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3. Practical Issues and Challenges in

              Land Supply


                     There is an emerging discourse in the community that land supply
              does not necessarily have to rely on reclamations or development of new
              towns. The said discourse argues that there is still a large amount of land
              resources that has not been efficiently used in Hong Kong. Therefore, the
              formulation of land supply strategy by the government should prioritise
              optimising inefficiency in the existing land resources.

                     An example of the inefficient use of land resources is brownfield
              sites. “Brownfield sites” refer to abandoned agricultural or rural land in the
              New Territories that are converted into various other uses such as open
              storage, container yards, warehouses, and industrial recycling yards etc.,
              which are often incompatible with the surrounding environment.


                     OHKF believes that brownfield sites are only one of the many land
              supply avenues and are not enough to satsify all land demand. The vast
              majority of our brownfield sites are privately owned, and are with different
              operations. To develop brownfield sites, the process must involve such
              issues as land resumption, relocation, resettlement, and compensation.
              We have surveyed numerous public housing projects to be completed in
              the years 2015/16 to 2018/19 and established that whenever such issues are
              involved in these development projects, they all require an exceedingly long
              lead-time. Indeed, the several New Development Area (NDA) projects being
              pursued by the government cover a sizable area of brownfield sites.

                     In the United Kingdom (UK) where the “Brownfield First” principle is
              adopted, not only does the definition of brownfield differs from Hong Kong,
              most of their brownfield sites are vacant. It is estimated that while the UK
              would need up to 3.3 million new homes from 2015 to 2030 (15 years), total
              housing capacity of brownfield sites is only 1 million. In other words, if only
              brownfield sites are used for housing purpose, the country would see, on
              top of the shortage that it is already faced with, an additional shortfall of 2.3
              million homes in the next 15 years. Another study has also estimated that
              the new homes to be built on brownfield sites in London (instead of the
              UK) would cost an average HK$10,000 psf (adjusted as 2015 HK$), which is
              more or less the market price of private residential property in Hong Kong.


                     Taking into account that Hong Kong has not seen any large-
              scale land development projects for an extended period of time, land
              supply policy must follow a multi-pronged approach instead of prioritising
              brownfield sites, or any particular avenue of land supply over others.


              4. Land Reserve


                     While the decision to halt the supply of land and housing during
              the recession and property market slump of the late 1990s and early 2000s
              was justifiable given the circumstances; with hindsight, it makes one
              wonder that if the government were to start on the statutory planning
              requirements and works-related feasibility studies a decade ago, would
              the housing problem today be less severe. Indeed, a number of large-scale
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