Abstract
The high property price syndrome in Hong Kong has led to heightened concern about the role of landed capital in property development. Recently, the hegemony of the real estate industry has become a buzzword in local literature, but unfortunately there is neither adequate theoretical articulation nor informed understanding of the concept of hegemony. There is widespread misunderstanding of hegemony, equating it to domination by property tycoons. The local literature has overlooked the government-business collusion in constructing the common sense of society so as to dominate others. Through an empirical investigation of the redevelopment of ‘Government/Institution or Community’ (G/IC) land in Hong Kong, this article attempts to offer an alternative explanation to the land question of G/IC redevelopment by highlighting that the everyday life of the silent majority and of professionals has in fact perpetuated the hegemony of the real estate industry in Hong Kong. It is argued that the government, property developers, professionals, charitable organisations and the general public have altogether participated, in different ways and to different extents, in the capital accumulation projects of leading developer conglomerates in Hong Kong. A land (re)development regime has thus contributed to the property boom in Hong Kong.
Introduction
Hong Kong relies heavily on real estate development as a platform for wealth accumulation. The former Secretary for Housing, Planning and Lands, Michael Suen, has openly admitted that ‘the property sector, closely interwoven with every single aspect of our daily life, has been the major pillar of our economy’ (Hong Kong Government, 2002: 1). Those giant conglomerates such as Cheung Kong Holdings, Sun Hung Kai Properties, Henderson Land and New World Development have effectively controlled not only the property market but also a wide range of public utilities, services and retail businesses. Although they play an influential role in our everyday lives, the majority of society remains silent. This is an interesting phenomenon that is worth studying.
Recently, skyrocketing housing prices have attracted attention to the domination of the real estate industry in Hong Kong. Both scholars and practitioners have attempted to debunk the myth of the spontaneous property boom by attributing it to inadequate land supply (Development Bureau, 2012; Peng and Wheaton, 1994; Yung, 2011), speculation, an oligopolistic housing market and the hegemony of the real estate industry (Poon, 2005). Whilst hegemony has recently become the buzzword in Hong Kong society, unfortunately the existing literature fails to recognise that the continuous property boom is deeply locked in the hegemonic construction of the land (re)development regime which is made possible by all sections of society including government, professionals, businesspeople and the general public. With their vested interest in land, it is obvious that real estate developers and the government will actively promote property development as the norm (which is a source of economic growth) through various propaganda campaigns. At the same time, the general public, with a strong desire for homeownership, has unconsciously sustained the spontaneous property boom through home purchase. Thus, the government-business collusion in constructing the common sense of the society perpetuates the hegemony of the real estate industry.
Although there is a burgeoning literature on the domination of landed capital in property development (Bromley, 2004; Cheng, 2001; Goodstadt, 2005; Poon, 2005; Smart and Lee, 2003), there is neither adequate theoretical articulation nor informed understanding on the concept of hegemony. Even in Poon’s (2005) popular book, there is no elaboration on ‘how the government and the landed and property capital collude to construct the common sense of the society so as to dominate others and why the people have remained the silent majority and been exploited’ (Tang et al., 2011: 90). Beyond pointing fingers at real estate developers, a gap remains to be filled on the construction and perpetuation of hegemony through socialisation in our everyday life. In particular, hegemony is present in each and every aspect of urban development.
Whilst there is widespread misunderstanding of hegemony, equating it with the domination of property tycoons, in-depth empirical analysis on the hegemony of the real estate industry is still wanting. To make up for this deficiency, Lefebvre’s idea of urbanising hegemony will be adopted. Drawing on the phenomenon of rezoning G/IC 1 land for housing development, this article attempts to offer an alternative perspective on how the land (re)development regime forms and perpetuates through the participation of all sections of society and hence achieves hegemony in the production of space. In Hong Kong, the majority of people are conscious in their intention to purchase property from or sell land to property tycoons, but they are unconscious about the implications of this. Instead of challenging the dominant coding, their buying houses for home ownership (the general public) and selling land to developers (charity organisations) will further perpetuate the unequal power relations between property tycoons and the silent majority of the public. Without having to resort to coercive measures, the incubation of the goal of home ownership has resulted in the spontaneous consent of the majority. Therefore, there has been no significant opposition towards change in use over the past few decades. There have been some public objections towards G/IC redevelopment due to opposition to the Hong Kong government, but this is a different issue.
In various official propaganda campaigns, the government has created an illusion that the current housing problem is due to insufficient supply of housing, which is in turn attributed to the insufficient supply of land. The reality is that house prices have been allowed to increase to a level unaffordable to ordinary citizens. The crux of the matter is private appropriation of socially produced benefits.
This article is divided into three parts. The first part will briefly review the existing literature on hegemony. It will be followed by a discussion of the hegemonic construction of the land (re)development regime in Hong Kong, which serves as the basis for the empirical analysis of planning applications on G/IC sites in the third and fourth parts of the article. The final section concludes with a discussion on the hegemony of the real estate industry in Hong Kong.
