And so, on to the next mess…

Is the Hong Kong government’s proposal to develop new towns in the Northeastern New Territories New Development Areas going to be the next National Education trauma? In other words, are we going to see the administration of Chief Executive CY Leung insist that ‘x’ must happen, prompting huge numbers of people – especially photogenic ones – to take to the streets demanding that ‘x’ will not happen, followed by an eventual humiliating government retreat?

The answer is probably no. The NENTNDA proposal is not so much for an ‘x’ as for ‘a’, ‘b’, ‘c’ and so on. People who like ‘a’ will probably hate ‘b’, while people who like both of them will probably hate ‘c’. Ominously, the plan dates back to Donald Tsang, who announced New Development Areas almost as an afterthought during his vast orgy of infrastructure projects known as the 2007-08 Policy Address. It even has its own website.

The project is predicated on the assumption that Hong Kong has a severe shortage of homes and land. Some commentators say we don’t really need much new housing because so many apartments are in fact sitting empty. They don’t say how you can make them un-empty. As for land: yes, bits of the urban areas are horrendously overdeveloped, but that’s at least partly because other bits are underutilized. The problem is that in the eyes of the government, land must be used for what the lease and zoning regulations say. You can only change the restrictions via bureaucratic nightmares and the payment of such large amounts of money that you don’t bother. Another problem is that a large chunk of ‘residential’ land must be given to the Transport Bureau, who will cover it with gargantuan networks of highways, preferably with huge curling, multi-layered intersections over large expanses of bare concrete.

If we buy the ‘shortage of land’ story, then the NENTNDAs are as good a way to provide new housing as any. The main alternatives are to reclaim from the sea and kill pink dolphins or build over pristine country parks and ‘green lungs’ like South Lantau. (My favoured approach would be to evict Disneyland, the cruise terminal and other locust-bait and build dense but traffic-free new estates to flood the market with homes once and for all so we can forget property and get on with our lives, but what do I know?)

At this point, something has to go wrong, and that something is a One Country Two Systems Research Institute paper from around two years ago suggesting that the closed border area be used for things like mainland tourism. Around a month or so back, Apple Daily, in particular, dug it up and presented it as a plan to cede bits of Hong Kong to Shenzhen. Now NENTNDA is cursed as being part of a bigger strategy of Mainlandization. (To make things interesting, CY was a founder of the 1C2S outfit years ago.) An interesting semi-parallel here is the National Education Services Centre China Model booklet – a pro-Beijing group produces some lame publication and a government policy collapses.

The cast of participants and vested interests in the NENTNDA saga will be rich and complex. Among the more colourful are folk living (often rent free!) in a spacious, green pastoral idyll most of us can only dream of. Should 10,000 of these lucky amateur farmers, whose kids can ride bikes through deserted lanes, deserve space that could house 150,000 of the rest of us? Then you’ve got the ideological greens, people who spy a plot to serve Mainland interests, our own local developers, landowners eyeing fat compensation, the construction industry, the civil-engineer/bureaucrat lobby, tourism interests and probably more sniffing around.

In theory, officials could present a case that would win broad public support (as they say they have) for these mini-new-towns. The case would need to include clear, detailed pledges: all homes will be affordable and aimed at tenants or buyers currently stuck on public housing waiting lists or priced out of the private market; not a single square foot will be sold to non-permanent residents or non-occupiers; affordable retail/commercial space will also be provided for local small businesses to supplement the usual developer-landlords’ chains; there will be no tourist facilities; there will be cheap trendy transport options like electric buses so people can get to the urban areas with no problem; the butterflies and rare plants will be protected.

There you have it – a people-first vote-winner. Simple. But of course that’s not what Chief Secretary Carrie Lam is coming up with. It’s all vague, hand-wringing ‘trust me, I’m an official’. The government might talk tough, but there will be no-one to support it, so the vested interests and single-issue activists will smell fear. It won’t be a good-versus-evil struggle like National Education; it will be a messy, energy-sapping mud-fight.

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12 Responses to And so, on to the next mess…

  1. Bela The Builder says:

    Like French Polynesians, brought up to be children, when democracy enters their lives, Hong Kong people behave like children: petulant, selfish, dog-in-mangerish, whining me me ME!!!

    He who moans and pouts longest wins!

    Why didn’t the Muslims start demonstrating years ago? If they all drove taxis, we would have Sharia law already in Hong Kong!

