Recently, Iris Tam, managing director of the Urban Renewal Authority (URA), suddenly resigned, citing fundamental differences with chairman Victor So.
She disagreed with the agency’s philosophy which she said makes it a real estate developer or broker for big developers.
At the same time, sources said So was planning an enhanced building rehabilitation scheme under which the URA will buy aging residential buildings at market prices in order to avoid paying ex-gratia allowances to property owners based on the value of a seven-year-old notional flat.
Obviously, So wants to explore the rental market by renovating old buildings and renting them out for a profit.
The URA’s “profit first” approach to urban renewal has drawn strong criticism from the public. There have been increasing calls to hold the agency to its social obligations.
But what the URA has undertaken in recent years under Tam’s leadership is no different from what private-sector players have been doing.
Tam first joined the URA as an executive director in 2006, rising to managing director in 2013.
In that time, the URA undertook a slew of controversial projects such as the Lee Tung Street redevelopment in Wan Chai, the Kwun Tong town center renewal and the Hai Tan Street project in Sham Shui Po, where hundreds of households and shops were evicted to make way for a luxury residential development.
The URA has been making billions of dollars in profit at the expense of hundreds of thousands of people.
Its net worth is about HK$23.9 billion (US$3 billion). It operates independently from the government and is supposed to be self-supporting.
But in the process, it relentlessly seeks profit whenever and wherever it can.
For instance, it drives down acquisition costs and takes advantage of surplus plot ratio from old residential buildings in order to build large luxury homes, maximizing profit.
By law, the URA has the power to seize old residential buildings, effectively accountable to nobody, a far cry from the “people first” approach it has pledged to adopt.
Despite having huge assets at its disposal, the URA often understates its finances, warning about diminishing returns from urban renewal projects.
In fact, the URA is a gigantic profit-hungry monster with an insatiable appetite for revenue, posing a serious threat to social stability and harmony.
Its enhanced building rehabilitation scheme ignores the interests of residents, forcing them to accept low compensation for their property in order to maximize profit.
The URA has not only failed to rebuild old urban areas but made a mess of rehabilitating old buildings. On the other hand, its large bureaucracy, which employs more than 400 people, is a drain on resources.
In my opinion, the URA should immediately dissolve itself for the sake of public interest.
Under the existing structure, no matter who is in charge, the URA will continue to be obsessed with revenue.
Only by respecting our culture, conserving historical buildings, fostering public participation and relocating residents in the same neighborhoods when the rebuilding projects are completed can the URA regain public trust and build a long-lasting relationship with the community.
The article appeared in the Hong Kong Economic Journal on Apr 20.
Translation by Alan Lee
[Chinese version 中文版]
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