New Development Areas in the North East New Territories (NENT)
Land is a scare commodity and also one of the most valuable assets in Hong Kong. A shortage of land supply in recent years has aroused much concern from the community.
In the past, development of new towns in the New Territories and reclamation were the main measures to address the land shortage problem. Other methods, including rezoning, urban renewal, and land resumption, have also been adopted to cater for housing, social and economic needs at different times. In recent years, the pace in the provision of developable land dropped drastically. One of the main reasons is the strong public’s aspiration to protect and preserve Victoria Harbour as a special public asset and form of natural heritage conservation.
However, the surge in property prices and shortage in office supply has already urged the need for a steady long term land supply programme in Hong Kong. More land is required to accommodate the anticipated population growth, cope with public’s rising aspirations for a quality living environment, and sustain economic development. In this regard, the government announced, in its 2011-2012 Budget, to conduct relevant studies and public engagement exercises to explore options for enhancing land supply by expanding land usage, and building up a land reserve in order to pool a sufficiently large area to ensure steady supply.
As indicated by the then Chief Executive in his previous two Policy Addresses, the government would aim to ensure a sufficient land supply in order to maintain a stable environment for the healthy and sustainable development of the property market. The proposed New Development Areas (“NDAs”) in the North East New Territories (“NENT”) are the prime land supply projects that are expected to ensure a medium to long term land and housing supply.
For this mega NENT development project, the HKIS GPD has set up a Working Group (WG) on Land Supply to conduct research with a view to submit comments to the government. Convened by Sr CK Lau, the WG comprises with the following members:
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Sr C.K. Lau
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Sr Edward Au
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Sr Tony Wan
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Sr Charles Chan
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Dr James Chan
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Sr Selene Chiu
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Sr Dick Kwok
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Sr Andrew Fung
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Sr Angela So
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Sr Joseph Ho
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The Planning and Development Study on the NENT, commissioned by the Planning Department and completed in 2003, identified Kwu Tung North, Fanling North and Ping Che/Ta Kwu Ling as suitable NDAs (i.e. the Three-in-One NDA Scheme) and confirmed their feasibility based on the findings of various planning, engineering and environmental assessments. But in view of the slow growth of Hong Kong’s population and housing demand in previous years, the NDA proposals were shelved, pending a comprehensive review of the need for strategic development areas in the "Hong Kong 2030: Planning Vision and Strategy" ("the HK2030 Study").
In 2008, the government carried out a planning and engineering study ("the P&E Study") on the NDAs in the NENT. The overall objective was to establish a planning and development framework for the Three-in-One NDA Scheme to meet long-term housing, social, economic and environmental needs, as well as to formulate an implementation programme. The P&E Study includes a three-stage public engagement. The Stage One Public Engagement, which was conducted from mid-November to December 2008, consulted the public at an early stage to generate discussions of key issues relating to the development of the NDAs. Stages Two and Three of the exercise will engage the public on the Preliminary Outline Development Plans ("ODPs") and Recommended ODPs, respectively. Taking into account the views received and results and recommendations of the technical assessments, the government formulated the recommended outline development plans (RODPs). At that time, the GPD Land Supply Working Group studied the proposals and forwarded a comprehensive response to the Stage Three Public Engagement.
Response of the HKIS GPD
1. Hong Kong Needs Long Term Planning of Development Lands
The NENT NDAs represent important sources of long term land supply for Hong Kong. The HKIS is aware that different views have been expressed in the community from different stakeholders, including the affected owners and occupiers.
Hong Kong does need to cater to the increasing demand for land for housing, employment, and other uses, which demand comes from the existing population and antrcipated growth. The long term planning and implementation of various large scale development areas, including the NENT NDAs, Hung Shiu Kiu, and Yuen Long South, are important for serving the people of Hong Kong.
2. Proposed Density and Flat Supply
The proposed development density in the three NENT NDAs (on average, 284 persons per hectare) is low when comparing to existing built up areas which on average would be close to 400 persons per hectare as revealed in the reclamation consultation document. The total flat supply would be in the order of some 53,800 for a total land area of about 533 ha. In the light of the planned availability of MTR and the very significant costs for resumption and infra-structure, the development density should be increased so as to make better use of valuable development lands to meet with the needs of Hong Kong. The new areas would also need critical mass of population to make the same lively and sustainable.
3. The Conventional New Town Approach
For the purpose of implementation, the government proposes to resume all the private lands in the NENT NDAs. The scale of resumption is very large, as the private lands amount to some 265 ha, or about half of the total development area.
