People first approach to urban renewal

The following is the speech delivered by the Secretary for Planning and Lands, Mr John C Tsang, at the Anniversary Dinner of the Hong Kong Institute of Real Estate Administration this (November 27) evening:


Ladies and Gentlemen,


I am honoured to be the guest speaker at your anniversary dinner tonight. The topic that I have chosen is the People First Approach to Urban Renewal in Hong Kong. This is a timely subject because we are about to embark on an ambitious programme that will give a new life to our older urban areas and rejuvenate our urban landscape.





In the early seventies, old and dilapidated urban areas, including Sheung Wan, Wan Chai and Yau Ma Tei, were designated as Environmental Improvement Areas for urban improvement and redevelopment. However, the prevailing social economic conditions at that time were not conducive enough to effect any major changes, and the redevelopment process in these project areas was laden with difficulty. As a result, progress was slow.


The Hong Kong Housing Society also started its Urban Improvement Scheme in 1974. Although some progress was made, the overall impact was not significant. On the whole, the early attempts on urban renewal were piecemeal, disorganized and small in scale. With the best of intentions, they contributed little to the arrest of urban decay.


To prevent further deterioration of the urban environment and to improve the living conditions of residents in older urban areas, the Land Development Corporation, or the LDC, was established in 1988, tasked with the responsibility of urban renewal. The LDC model was, in fact, the first organized attempt at urban renewal in Hong Kong.





The LDC was quite successful in its early years when the property market was on the rise. With limited resources of its own, the LDC was able to attract joint venture partners to implement its projects. Significant achievements were made. However, in its latter years, when economic fortunes turned south, the LDC was constrained by three major hindrances:


* First of all, under the LDC Ordinance, the Corporation had to operate according to "prudent commercial principles" which meant that it could only undertake projects which were financially-viable. With the downturn in the property market, profitable projects were hard to come by.


* Secondly, the LDC had insufficient rehousing resources to accommodate tenants affected by its redevelopment projects. This hampered its ability to start new projects.


* Lastly, the land assembly process was time-consuming for the LDC because the Corporation was required by law to take "all reasonable steps to acquire properties" and to offer terms that were "fair and reasonable". In practice, this meant that the LDC had to conduct protracted negotiations with property owners and to make several rounds of offers before it could request Government to resume the remaining interests which the LDC could not acquire for its redevelopment projects.





It was clear to all concerned that the LDC model of urban renewal was no longer workable. In order to expedite the land assembly process, we had to introduce a new legal and institutional framework to take forward the urban renewal programme. In his 1999 Policy Address, the Chief Executive announced that an Urban Renewal Authority, or the URA, would be established to replace the LDC.


After lengthy and sometimes acrimonious debates in the community and in the legislature, the Urban Renewal Authority Bill was finally enacted in July 2000, and the URA was established on 1 May this year.


The new framework represented fundamental changes to the LDC model. Urban renewal will not be a "slash and burn" process. It will take a comprehensive and holistic approach that includes redevelopment of dilapidated buildings, rehabilitation of older buildings, preservation of buildings of historical, cultural or architectural interests and rejuvenation of forgotten neighborhoods. There are basically three differences between the URA model and the LDC model:


* One: the land assembly procedure under the URA model has been streamlined. The URA can now request Government to resume land without going through a protracted acquisition process.


* Two: the URA will have more rehousing resources at its disposal to accommodate affected tenants. The Hong Kong Housing Authority and the Hong Kong Housing Society have both agreed to be rehousing agents for the URA. Each agency will provide 1,000 public rental units in each of the first five years of URA's operation for rehousing tenants affected by URA's redevelopment projects.


* Three: financial and non-financial arrangements will be put in place to enhance the viability of URA projects. The principal objective is to encourage private sector participation and to provide for a self-financing urban renewal programme in the longer term.





The URA has been tasked with a gigantic and difficult mission. We believe that the urban renewal process should seek to maximize the benefits to the community by improving the living environment, upgrading community facilities and creating employment opportunities. At the same time, every effort should be made to minimize the adverse impact on people who are affected by these redevelopments.


Urban renewal inevitably brings disruption to people's lives. As the Western saying goes, "you can't make an omelet without breaking eggs". We recognize that urban redevelopment is impossible without tearing down buildings and moving people about. We recognize that disruption is inevitable, but we must find a way to implement our programme successfully while minimizing disruption to society.


To keep the adverse impact to a minimum, we have identified a host of measures in our recently published Urban Renewal Strategy entitled "People First - A Caring Approach to Urban Renewal". This document highlights Government's policy of placing in the first place the well being of the people. The URA is required to follow the guidelines set out in the Urban Renewal Strategy when preparing its draft 5-year Corporate Plan. I would like to share with you some of these principles:


* First of all, owners whose properties are acquired or resumed for redevelopment should be offered fair and reasonable compensation.


* Secondly, affected tenants should be provided with proper rehousing.


* Thirdly, there should be active public participation in the decision-making process. To make this last principle operational, social service teams would be set up to help affected people deal with problems arising from redevelopment and social impact assessments would be conducted by the URA as part of the project approval process.


These features put together may not necessarily provide the perfect solutions, and we will modify our approach along the way when we have acquired further experience, but we are certain that they will help to identify mitigating measures for the URA to help the affected people to reduce the adverse impact of redevelopment and to adapt to a new environment. They are useful tools that will help facilitate our arriving at a suitable solution for those concerned. Urban renewal comes only once for our neighborhood. Once the buildings are torn down and the people have been relocated, the neighbourhood will be changed forever, and there will be no second chance. A great deal is at stake, and that is why we must ensure that we get it right the first time round.





The newly-established URA faces immense challenges ahead. The Government has provided the URA with the necessary tools. The URA will need to work creatively and sensitively in partnership with residents, developers and not the least, professionals like yourselves to make the urban renewal programme a success.


Your Institute has all along been taking a keen interest in urban renewal issues, and you have provided us with many useful ideas and constructive comments. We appreciate that very much, and we look to your Institute's continued support in future in helping Hong Kong realize the goal of according a new life to our older urban areas. And that is a key component in our vision of becoming Asia's world city.


Thank you.


End/Tuesday, November 27, 2001