Transfer of Development Rights Approach: Striking the Balance between Economic Development and Historic Preservation in Hong Kong Surveying and Built Environment Vol 19(1), 38-53 December 2008 ISSN 1816-9554 Transfer of Development Rights Approach: Striking the Balance between Economic Development and Historic Preservation in Hong Kong P Li* ABSTRACT Can the Transfer of Development Rights work in Hong Kong? This paper looks at the fundamentals of the TDR; the current control on property development and its effect on heritage buildings; the conditions for applying the TDR in Hong Kong; and examples of completed TDR cases, before concluding that the future looks promising for TDR applications here. It examines certain TDR cases like the early Letter B land redemption certificates; the redevelopment of the Hoover Theatre into the Paliburg Plaza and Regal Hotel in Causeway Bay; the HSBC Tower at 1 Queen’s Road Central; Tai Fu Tai at San Tin, Yuen Long; the Morrison Hall in Tuen Mun; the well-known case of the Ohel Leah Synagogue on Robinson Road, Mid-Levels; and the recent case of King Yin Lane at 45 Stubbs Road. With the establishment of the Development Bureau in July 2007 overseeing planning, land, buildings, works and heritage, it is possible to find the fulcrum between economic development and historical preservation. KEYWORDS Transfer of Development Rights Balance Economic development Historic preservation Hong Kong SBE *Faculty of Architecture, University of Sydney, NSW 2006, Australia 38 Email: [email protected] Surveying and Built Environment Vol 19(1), 38-53 December 2008 ISSN 1816-9554 INTRODUCTION Hong Kong has pioneered and practiced a form of the TDR since the 1960s. Based on a UNESCO-sponsored The government implemented a land conference paper in 1999, Cody (2002) redemption certificate system for land wrote an interesting article on the resumed in the rural area, which was Transfer of Development Rights (TDR) commonly known as the Letters A and as an incentive for historic preservation B. Lai (2000) argued that the Letter in Hong Kong. After examining the A/B system had the beauty of settling strengths and weaknesses of five TDR- compensation for resuming rural land related cases of the ‘Letters B’ land in the New Territories for small house redemption certificate (Nissim, 1999); development with minimal government the Lee Theatre; Pun Uk in Yuen Long; spending. the London Mission Building; and Cheung Kong Centre, he was cautious This worked so efficiently in the about the viability of this incentive transfer of development rights that scheme in Hong Kong. Cody (2002) suggested resurrecting the Letter B system. He also lamented the After a brief introduction, this paper unfortunate case of the Lee Theatre1 will consider the fundamentals of in Causeway Bay where no transfer TDR; the current control on property of plot ratio was permitted under the development and its effect on heritage rigid planning and density control buildings; the conditions for applying mechanism for ‘non in-situ sites’. TDR in Hong Kong; and examples of completed TDR cases, before coming Rationale behind the TDR to the conclusion that the future looks In essence, the TDR is the transfer bright and sunny for TDR applications of surplus development rights from here. a sending site to a receiving site. Commercially, the transfer of surplus The establishment of the Development development rights from one lot to Bureau in July 2007 - which puts another enables a developer to increase planning, land, buildings, works and density at the receiving site in a popular heritage under one roof - makes it district so that he can reap higher profit. possible to find the fulcrum between In the United States, developers benefit development and preservation. from the clarity and consistency that the TDR programmes offer (Pruetz, 1997), and they make development more FUNDAMENTALS OF TDR predictable. The sending lot owner can realize his unused development rights Early Practice of the Transfer of and recoup a lump sum from the sale. Development Rights The TDR can be applied in Hong Kong It can be argued that the difference as an effective tool in preserving many between the existing and permissible of the heritage buildings under threat plot ratio can be transferred and and at minimal public cost. Interestingly, SBE traded openly in the market place. 