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

Is the URAjust another developer?Having acquired the site, the URA can then proceed withredevelopment in one of three ways:(a) It can redevelop the site on its own(b) It can enter into a joint venture contract with aprivate developer.(c) It can sell the land to a private developer.Joint ventures are the most commonly used modelof redevelopment. Under this arrangement, the URAtenders out for a private joint venture partner to sharethe construction costs and profits. However, the URAstill unilaterally shoulders the costs of acquisition andrelocation.All of these factors combine to explain why the URA stillfaces strong commercial pressures even though it is exemptfrom taxes and land premium. They also explain whythe URA’s activities lean heavily towards redevelopment.The profits earned from redevelopment do subsidizethe other three “Rs” of rehabilitation, revitalization,and preservation, but in reality the vast majority of thefunds go towards new redevelopment projects. The URAdoes not release figures on income and expenditures forindividual projects, but some of its published documentsindicate the heavy financial emphasis on redevelopment.In 2002, the Planning and Lands Bureau estimated thatthe URA’s total cost for 42 projects over the next fiveyears would be HK$38.3 billion, of which only HK$0.4billion was earmarked for rehabilitation, revitalization, andpreservation. 49 Its 2007-08 annual report indicates that theURA made outlays of HK$2.3 billion in direct costs, ofwhich just HK$47 million was for building rehabilitationgrants and loans. (It was not mentioned how much wasspent on preservation or revitalization). 50 In its 2008/09progress report to LegCo, the URA also stated that a totalof just HK$150 million had been spent on rehabilitationsince it first began its rehabilitation programmes in 2004.In a July 2009 presentation to the Royal Institute ofChartered Surveyors, Secretary for Development CarrieLam acknowledged that the URA is often perceived as “justanother developer”. 51 Critics allege that its commerciallydrivenmodel produces results no better than what anyprivate developer would do.This is not an entirely fair assessment. As explained inPart III of this report, the URA has done more thanprivate developers to adopt green building practices andconform to voluntary ventilation assessment guidelines. Itadditionally fields a team of social workers to conduct socialimpact assessments before projects and to assist families inrelocation. It is also required by law to hold some form ofpublic consultation, either through its own mechanisms,in the case of small development projects, or through theTPB’s mechanism in the case of large development schemes.While the URA’s consultation mechanisms fall far short ofbottom-up planning, private development projects whichdo not contradict statutory Outline Zoning Plans do notrequire any form of public consultation.Nevertheless, its commercially-oriented acquire-sellbuildmodel has failed to produce a high quality urbanenvironment. As we shall see in Part III, it builds bulky,homogenous developments with large amounts of inactivefrontage. They overshadow neighbourhoods, frequentlyrely on car-oriented transport planning, and worsenair ventilation conditions. While it has created somesuccessful public spaces and pedestrian precincts, most areunremarkable and a few are poorly designed and managed.URA projects severely disrupt the local economies whichform the character of much of inner urban Hong Kong,and at best preserve heritage buildings in a piecemeal andsuperficial manner. This is far from the holistic processdescribed in the Urban Renewal Strategy. Despite being apublic body with special powers and subsidies granted to itby the government (mostly exemption from land premium,but also a direct capital injection of HK$10 billion 52 ) it hasfailed to adequately fulfil public aspirations.The URA is ultimately a tool devised to paper over thephysical results of inadequate enforcement of regulationsand market failure caused by a high land price policy. In PartII, we will look at how the URA fits into its political andeconomic context, and how it may inadvertently be creatingperverse incentives which exacerbate the very problems itwas intended to solve.21