A review of the effectiveness of urban renewal in

AreviewoftheeffectivenessofurbanrenewalinHongKongEddieC.M.Hui,JoeT.Y.WongandJaniceK.M.WanDepartmentofBuildingandRealEstate,TheHongKongPolytechnicUniversity,HungHom,Kowloon,HongKongAbstractPurpose–ThepurposeofthispaperistoexaminetheprogressofrehabilitationandredevelopmentandreviewtheeffectivenessoftheLand(CompulsorySaleforRedevelopment)Ordinance(LCSRO)(Cap.545)andproposalsthatinfluencetheurbanrenewalprocessinHongKong.Design/methodology/approach–ThestudylargelyreliesonthereviewoftheLCSROandtheGovernment’sproposal,andtheurbanrenewalprogress.RehabilitationandredevelopmentdatawascollatedandanalyzedtoassesshoweffectivetherenewalprocessandtheGovernmentlegislationhavebeenintacklingtheurbandecayprobleminHongKong.ThisstudybenchmarksthegoodpracticesofSingapore.Findings–ThepaceofurbanrenewalactivitiesinHongKongislaggingbehinditspolicygoal.Theimplementationoftheurbanrenewalprogrammehasnotadequatelyresolvedtheseriousproblemofageingbuildings.Theexistinglegislationhasnotbeeneffectivelyattractingprivatesector’sparticipationeither.TheproposedrelaxationofthecompulsorysalethresholdforspecifiedclassesoflotsundertheLCSROaimstoassistprivatesector-ledredevelopment.However,itisnotapanaceaforurbandecay.Whilsttheprivatesector’sparticipationisfacilitated,theGovernmentshouldconsidercomplementarymeasures,e.g.therelaxationofsuchcriteriaasthebuildingage,plotratioandheightlimitationforamoreeffectiveandefficientprocess,particularlyinlessattractivesites.Acarefulbalanceshouldbemaintainedinredevelopingdifferentregionsinthecity.TheGovernmentshouldalsobecautiousaboutthenegativeexternalitiesthatmightaffecttothecommunity.Practicalimplications–ThepaperidentifiestheimplementationgapofurbanrenewalinHongKong.PracticalsuggestionsaremadetotheGovernmentandrelatedorganizationstoexpediteurbanrenewalworks.Originality/value–ThepaperassessesHongKong’surbandecayprobleminaquantitativeway.Thisapproachhashardlybeenappliedinalocalcontext.ItalsohighlightsimportantissuesrelatingtoprivatesectorinvolvementinurbanrenewalactivitiesandvariousconcernsovertheproposedchangestotheLCSRO.Thepaperwillbenefitlocalpolicymakers,propertydevelopersandprofessionalsinthearea.Itsresultswillformabasisforfurtherresearchontheimpactoftheproposalsonlandsupplyandhousingpricesafteritsimplementation.KeywordsGovernmentpolicy,Housinglegislation,Urbanareas,HongKongPapertypeResearchpaper1.IntroductionUrbandecayhasbeenasignificantprobleminmanycitiesworldwide.HongKongisnoexception.Backinthelate1990s,theformerLandDevelopmentCorporation(LDC)estimatedthatover80hectaresoflandacrossurbanareasmeritedpriorityThecurrentissueandfulltextarchiveofthisjournalisavailableat(CodeNo.BB07).Effectivenessofurbanrenewal25ReceivedSeptember2006RevisedMarch2007PropertyManagementVol.26No.1,2008pp.25-42qEmeraldGroupPublishingLimited0263-7472DOI10.1108/02637470810848877redevelopment.TheproblemwasbroughttothepoliticalagendabytheformerChiefExecutiveoftheHongKongSpecialAdministrativeRegion(HKSAR),theHonourableTungCheeHwa.Inhis1999PolicyAddress,“Outoftheexisting8,500urbanbuildingswhichareover30yearsold,some2,200requireredevelopmentorextensiverepair.Another3,900orsoalsorequirerepairsofvaryingscale.Intenyears’time,thenumberofbuildingsover30yearsoldwillincreaseby50percent...”(Tung,1999).Withtherapidurbandeteriorationandconsiderablepublicconcernaboutthepaceofurbanrenewal,theHKSARGovernmenthasdecidedtoredevelopsome2,000ageingordilapidatedbuildingsandimprove67hectaresofoldandrun-downurbanareasbasedona20-yearurbanrenewalprogramme(Housing,PlanningandLandsBureau,2001).InMay2001,theHKSARsetuptheUrbanRenewalAuthority(URA)toreplacetheLDC.ItsmotivationtoformtheURAistospeedupurbanrenewal.TheURAoperatesasanindependententity.ItbearsmorepublicaccountabilityandtransparencythanthepreviousLDC.TheURAhasbeentaskedtocomplete225projects(200newprojectsand25uncompletedprojectsoftheLDCforredevelopment)within20yearsandthecostinvolvedinmeetingthisgoalisestimatedatmorethanUS$38billion(MuiandSankaran,2004).Movingurbanrenewalforwarddemandsparticipationfromadiversegroupofstakeholders.Toexpediteurbanrenewalinthecity,theHongKongGovernmenthasadopteda“three-pronged”approach–initiatepublicsectorredevelopmentprojects,promotepropertymanagementandbuildingrehabilitation,andencouragemoreprivatesectorinvolvementintheprocess.TheURAwassetupasadedicatedagencytodealwiththefirsttwo“prongs”throughaholistic“4R”approach,namelyredevelopingdilapidatedbuildings,rehabilitatingpoorlymaintainedbuildings,revitalizingthesocio-economicfabricofolderdistrictsandpreservingbuildingswitharchitecturalorhistoricalsignificanceintheURA’sprojects(Lau,2005).Forthethirdprong,theLand(CompulsorySaleforRedevelopment)Ordinance(LCSRO)(Cap.545)wasenactedin1998toaccelerateurbanrenewalbyovercomingcertaindifficultiesoftenencounteredbytheprivatesectorinassemblinglandforredevelopment.Suchproblemsincludeunreasonablyhighpricesdemandedbyindiv