Compensation for Land Resumption | Simplified Grading, Sprinkling Money, and Cheap Landlords - Can You Speed ​​Up Land Resumption?

Hong Kong's land and housing issue is facing a severe "checkpoint". After repeated urging by the central government, the Development Bureau finally took action. After the earlier amendment was proposed to simplify the development process, it recently (May 3) issued a plan to speed up the land resumption process - - Optimizing the compensation arrangements for land owners and business operators under the government land resumption and demolition projects, including merging the "preferential zoning compensation system" from four levels to two levels, updating the parameters of the calculation formula for the regular adjustment of the zoning compensation system, relaxing Operating period and allowance area limit for open-air or outdoor business operator allowance.

The community has "liked and criticized" this, and many stakeholders welcomed it, believing that it would reduce the resistance to land acquisition; concerned groups were worried that the government's expenditure on land acquisition would increase greatly, which would be in the hands of the landlords, and it would be difficult to ensure that public funds were used properly.

Should policies ultimately be based on the interests of citizens or big landowners?

What is the point of spending public money if the government does not regain the right to lead land development?

The Development Bureau recently proposed to optimize the compensation arrangements for land owners and business operators under the government's land resumption project, and briefed the Legislative Council Panel on Development on Tuesday (10th).

(Photo by Yu Junliang)

The Development Bureau recently proposed to optimize the compensation arrangements for land owners and business operators under the government's land resumption project, and briefed the Legislative Council Panel on Development on Tuesday (May 10). Seeking approval from the Finance Committee earlier this month.

At present, when the Government requisitions private land in the New Territories for public use through the Land Resumption Ordinance, appropriate provision will be made to land owners, those who are using the land, or other eligible persons affected by land resumption or clearance operations. Compensation, etc.

The optimized compensation arrangement is mainly aimed at land owners and business operators. Among them, the two measures of increasing the amount of ex-gratia compensation and relaxing the allowances for business operators have attracted the most attention and doubts from the outside world.

Increase preferential compensation for

landlords to get what they want

The "Land Resumption Ordinance" stipulates two ways to compensate owners. One is the "compensation offer" proposed by the authorities. The relevant price is determined according to the Lands Department's preferential compensation mechanism, which is divided into agricultural land and residential land. As of April 1 this year, compensation for agricultural land The basic fixed rate is 1,085 yuan per square foot, and the real estate is 2,152.5 yuan; in addition, the agricultural land is divided into four grades A, B, C and D according to the development level, and then the basic fixed rate is 120%, 75%, 50% and 30%. Compensation price per square foot is calculated. The closer the land is to the new development area, the higher the compensation amount.

This optimization plan is related to this "preferential zoning compensation system".

First, combine the four zoning levels into two - "Level 1" is applicable to land required for development purposes, such as new development areas, housing, economic development purposes and related public facilities, and the compensation amount is equivalent to the current compensation level in District A ; "Tier 2" is applicable to land not required for development purposes, including rural improvement and conservation purposes, and the compensation amount is half of Tier 1.

Secondly, the government has updated the two parameters of the zoning compensation formula since May 3, and the overall compensation rate has increased.

Therefore, the first-grade agricultural land was raised from RMB 1,302 per square foot to RMB 1,510 per square foot, and the residential land was raised from RMB 2,583 per sq. 755 per square foot, and the land was raised from 1,292 per square foot to 1,498 per square foot.

It is foreseeable that, under the two-tier system, the amount of compensation available to land owners will increase. As expected by the Development Bureau, 500 hectares of private land will be recovered in the next five years, and the estimated land resumption expenditure will increase by 10% to 6.3 billion.

Senior surveyor Liu Zhenjiang even estimated that the cost of recovering 700 hectares of wetlands in the northern metropolitan area would double from 25 billion yuan to 50 billion yuan under the new plan.

(Photo by Lu Yiming)

DAB Legislative Council member Lau Kwok-hsun believes that increasing costs can reduce disputes over land resumption and help promote the construction of public housing.

Huang Shunhuan, co-convener of the External Affairs Committee of the Hong Kong Institute of Planners, also agreed, but reminded the government that if it wants to "buy time with money," it must properly manage financial issues.

At first glance, the new plan is not unreasonable. After all, "money can make a ghost run the mill", but is the problem really that simple?

Chen Jianqing, a member of the local research society, does not agree with the so-called optimization plan. Regarding "buying time with money," he believes that the key lies in the government's determination and courage. fasten the process.

