Study, Hong Kong 2030Planning and Vision Study, 2007, http://www.pland.gov.hk/pland_en/p_study/comp_s/hk2030/eng/wpapers/pdf/wpaper40.pdf , p. 10, downloaded 12 July 2010.84 Ratings and Valuation Department, “Hong Kong Property Review 2010”, Publications, http://www.rvd.gov.hk/en/publications/hkpr10.htm, p.29, downloaded 12 July 2010.85 Working Party on the Possible Conversion of Selected Industrial Buildings for Loft Apartments (2002), op. cit., p. 19.86 Nissim, R., personal communication, 24 October 2009. Brownlee, I., personal interview, 25 June 2009.87 Nissim, R., personal communication, 24 October 2009.88 Betterment levies are a type of tax on land value improvements based on the idea that the community should be able tocapture some of the wealth that has been enabled (at least in part) by the community’s investment in better infrastructureand amenities. The Special Committee viewed lease conversion premiums as a rough proxy for a betterment tax, buta very uneven and imperfect one because it affects different leaseholders differently depending on the content of theirleases.89 Hong Kong Institute of Surveyors (2003), “The HKIS Calls for Change in Land Premium Policy to ExpediteUrban Redevelopment and Revive Private Capital Inflows”, Press Releases, http://www.hkis.org.hk/hkis/html/upload/NewsPressRelease/nwpr88_0.pdf, downloaded 12 July 2010.90 In 1946, when a large number of 75-year leases came due, the government temporarily slashed renewal premiums by50% in order to encourage cash-strapped tenants to repair their war-damaged buildings. Then in 1973, when manyrenewable leases came due, the government sharply reduced the new crown rent assessments because of a public outcry,as by then a booming property market would have multiplied crown rents by 750 to 2000 times. See Bristow, R. (1984),op. cit., pp. 67, 136.91 Li, L. H. (2006), Development Appraisal of Land in Hong Kong, Hong Kong: Chinese University Press, p. 59.92 Change of land use waivers do not modify the lease, but allow the owner a temporary exemption from the leaseconditions for the lifetime of the building or the duration of the lease. Full premiums are still charged uponredevelopment.93 Tsang, D. (2009), Breaking New Ground Together: 2009-2010 Policy Address, paras. 24-25, http://www.policyaddress.gov.hk/09-10/eng/p24.html, downloaded 16 October 2009.94 Information Services Department, “LCQ 3: Revitalisation of industrial buildings”, Press Release, 20 January 2010,http://www.info.gov.hk/gia/general/201001/20/P201001200192.htm, downloaded 12 July 2010.95 Hong Kong Institute of Surveyors (2003), op. cit.96 Rates are a tax assessed based on land values. If many buildings were redeveloped to more valuable uses, revenue fromrates would go up.97 HKSAR Government (2006), Broadening the Tax Base, Ensuring our Future Prosperity: What’s the Best Option for HongKong?, para. 15, http://www.taxreform.gov.hk/eng/pdf/Chapter_01.pdf, downloaded 26 October 2009.98 Brown, S., personal interview, 19 June 2009.99 Poon, A. (2006), op. cit., pp. 89-90.100 HKSAR Planning Department (1999), op. cit.101 HKSAR Urban Renewal Authority (2005), Acquisition Policy, http://www.ura.org.hk/html/c906000e13e.html,downloaded 12 July 2010.102 HKSAR Industry Department (2000), Legislative Council Trade and Industry Panel - Renewal of Old and Planning of NewIndustrial Areas, p.2, http://www.legco.gov.hk/yr99-00/english/panels/ti/papers/a1420e.pdf, downloaded 12 July 2010.103 Yiu, E. (2009), op. cit.104 Nissim, R., personal interview, 18 May 2009.105 Yiu, E., “King of the hill looks to Hollywood’s heights”, South China Morning Post, 27 March 2009.106 Nissim, R., personal interview, 18 May 2009.107 The Lands Tribunal in fact approved 20 applications, but one was vacated by court order. HKSAR Development Bureau(2009), “Proposals to facilitate redevelopment by the private sector: applications threshold under the Land (CompulsorySale for Redevelopment) Ordinance”, Legislative Council Panel on Development Paper CB(1)2260/08-09(01), http://www.legco.gov.hk/yr08-09/english/panels/dev/papers/dev0716cb1-2260-1-e.pdf, downloaded 12 July 2010.108 See public submissions available on Legislative Council website. HKSAR Legislative Council Panel on Development(2009), “Special meeting on Thursday 16 July 2009 at 2:00 pm in the Chamber of the Legislative Council Building,revised agenda (as at 15 July 2009)”, http://www.legco.gov.hk/yr08-09/english/panels/dev/agenda/dev20090716.htm,downloaded 12 July 2010.109 Data from Home Affairs Department’s Database of Private Buildings, https://bmis.buildingmgt.gov.hk/eng/buildingsearch.php, downloaded 12 July 2010.127