The government uses the term “Conventional New Town Approach” to describe the resumption arrangement. However, it was noted that development of various new towns in the past were through both reclamation and resumption. The previous new town approach was inclusive of land exchange and issue of land entitlements rather than pure resumption.
At the beginning of the year, the government stated in the Reclamation Engagement Digest that resumption “will cause local resentment if residents wish to maintain their rural lifestyle or are not satisfied with the compensation or re-housing arrangement. The land acquired can only be used for designated purposes, resulting in low flexibility in land use”.
The proposed wholesale resumption excluding other options is a fundamental hange in government policy as private developers/owners would not have the opportunity to apply for land exchange for development no matter their land holdings comply with the proposed town planning zoning for commercial and/or residential uses for example. This is another area which does not align with previous new town development practices.
The government suggests that this approach would ensure an orderly implementation of the NDAs. It, however, made no comparative information/assessment available from the government to indicate the timing and delivery of the development lands in its proposal as against the land exchange approach with initiatives from private owners. Whether the resumption approach could actually speed up the land supply in the NDAs could be uncertain due to the possibilities of some owners challenging the legal basis of resumption and thus
delaying the implementation.
There are dissenting views relating to the resumption of private lands from existing owners and then selling development rights of them to other owners. The protection of private property rights is fundamentally important and it is possible to preserve these rights, whilst at the same time, serving the public needs. Had the NENT NDAs been implemented the way the government proposed, this would set a precedent for
similar development areas in the future.
The land exchange arrangement has been an important source of land supply for several decades. If the underlying consideration for the exclusion of land exchanges in this exercise is to avoid the “perception of possible collusion between the government and the business sector”, and if such an idea further develops, then land supply in Hong Kong would be much restricted as a result.
4. Resumption versus Land Exchange
The existing planning regime has been directing market forces for land assembly in the New Territories. Land exchange applications can then be made to reflect planning intentions and/or approvals.
Within the NENT NDAs, land assembly exercises have taken place that would have relied upon the public-private partnership concept. If the proposed resumption of the whole NENT NDAs were to be implemented, this could then mean an end to private land assembly in similar development areas and possibly other areas.
We urge that the government make an impact assessment of how this policy change would affect the private land exchange and housing production. As well as the cost implications of the government land supply through such route.
For implementation, further thoughts should be given to the land exchange option. Relevant negotiations of land exchange could commence as and when approved town plans are available. This should facilitate early availability of development lands and there is no need to wait until the completion of the resumption and clearance exercise. Opposition from relevant land owners would be reduced, if not removed entirely, and the initial capital layout of the government in terms of compensation can be reduced significantly.
5. Compensation arrangement
Details of the compensation arrangement have yet to be announced and the government has only indicated that this could be better than the Choi Yuen Village case. Exgratia payments were used in the Choi Yuen Village case to facilitate the resumption. These ex-gratia payments were intended to attract affected parties to accept the settlement instead of pursuing the statutory route of compensation.
We look forward to seeing the review results of the ex-gratia payment arrangement and the rationale behind the same. Such review should include the types of ex-gratia
payment to be paid to occupiers like squatters on private and/or government lands which in turn would have impact onto market behavior. At the same time, it would be useful if there is another review of the section 12 ( c ) of the Lands Resumption Ordinance so that the market value of the lands reflecting the development potential can be fairly included in compensation assessment.
6. Professional Input from members of the HKIS
It can be foreseen that large scale resumption would take place in the NENT NDAs at least to implement public sector development, including infrastructure. Affected parties, including owners and occupiers, would need the professional services of private sector surveyors to assist them in the resumption process and compensation matters. Our Institute would be pleased to discuss with the relevant government officials the engagement arrangements of the private sector surveyors, so as to facilitate the process.
New GPD Fee Scale
WG on the new GPD Fee Scale will soon hold a meeting with the Acquisition Section of the Lands Department to discuss the adoption of a fee scale by the government. Regarding the fee scale in relation to the Competition Ordinance that was enacted on 14 June 2012, according to legal advice HKIS is an exempted body under the Competition Ordinance thus the fee scale/charges as set by HKIS would not violate the said Ordinance. However, the Council was brought to notice that if a fee scale was jointly set by two parties with a view to monopolize the market, such an act might have violated the Ordinance.
Construction costs for Land Premium Negotiation in the Valuation Liaison Meeting
As reported earlier that discussion with the government is in progress. A revised pro-forma for the calculation of construction costs prepared by RLB has been submitted to the Lands Department after a working session with it on 14 September 2012. The WG advised that this pro-forma was intended to be uploaded to the HKIS website for the use of those members engaged in such a premium assessment. RLB has yet to confirm the subscription service arrangement by the private sector. Members will be kept informed of the progress.