Chen Jianqing is even more worried that once the authorities arbitrarily revise the original compensation plan, other serious problems may arise.

First, the simpler the classification, the more ambiguous the standards, the lower the transparency of decision-making, the more space the government can manipulate, and the greater the risk of being manipulated by landlords.

Chen Jianqing pointed out that although the four-tier mechanism cannot satisfy all stakeholders, the Lands Department will finally make compensation based on geographical location. It has also drawn up a color map to show the tiers, which will be updated every year for the public's reference.

However, if the mechanism is updated, the government will simply classify the grades based on "developmental purposes", which inevitably leads to suspicion that landlords may be more likely to influence or even dominate the boundary division, and directly obtain more preferential compensation.

It is worth mentioning that the transparency of the government's decision-making has shown signs of diminishing. The Lands Department has stopped providing compensation zoning plans for public inspection since March last year without announcing it to the public.

In this way, if the standard is simplified, it will only cause more doubts about "collaboration between officials and businessmen".

Chen Jianqing, a member of the local research society, does not agree with the so-called optimization plan. As for "buying time with money", he believes that the key lies in the government's determination and courage.

(Photo by Yu Junliang)

Secondly, human nature is inherently greedy. Landlords who succeed in raising the price of land may in the future eat the marrow and know the taste, creating greater resistance to land acquisition in exchange for more compensation.

Chen Jianqing expects that the new plan will also generate new disputes, "In the past few years, the rural faction has often proposed to raise the compensation price of farmland to Class A. In a sense, the government is letting them get their wish this time. It can be said that they are allowed to do so. Ask for anything."

Relaxation of industry allowances

should find a place to reset

In addition to the land owner, the government also provides compensation to the squatter residents and business operators when the land is expropriated.

The enhancement measures announced by the Development Bureau this time have also adjusted the “Ex-gratia Allowance for Open Air/Outdoor Business Operators”.

Under the original mechanism, business operators had to operate on the repossessed land for at least seven years to be eligible for this compensation.

In calculating the allowance amount, the upper limit of the open space allowance rate is 5,000 square meters, and the lower limit of the eligible area for the covered area allowance rate is 5 square meters.

The Development Bureau has relaxed the eligibility restrictions in two aspects: first, the operating period for obtaining the subsidy will be reduced from seven years to two years; second, the ceiling of 5,000 square meters of open space subsidy area will be abolished, allowing operators to obtain a subsidy equivalent to the area of ​​the venue. All allowances.

Chen Jianqing pointed out that there may be a conflict of interest between the land owner and the business operator, and the owner may force the tenants away early to obtain their allowances.

(file picture)

When the government lowers the requirements for applying for subsidies, it is indeed expected to make it easier for business operators to obtain more subsidies to make up for lost land, but the problem may not be so simple.

Chen Jianqing pointed out that there may be conflicts of interest between land owners and business operators. "In the past, we have handled many cases where the landlord forced the tenants away early to obtain their allowances." Similar incidents occurred during the period. At that time, the government only focused on "finding the ground" with the gentry and land rights holders, and missed the critical time for the "operation freeze", which exacerbated the problem.

However, the most important thing is that for business operations, in addition to allowances, business reset is more important.

At present, many brownfield sites have been converted into car parks and logistics yards, making it difficult for operators to reset their businesses, but the government has never actively thought about how to help them find a way out.

The government has no specific plan for assisting brownfield operators to move into multi-storey industrial buildings. It also reiterates that since brownfield operations are commercial operations, and finding a business location is a market behavior, the government will only offer monetary compensation.

The problem is that this kind of governance thinking in the name of "free market" allows the industry to fend for itself. Even if monetary compensation is provided, it is impossible to regenerate the industry. In the end, most of the big landowners benefit, and the victims are a group of small and medium-sized enterprises.

It is undeniable that the current land and housing problems are serious. Given the strong financial resources of the SAR government, a moderate increase in the compensation amount is indeed expected to remove the resistance to land resumption.

However, in the tug-of-war between speed and righteousness, can Libra reluctantly tip to one side?

Since public money is taken from the people, it is more reasonable and appropriate to use it. As Chen Jianqing reminded, “I believe that the biggest problem is whether the use of public money is for the big landlords, or to take care of those who are most affected in the process of land resumption. People? I believe that after this revision, the government will not make any further changes in the short term, but they have a lot of room to do better for the citizens who are really affected by land resumption.”

It is true that if the SAR government is unwilling to regain the dominance of land development, then spending more public money may not be of much significance.