[Article] No land in sight?

How Hong Kong’s land policies imperil arts and sports development

Tobias Zuser

New recreation and cultural facilities face an uphill battle in Hong Kong, squeezed by a Government reliant on land lease revenues, Tobias Zuser writes.

The commonly held view, which has framed urban planning in the city for as long as most can remember, is that land in Hong Kong is scarce and therefore developments are often painstakingly re-evaluated or even purposefully delayed. At first glance, this might seem at odds with the global perception of Hong Kong. In recent years, the city has tried to rebrand itself as Asia’s new arts hub. It has received world-wide acclaim for the ambitious West Kowloon Cultural District project, which promises an array of top-notch arts venues such as the highly-regarded M+ museum.

Almost 20 years have passed since the original proposal for this dedicated new cultural district was put forward with the first venue – the Xiqu Centre for Chinese opera – scheduled to open in 2018. The progress of this major development, to be built on reclaimed land, has been overshadowed by several controversies, including the unexpected departure of two high-profile directors, Graham Sheffield and Michael Lynch. In 2015 the oversight of the project was subsequently handed to a civil-servant, who was joined by a real-estate developer in 2016.

The ongoing delays have also led to a sharp increase in construction costs, which the government tackled by downscaling the original plans and appointing several high-profile business figures as new board members – none of whom have an arts administration background.

Arguably, the flagship arts district has become a battlefield for real estate interests, which is not surprising given the city’s narrow income portfolio. In contrast to many other Asian mega-cities, revenues from land sales constitute Hong Kong’s second largest source of income. Hence, the development of areas dedicated to sports and culture has been notoriously difficult. Relying heavily on leases, the Hong Kong government is keen on regulating supply and demand for land by releasing new sites in a piecemeal fashion to help achieve high premiums from real estate developers through land auctions. This process is made possible by the peculiar rules around property rights in Hong Kong, where all land is owned by China and administered by the local government, which then grants leases to individuals, institutions or corporations for a certain period of time. As rightful owner, however, the government can revoke ownership rights prematurely, for instance by identifying a breach of the leasing contract.

These policies have had a major effect on the selection of sites which are deemed worthwhile for non-commercial purposes, leading to a brief history of failures in Hong Kong’s sports and arts landscape. The reception of spaces such as the Cattle Depot Artist Village or the Comix Home Base in Wan Chai has been lukewarm at best, given the heritage status of the buildings, which limits their usability significantly.

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On the same note, another highly anticipated creativity hub, the Police Married Quarters, has made more headlines on how it cannot be run profitably than anything else, while also undermining its own mission by renting units to commercial outlets. Away from the city centre, grassroots communities also struggle to sustain. In what has been widely interpreted as an attack on Hong Kong’s informal creative sector, the industrial buildings in Kwun Tong – for a long time the last refuge for artists to rent affordable space – are set to make way for the city’s second CBD area.

Interestingly, sports development projects have faced very similar challenges. In September 2016, the government announced it was terminating the lease for a 1.5-hectare piece of land on which one of Hong Kong’s leading football clubs, Kitchee SC, has just opened a new state-of-the-art training centre. At the same time, the Hong Kong Football Association had to wait several years before it was eventually given a former landfill site for its training grounds, made possible by the simple fact that the area cannot be profitably sold for other uses. Equivalent to the West Kowloon Cultural District, momentum is building to use Kai Tak, the barren land of the former airport, as the city’s future sports park, although the final plan and timeline have yet to be approved. Notwithstanding the nascent stage of the Kai Tak project, hot on the heels of its announcement the government decided to demolish the long-standing Wan Chai Sports Ground and re-zone it for new office buildings, on the assumption that the future recreational needs of residents should then be covered by the new park across the harbour.

On the one hand, the Hong Kong government remains reluctant to allocate larger areas of land for cultural or recreational purposes, as its annual budget greatly depends on the income from land leases. On the other, it has become complicit in the steady increase of land prices to maximise short-term profits, with real estate developers adding a high premium in return that favours commercial or high-income residential over recreational – or “public” – projects. At the same time, urban planning procedures follow the city’s unwritten laissez-faire paradigm and generally avoid imposing certain provisions on developers, such as requirements to incorporate non-commercial spaces in their developments.

The final outcomes of mega-projects such as the West Kowloon Cultural District and the sports park in Kai Tak are yet to be seen. But, under current land policies, both sports and arts facilities – despite their immaterial public value – have to compete primarily on the purely economic value of opportunity costs in a system inherently stacked against them. This not only slows down project completion, it has also undermined the strategic development of sports and arts in the city at large. Most recreational facilities are under the government’s direct management, except for a few privileged organisations and private clubs. However, once their leases end, they too will have to struggle with the burden of justifying their existence.

This piece was first published at Policy Forum, Asia and the Pacific’s platform for public policy analysis and opinion. Read the original here: http://www.policyforum.net/no-land-sight/

Photo: Daniel Case on Wikimedia