  2. Maugrim says:

    Fernando Cheung Chiu-hung’s recent comment about the pro-dems needing to work with grassroots social change advocates is an interesting pointer about the future. Achieving action through LegCo is old hat, as are the dinosaur Dems. Young people and others are seeing that Wong Yuk-man and others are possibly achieving more via social activism. What is even more interesting is that we will see plenty more of these types of protests that concern quality of life and identity issues. The point is the DAB may have the means with which to control the ballot box, but there is discontent brewing amongst the more ‘downtrodden’ members of our society who have worked out that they do have power. BTW, the video that was posted the other day where it was said they’d be embarassed if it were ESF kids, do some checking.

  3. PropertyDeveloper says:

    If I was going there, I wouldn’t start from here! In the abstract, developing some of the NENT must be a better alternative than reclaiming land, boring underground honeycombs or developing the relatively pristine areas along most of the east coast of HK. These proposed areas, which I know well, are sparsely populated but so far gone as to be hardly worth preserving. Also, remember there will be tens of thousands of Shenzhen-ites pointing, grinning, leering and aiming 20-times zoom lenses at any northern facing windows or roof gardens, and the smells and noise may be slightly distracting.

    But… people don’t trust the One Country Two Systems Research Institute or the CE, a mistrust born of repeated attempts to pull the wool over our eyes. As you have often pointed out over the decades, a 5-year-old could do better than the government’s population projections.

    In addition, anything involving the border, even the word itself, generates a justified paranoia. Think Macau University-which-is-not-in-Macau, the Shenzhen loop, PLA patrols before the handover and recent mainland reclamation, or Chung Ying Street and undeground smuggling. So it may indeed get sticky.

    Why doesn’t CY try implementing a simple, fast measure that can reach general agreement, although, starting from here, one might be hard put to find one?

  4. Real Tax Payer says:

    Seems Hemmers and Alex Lo think alike:

    From Alex Lo’s “My Take ” today :

    “It’s déjà vu, and so soon. A government plan to build border towns in the northeast New Territories is threatening to be a repeat of the national education debacle. If the government is not careful, it will have another policy disaster on its hands”

    On the other hand hope is in the air . There was a certain business-like manner in the way the police cracked down on the illegal parallel traders , and I notice that some were jailed today for 2 months ( I just wish they would do the same with illegal car parkers , to whom the police now turn a blind eye)

    Also some genuinely bright guy today voiced the opinion that mainlanders – indeed anyone – who turns up with a suitcase of cash to buy a HK property should be subject to the same scrutiny as he would be if he took the money to open a bank account.

    Now that does make for some commonsense (except that I guess he could say he won it in Macau)

    And there’s Christine Loh hovering like a hawk ready to swoop down on the really nasty polluters sometime soon. Hope she is sharpening her beak and talons while she bides her time…..

    Hey ho, hey ho, the big lychee still has far to go.

    When you think that the USA has been trying learn democracy for over 200 years and they still can’t get it right and elect idiots like Bush Jnr. , and the Brits have been at it even longer , and had to decapitate a couple of kings on the way, maybe we are not doing too badly after 15 years . ( Mind you, I would greatly love to see Donald-do-almost-nothing-Tsang decapitated and a few evil tycoons hung , drawn and quartered )

  5. Mary Hinge says:

    It hardly helps the government, from an ‘openness and accountability’ perspective, that the last three letters of the acronym are “NDA”.

    Anyway, if it relocates or deflects locusts off the streets of HK Island and Kowloon, let’s just get on build these townships, I say.

  6. Gooddog says:

    I’m interested in your point that so many apartments are empty. It feels right, but is there any proof of this?

    Presuming it was true, one solution for the high cost of housing could be to encourage renting. For example an annual occupancy notice that each owner has to file, followed by a power of inspection. If an apartment is empty for over 75% of the year, an immediate fine is imposed based on the price of the property (maybe 1-3% of the property value). This would either encourage rentals or discourage empty investment. The truly rich could ignore it (but we’d get there money for the privaledge). There would be an exemption for periods of extreme economic depresssion (where there is simply no demand).

    The rationale for this would be that under the Government Lease the property owner has agreed to develop residential property (not investment property).

    The Lily in Repulse Bay is a classic. Priced hugely above market, it is still only partially occupied (presumably by plonkers) but they refuse to lower rents (why? I don’t know – presumably insanity). With this policy they would have to aggressively market the properties lowering prices and easing housing pressures.


  7. Stephen says:

    I think the idea is that more Locusts will come, relocate, gain P.R and out vote the locals so that their silly democratic ideas will never be realised.

    However there is hope. The Government is now so inept and the people (rightly) so suspicious that this is going to go pear shaped.

