Land planning face huge cut in spending

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The Finance Committee is examining the Estimates of Expenditure for the fifth day, yet no one seems to have noticed that the land planning budget is being cut by 34.7%.


It is claimed our government is searching high and low to find land for conversion to rectify the  housing shortage leading to unaffordable housing for Hong Kong’s aspiring homeowners. Our Chief Executive assures us they are moving heaven and earth to bring new land to market.  An unnoticed budget cut suggests the opposite.

In this years Estimates of Expenditure, the Government is cutting the budget for Buildings, Lands and Planning in the Development Bureau by as much as 34.7%. The reduction is even more seismic when compared to two years ago. In 2013-14, the actual spending was $527.6 million, $463.3 million last year and this year, it is estimated to be $302.4 million.

The expenditure deals with the land planning, registration of land, building safety and maintenance, and urban renewal.


The axe cometh

Initially, Development Bureau has not provided further explanation but only referred to the list of activities that the spending was for last year and will be used in 2015-16. Among those is a more expanded Land Sale Programme which involves 29 residential sites capable of providing about 16,000 private flats. A more detailed reply will be given in mid April.

Last financial year, the Programme offered a total of 20 residential sites, providing about 6,300 private flats. However, if we include the private flats created from railway property development projects, projects of the Urban Renewal Authority, private redevelopment and development projects, the aggregate number of private flats was over 20,300 by estimate. “This is a record high since the Government introduced the private housing land supply target in 2010”, Secretary for Development Mr Paul Chan said in February. This year, the estimate stands at around 28,000.

This may explain why the recurrent expenditure is estimated to go up by around $30 million. The non-recurrent expenditure is the reason for the big spending cut which it will be down from $300 million to $112 million. Last year, apart from introducing a few new regulations, one big focus was to continue the implementation of the Mandatory Building Inspection Scheme and the Mandatory Window Inspection Scheme. These are gone from the list the Development Bureau referred to despite the Schemes will continue to run. It seems the only thing new this year is to update the Hong Kong 2030: Planning Vision and Strategy Study. The Study will help formulate spatial development strategies beyond 2030 by forecasting the land demand.

The Development Bureau told Harbour Times that a detailed explanation will be issued in mid April. Stay tuned.