Recruitment of APC Assessors
The GPD has sent out invitation letters to senior members for their assistance in conducting the Assessment of Professional Competence (APC), General Practice Division (GPD) 2012, to act as assessors under the new APC Scheme.
Members may be aware that the new APC scheme is now in force. Under this scheme, all candidates are required to attend both the Part I (written test with four subject papers) and the Part II (professional interview) Assessment. During the transition period, the Part I Assessment for this year will still remain in the old format (i.e. one written assessment paper in which candidates are required to answer questions on specific areas within a time limit, normally three hours), and be conducted in an examination hall, while the Part II Assessment (i.e. the interview), would be conducted in the new format starting in December 2012.
Candidates who have completed their first year of training can sit for the Part I Written Assessment. As for candidates who have passed the Part I APC Written Assessment and have already completed two years of training, they will be eligible to attend the Part II Assessment in the same year. The Part II interview panel consists of a chairman and two members. The interview will take approximately 60 minutes. Candidates under the new APC Scheme are required to submit a Critical Analysis and a project (in written form) for their interviews. The interview panel shall make a recommendation after interview to the Institute if it accepts the candidate as a professional member.
In order to maintain professional standards at an acceptable level, the Institute require a large number of assessors, so members’ support and participation are much appreciated. All members who have attained a minimum of seven years of PQE can act as APC Assessors under the new APC Scheme. Interested members shall complete the confirmation slip attached to the invitation letter (which was dispatched to members on 24 September 2012) and return it to Miss Katherine Kong of the HKIS by 5 October 2012. A briefing cum training session will be arranged for all registered assessors in October 2012. Members may also note that if they wish to apply for senior membership within the Institute, the hours devoted to the assessment will be counted as CPD hours subject to the guidelines of the Mandatory CPD scheme.
Stop Press: We are pleased to learn that Sr Edward Au, our representative at Pan Pacific Conference 2012 just received the Best Paper Award. Details will be given in the October
issue of the Surveyors Times.
HKIS Announcement
Please note that the Supplement to the Code of Measuring Practice has recently been revised and adopted by the HKIS for issue on 1 October 2012. All HKIS members are bound to follow the Code of Measuring Practice (March 1999 Edition) together with this revised Supplement to the Code of Measuring Practice (1 October 2012 Edition).
Supplement to the Code of Measuring Practice
Preamble
This supplement is entitled “Supplement to the Code of Measuring Practice” (“this Supplement”). This Supplement should be read in conjunction with the Code of Measuring Practice published by The Hong Kong Institute of Surveyors in March 1999 (“the Code”) and shall form part of the Code.
Saleable Area
Saleable Area shall include Balcony and other similar features such as Veranda and Utility Platform. The area of such features shall be measured from the exterior of the enclosing walls but excluding the full thickness of such enclosing walls which abut on the unit.
Saleable Area shall not include the items specified under Ancillary Accommodation. These items shall be separately measured and stated.
Ancillary Accommodation
Unless otherwise specified by members in their reports, the following items of Ancillary Accommodation shall be measured as follows and stated separately under Ancillary Accommodation:
Cockloft: the area of a cockloft shall be measured from the interior of the enclosing walls and shall include the internal partitions and columns within such cockloft.
Stairhood: the area of a stairhood shall be measured from the exterior of the enclosing walls and shall include the internal partitions and columns within such stairhood.
Bay Window: the area of a bay window shall be measured from the exterior of the enclosing walls or glass windows of such bay window and from the point where the bay window meets the wall dropping to the floor level of a unit excluding the thickness of
such wall.
Yard, terrace, garden, flat roof, roof, air-conditioning plant room and lift lobby (including those expressions which describe the area between the lift and the unit): the area of such items shall be measured from the interior of their boundary lines, and where boundary consists of a wall, then it shall be measured from the interior of such wall.
Air-conditioning Platform
This item is neither Saleable Area nor Ancillary Accommodation.
Superseding
This Supplement shall supersede any other Supplement(s) previously issued.
Clarification
If members of The Hong Kong Institute of Surveyors have any doubt on the interpretation of the Code and this Supplement, they should seek clarification from the President of the Institute in writing.
This Supplement issued on 1 October 2012
The Supplement issued on 1 March 2010 superseded
The Supplement issued on 18 August 2008 superseded
The Supplement issued on 5 February 2008 superseded
The Hong Kong Institute of Surveyors