    As for the we’ve engaged / consulted the public (by sticking a notice full of government speak on a far away noticeboard) and they are all masterbating with excitement, it’s utter bollox and wearing a bit thin.

  8. gunlaw says:

    Judging by the scrum at Sun Hung Kai’s Citygate flats sale yesterday and the day before, Hong Kong people are as mad as ever about real estate. There is a shortage because with interest rates so low and when the real estate game is the only game in town, what else do you do with your money?

  9. Real Tax Payer says:

    @ Gooddog

    Jake van der Kamp has been proposing something like this for a long time.

    I forget the details, but it was/ the same commonsense approach that led someone in LEGCO today to propose scrutinizing people who but flats with suitcases of cash

  10. HermanGoringsArmpit says:

    The Lily = Chinachem.
    Explains everything for anyone who has had dealings with that deluded clan.

  11. Gooddog says:

    @ Real Tax Payer
    Thanks – I’ll track these down.
    Cy could be a real hero – the problems in this town are not intractable.
    Imagine bizarro world where Cy:
    1. Dramatically lowers locally produced air pollution with a few simple policies (no sump oil for boats, electric vehicles, etc). (pissing off transport tycoons)
    2. Introduces taxes, incentives and prohibitions to lower housing rent and costs. (pissing off home owners but maybe you can focus this on the mega property tycoons)
    3. Increases taxes on the mega-rich, raising benefts and raising the minimum wage. (pissing off tycoons)
    I’m off to my unicorn farm…

  12. Real Tax Payer says:

    @ Gooddog

    Here’s Jake’s idea , re- presented in today’s SCMP:


    Will someone do me a favour? Will someone please tell Carrie Lam that Hong Kong has 2.6 million homes for 2.35 million households, which means that about 250,000 flats in this town are vacant.

    The way to meet Hong Kong’s housing needs is to make proper use of flats already built, not to build more flats that cross-border speculators will then buy and keep empty on the reasoning that an empty flat fetches a higher resale price than an occupied one.

    You would have thought that bureaucrats who make pronouncements on housing might a least do a few minutes’ research on the basic facts, but members of the Leung administration do things backwards. First they start with a policy. Then they retract it. Then they hold a public consultation on it. Then they think a bit about what the policy should be. I’m not sure about the thinking bit.

    Here is another possible explanation for why the government is so eager to build more new towns. We start with Article 161 of the Basic Law, which states that the government may make no decision affecting the New Territories unless it has first paid off the Heung Yee Kuk.

    This article was breached when a cabal of cross-border political heavies quietly bought 87 hectares of contaminated mud on the Shenzhen River, transferred it to the Hong Kong administration after redirecting the flow of the Shenzhen River north of it, and then announced big development plans for it. The Kuk never got a look-see.

    I put it to Ms Lam that the latest new town proposal is a compensation pay-off to the Kuk for being cut out of the Lok Ma Chau Loop. The Kuk will block the Loop project until it gets its pay-off, and the Loop project absolutely must go ahead. Article 162 of the Basic Law says Hong Kong must always defer to the wishes of Guangdong political heavies.

    Thus, let us ignore this latest new town proposal as having very little to do with finding decent housing for bona fide Hong Kong residents who may legitimately expect more than the squalor in which illegal immigrants live. The question at hand is how to get occupants into those 250,000 empty flats. How do we make the speculator owners sell or lease them?

    And I have the answer to that question. What we shall do is institute a land development tax, an annual levy based on the market value of the floor area of each and every property if developed to the full extent that its lease allows.

    It would be nice if we could make this tax apply only to unoccupied property, but there would be too many ways to cheat on that provision. We shall have to make it apply to all property, but we would include commercial and industrial as well as residential.

    It would serve several objectives. In the first place it would sting non-resident speculators and start to induce them to lease or sell up, thus making more flats available.

    It would also push developers to build on their land banks as soon as possible rather than waiting years for better prices, as is so often the case now. Every year they wait, they would be stung again. Their empty lots would be taxed as fully developed property.

    In addition, it would serve the government as a finely balanced tool of urban planning. The lease conditions established by government would closely determine where incentives are greatest for private development.

    And, finally, a land development tax fully extended to all classes of property and stiff enough to have an effect on development policies could easily bring in as much as the salaries tax, which at present accounts for less than 12 per cent of fiscal revenues. Ours could be the first government in the world in a position to abolish personal income taxes. The whole world would sit up and take notice.

    But it won’t happen. The new town will be built and do nil to ease housing distress. Carrie Lam will then come up with yet more ideas that no one has thought out, no one wants and that will do us no good. Can anyone get through to her?

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