Small House Policy II: An Update April 2013 Mandy Lao Man-lei About Civic Exchange Civic Exchange is a Hong Kong-based non-profi t public policy think tank that was established in October 2000. It is an independent organisation that has access to policy-makers, offi cials, businesses, media and NGOs – reaching across sectors and borders. Civic Exchange has solid research experience in areas such as air quality, energy, urban planning, climate change, conservation, water, governance, political development, equal opportunities, poverty and gender. For more information about Civic Exchange, visit www.civic-exchange.org. About the author Mandy Lao Man-lei is a Project Manager at Civic Exchange. She graduated from Cardiff University with a masters degree in City and Regional Planning, (specialised in urban and built environment). Mandy has rich experience in directing and managing social and policy research projects. She is the co- author of the Rethinking the Small House Policy published by Civic Exchange in 2003. Her major research interests include urban built environment, public space design, community planning and sustainable development. 2 Preface & acknowledgements In 2003, Civic Exchange embarked on research to review the Small House Policy in Hong Kong and to identify associated problems and the way forward. The research project was the fi rst attempt by anyone to deconstruct the policy from a public policy angle with the hope of stimulating community deliberation in a rational manner. In the last decade, the administration has taken no action to address the issues related to the Small House Policy in Hong Kong, except that a review was initiated and a number of new procedures were implemented. Civic Exchange initiated another review of the policy in 2012 and this report represents the results. This report gives an overview of the development of the Small House Policy in the past decade, identifi es confl icts of interests among different parties including the HKSAR Government, and articulates the critical issues arising from the implementation of the policy. The Small House Policy has been under the spotlight in recent months. This report also captures the discussions and highlights the broader issues involved. It serves as a reminder to readers that the Small House Policy is an issue not only related to land rights and land use, but also related to conservation, city planning, and the legal, political and historical nexus of Hong Kong. We thank Mandy Lao, the author of this report, for her efforts in mapping out and unveiling the current status of the Small House Policy in Hong Kong. We are grateful to the WYNG Foundation for supporting this research project. We also benefi ted from the insights contributed by the following individuals: Stephen Brown, Loretta Ho, Lisa Hopkinson, Mike Kilburn, Alice Lai, Camille Lam, Samson Lee, Alan Leung, Christine Loh, Simon So, and Paul Zimmerman. We thank the Lands Department, Fire Services Department, and Planning Department for responding to our enquiries. We would also like to thank Bill Leverett for editing the English version of the report; Pauline Poon for translating the report into Chinese; and DESIGNNORM for designing the report cover and laying out the report. Yip Yan-yan Chief Executive Offi cer April 2013 3 Table of Contents Executive Summary ............................................................................................... 5 1. Background ........................................................................................................... 7 2. Policy Update (2003-2012) .................................................................................... 9 2.1 New procedures to streamline the process of small house applications 2.2 Preventing prior arrangement for transfer or disposal of small house applicant’s interest 2.3 Fire safety arrangements 2.4 Village Expansion Area 3. Current Status of the Policy Implementation ....................................................12 3.1 Small house application cases 3.2 Number of small houses and land area involved 3.3 Applications for premium assessment 3.4 Eligible indigenous villager population 4. Problems Associated with Small House Policy Implementation ..................... 15 4.1 Absence of interpretation of traditional rights 4.2 Discriminatory nature of the policy 4.3 Eligibility for small house grant 4.4 Policy administration 4.5 Property speculation 4.6 Planning 4.7 Unauthorised building works 4.8 Land resources 4.9 Environment 4.10 Governance issues 5. Perception of Stakeholders ................................................................................ 27 5.1 Government 5.2 Heung Yee Kuk 5.3 Indigenous villagers 5.4 Non-indigenous residents 5.5 Politicians 5.6 Green groups 5.7 Professionals and academics 5.8 General public 6. Discussion and Recommendations ................................................................... 34 6.1 Constitutional issues 6.2 Corruption and property speculation 6.3 Planning 6.4 Land resources 6.5 Environment 6.6 Governance 6.7 Overall Appendix ............................................................................................................ 40 Endnotes .............................................................................................................. 41 4 Executive Summary The Small House Policy (SHP), originally introduced as a temporary measure to address housing needs of indigenous villagers in the New Territories, has been in place for 40 years. However, the policy has been criticised as unsustainable and outdated while debates over the abuse of the small house grant have become one of the most challenging issues facing the administration. In 2003, the Civic Exchange report, Rethinking the Small House Policy, identifi ed numerous problems associated with its implementation. An offi cial review of the policy was initiated in 2002. However, it has been described as ongoing for over a decade without signifi cant progress, and new measures have been introduced which actually exacerbate the problems. The ongoing “review” has become an excuse for taking no action by the government in response to political pressure and public concern over unauthorised building works (UBWs) and other issues related to the SHP in recent years. This paper provides an update of the policy over the past decade (2003-2012); identifi es remaining problems and confl icts between different stakeholders, which consist of the government, the Heung Yee Kuk (HYK), indigenous villagers, non-indigenous residents, politicians, green groups, professionals and academics, as well as the general public; and fi nally suggests a way forward. The key changes to the administration of the policy since 2003 include the introduction in 2006 of new procedures to streamline the processing of small house grant applications to reduce the long waiting time, Interim Criteria in 2007 to streamline small house applications to the Town Planning Board (TPB), and relaxation of Emergency Vehicular Access (EVA) requirements in 2007. When updating the policy implementation status, it was found that the publicly available fi gures are inconsistent and fragmented with no regular update. The critical issues arising from the implementation of the policy over the past decade include: Absence of interpretation of traditional rights – there is no legal certainty on whether indigenous villagers’ rights under the SHP (the “ding” right) can be understood as “lawful traditional rights and interests” under the Basic Law. Discriminatory nature of the policy – the SHP is regarded as discriminatory to both female indigenous villagers, and to non-indigenous Hong Kong people who are not entitled to apply for a small house grant. Eligibility for small house grant – the Lands Department does not keep a list of eligible indigenous villagers who are entitled to the small house grant, and only village heads have the authority to verify the indigenous status of applicants, creating a situation conducive to dishonesty and irregularities. Policy administration – indigenous villagers were frustrated by the long processing time of small house applications, some of which were over ten years. At the end of 2011, there was a backlog of 10,255 small house applications. 5 Property speculation – the indigenous villagers have been able to profi t from their land grants, by selling their small houses or “ding rights” to outsiders. Planning – lack of comprehensive development plans and statutory plans has caused suburban sprawl across rural areas, bringing numerous unfavourable impacts to village environments. The Interim Criteria adopted by the TPB in 2007 relaxed planning controls on land adjacent to Village Type Development (V) zones, leading to uncontrollable sprawl of village houses in virgin land adjacent to villages. Unauthorised building works – the enforcement approach to UBWs appeared to be more lenient towards illegal structures on small houses compared to other urban buildings, giving an impression that small house owners were privileged. Land resources – the fundamental unsustainability of the policy is caused by unlimited demand but limited supply of land for housing. In practice, land for small house development has been increased by expansion of village areas and rezoning green belt land, giving planning approval for small house development outside V zones, illegal destruction activities that convert rural lands to “possible” development sites, and unlawful occupation of government land. Environment – haphazard development of small