Rezoning is a major hurdle for Hong Kong’s future land supplyFebruary 26, 2014 / By
Hong Kong’s Chief Executive, Mr. C.Y. Leung, delivered his second annual Policy Address on 15 January 2014. In the Policy Address, the Chief Executive reiterated the government’s commitment to increase residential land supply in order to meet the new housing supply target of 470,000 units, which includes public and private housing, over the next decade. One of the key initiatives to achieve this target is site rezoning. In addition to the 65 Green Belt sites and Government, Institution or Community (GIC) sites identified last year, the government announced that it has identified another 80 Green Belt and GIC sites in various districts to be potentially rezoned for residential use this year. Whether all of these sites can be successfully rezoned in the foreseeable future remains to be seen. In fact, the progress of rezoning does not seem to be as smooth as some in the government and the market had expected which presents a challenge for the government to find enough land to meet the housing target.
Of the 65 sites announced last year, 36 are GIC sites, 13 are Green Belt sites and the remaining 16 are industrial sites. As reflected in the latest site rezoning progress, the statutory rezoning process has been completed or is being undertaken for 13 of the 16 industrial sites. Nonetheless, only half of the 36 GIC sites and one of the 13 Green Belt sites were successfully rezoned or were in the rezoning process as at end-2013. In aggregate, only 32 land sites have started or completed rezoning, representing 49% of the 65 sites.
This year, the government proposes to rezone 80 sites, which is 23% higher than last year. While the government has yet to release the existing land use distribution of these sites, more potential developments on Green Belt sites will likely see opposition from green activists and local residents living in the vicinity.
Indeed, there are a total of about 150 potential rezoned residential sites in the territory, which includes all the sites identified earlier on. These sites, if rezoned successfully, will be made available over the next 5 years and can potentially provide about 210,000 public and private housing units upon completion. Thus far, there are about 153,000 public and private units from identified projects to be completed in the next 5 years. If combined, it will account for about 77% of the 10-year housing target. However, the 210,000 units will only be realised if all the sites are successfully rezoned in the near term with the support of the local community. On the back of the worse-than-expected site rezoning progress, the realisation of 210,000 units could be at risk. Meanwhile, more sites will have to be identified going forward, otherwise, the government will likely face difficulties in achieving its 10-year housing target.
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