39 Transfer of Development Rights Approach: Striking the Balance between Economic Development and Historic Preservation in Hong Kong Surveying and Built Environment Vol 19(1), 38-53 December 2008 ISSN 1816-9554 Proceeds from these sales could be a series of paper in December 1998.2 used for preservation, maintenance or improvement of the historic heritage Government intervention can be in the buildings. This would perhaps help to form of issuing administrative orders ease the burden on public spending and against demolition; incentives measures provide an incentive for private owners like permission for transferring to maintain their private lot. development rights, and direct funding in repairing heritage sites. King Yin Need for Sustainable Development Lane was saved this way when the In his Policy Address the Chief owner and the Government reached an Executive spelt out a policy statement understanding on 25 January 2008. The on heritage conservation which was owner will surrender the whole site to endorsed by the Executive Council Government after restoration and an in 2007. Increasingly, the public adjacent slope site of similar size will is concerned about the hidden be granted to the owner for the same environmental and social cost of development parameter of 0.5 plot ratio development. This is expressed in and maximum three storeys, see http:// outcries and sometimes by radical www.amo.gov.hk/en/news_20080711. actions taken by green groups, php. consumer advocates and political parties. Conservation and economic CURRENT CONTROL growth are not mutually exclusive and are in fact compatible with each ON PROPERTY other. The need is to strike the balance DEVELOPMENT AND ITS between preservation and development. EFFECT ON HERITAGE BUILDINGS Theoretical Basis Increasingly economic considerations The Harsh Reality Facing Owners are taking precedence over cultural, The harsh reality for cultural political, social and aesthetic values conservation is that the market demand when it comes to making decisions and for properties has been so intense that in allocating resources for conserving prime sites with development potential cultural heritage. This trend is occurring are very much sought after. As evident in many countries and often decisions in older areas like Sheung Wan or about what and how to conserve are Wanchai, many pre-war buildings could strongly influenced by economic only provide low return for their owners considerations. The Getty Conservation because of their old age, functional Institute (GCI) of the United States obsolescence and rent control measures. has conducted in depth studies and In the meantime commercial retail attempted to bridge the gap between activities and large-space users had economic expansion and cultural expanded and moved to other popular conservation. The GCI invited various commercial areas. While government SBE prominent scholars to participate in their subsidies on repair and maintenance 40 research and published their findings in for private heritage buildings were Surveying and Built Environment Vol 19(1), 38-53 December 2008 ISSN 1816-9554 virtually unheard of until lately, there conditions form a solid base for land was little incentive for owners to hold related income to government. on to dilapidated or under-developed structures, which offered low income. Compensation to Owners of Declared Monument Buildings Existing Control Over Building The relevant Ordinance governing Development compensation for land resumption for The Planning Department, Lands conservation purposes is the Antiquities Department, and Building Department and Monuments Ordinance (Cap 53) are the key bodies that look after and enacted in 1976.3 Its main purpose maintain control on the real estate is to protect historic buildings and and building development relying, antiquities in Hong Kong. The spirit of respectively, on the Town Planning the Ordinance allows the authorities to Ordinance, the Government leases preserve significant historic structures and the Buildings Ordinance and for the public’s benefit and for the administrative Practice Notes (Lai, Ho enjoyment by future generations. and Leung 2004) . Frequently, when a site of historic It is worth mentioning that the interest is under threat or is about to be government has taken the view that demolished, the government announces terms of the Government leases can be in a Gazette n o t i c e a p r o p o s e d varied to allow changes in the use of monument status for the site. There land. This can be for a longer term in were two occasions when the proposed the form of lease modification or land monument status was used, firstly in exchange, or for a temporary basis the case of the Ohel Leah Synagogue in such as short-term waivers for minor 1986, and in the case of the Morrison changes of uses. These changes of lease Hall at Tuen Mun.4 Ohel Leah Synagogue Morrison Hall Figure 1: Government declared a proposed monument status for both the Ohel Leah Synagogue and Morrison Hall in order to preserve the buildings. SBE Source: photo by Raymond Chan 41 Transfer of Development Rights Approach: Striking the Balance between Economic Development and Historic Preservation in Hong Kong Surveying and Built Environment Vol 19(1), 38-53 December 2008 ISSN 1816-9554 A Declaration of ‘proposed status’ is Hong Kong practiced some kind of valid for twelve months and may be transfer of development rights in the extended. However the affected owner form of land redemption certificates may object to the ‘proposed’ status. commonly known as Letters A and B If an objection fails, he can make an during the 1960s to 1980s.