The problem of hegemony
Gramsci’s theory of hegemony has long been an influential concept in politics. While acknowledging the need for contextualising Marxism, Gramsci develops his philosophy of praxis which is tied to current material conditions. To him, hegemony is exercised through: the ‘spontaneous’ consent given by the great masses of the population to the general direction imposed on social life by the dominant fundamental group; this consent is ‘historically’ caused by the prestige (and consequent confidence) which the dominant group enjoys because of its position and function in the world of production. (Gramsci, 1971: 12)
Hegemony involves a creation of the common sense of a society by the dominant group which is generally supported by all sections of society. This is made possible by non-coercive social institutions and organic intellectuals.
Gramsci’s idea of hegemony has been widely interpreted by different scholars (Borg et al., 2002; Ekers et al., 2012; Kreps, 2015; Sassoon, 2000). Due to his popularity in cultural studies, Gramsci’s problematic of hegemony has been applied to Hong Kong in the areas of, among others, education and identity (Tse, 2007), out-reach social work (Cheung and Ngai, 2009), art (Cartier, 2008), media (Fung, 2007), visual struggles (Garrett, 2014) and immigration (right of abode) (Ku, 2001). These studies (see also Ku and Pun, 2006) are welcome, as they are important to our understanding of some aspects of hegemonic construction in Hong Kong. In addition to the local literature, the concept of hegemony has been extensively discussed in overseas contexts (Gidwani and Paudel, 2012; Whitehead, 2012) in fields such as education (Apitzsch, 2002; Kim, 2012; McMaster, 2013) and media production (Burch and Harry, 2004; Evans, 2002). In particular, the concept of hegemony in everyday life has often been invoked in recent debates on urban development (Davies, 2014; Loopmans, 2008), housing (Shadar et al., 2011) and tourism (Avdikos, 2011). A recent work of Ekers and Loftus (2012: 16) argued that Gramsci offers an approach to ‘space, nature, politics, and difference through emphasizing a historicist and spatial method that is rich in possibilities for political practice’. Among them, Lefebvre’s (1991) call to urbanise Gramsci has been particularly influential.
In Lefebvre’s work (1991, 2003a, 2003b), hegemony is reformulated in terms of everyday life and the production of abstract space (Brenner and Elden, 2009). To Lefebvre, everyday ‘designates the entry of daily life into modernity … the concept of “everydayness” stresses the homogenous, the repetitive, the fragmentary in everyday life’ (Nelson and Grossberg, 1988: 87). The rise of capitalism and its penetration into everyday life has become so significant that it reconstructs the relations of space (Butler, 2012). Under capitalism, ‘whatever is concrete, useful and particular in space becomes abstract, money-driven and universal, as space everywhere is repetitious, homogeneous, commodified and gender-biased’ (Tang et al., 2011: 91). Commodified capitalism through the introduction of new consumer goods has modified the daily routines of work, leisure and family life. The diffusion of bourgeois culture through commodification is so pervasive that everyday life is saturated, thereby discouraging revolution. It is the production of such abstract space which is conditioned by the logic of exchange value that becomes hegemonic. The abstract space envelops the hopes of the underprivileged population which have become part and parcel of their everyday life. It is so powerful that spatial consensus is achieved among users, thereby discouraging violence.
In recent decades, scholars have begun to challenge the aspatial conception of society. Among them, Kipfer (2012: 87) emphasises that Gramsci’s concept of historicism has a ‘spatial character’. In his earlier work (Kipfer, 2002, 2008), he has highlighted the contribution of Lefebvre in probing into a critical question of space by questioning, ‘is it conceivable that the exercise of hegemony leaves space untouched?’ (Lefebvre, 1991: 10). Lefebvre has brilliantly shown ‘how space serves, and how hegemony makes use of it, in the establishment, on the basis of an underlying logic and with the help of knowledge and technical expertise, of a “system”’ (Lefebvre, 1991: 11). As pointed out by Elden (2004: 181), the production of space is ‘a theme that has explicit political aspects, and is related to developing systems of production within capitalism’. By analysing the everyday life through ‘theory and praxis’ (Elden, 2004: 113), it is possible to bring out ‘the extraordinary in the ordinary’ (Elden, 2004: 111).
Allen (2003) further focuses on how spatiality is imbued with power. A particular social group may ‘subvert or disrupt the dominant or controlling rhythm’ through their routine and imaginative use of space. Whenever such a spatial contradiction occurs, the ability of the dominant group to ‘represent space in a particular way, to code it in a manner that suggests that only certain groups are present’ (Allen, 2003: 162) is the issue of concern.
Apart from the state, the role of ‘organic intellectuals’ (urban specialists in particular) is also crucial in the exercise of power. Lefebvre (1991: 45) argues that the representation of space by those urban specialists ‘supplants the concept of ideology and becomes a serviceable (operational) tool for the analysis of spaces, as of those societies which have given rise to them and recognized themselves in them’. This is problematic as urban space is represented and coded with the fragmented knowledge of those urban specialists insisting on technical rationality. In such a way, the space is depoliticised and hegemony is thus achieved.
In sum, it is clear that the concept of hegemony is not simply equivalent to the domination of a particular social group. The consent of the majority to the dominant coding or the re-appropriation of everyday spaces by the silent majority may affect the hegemonic construction of the dominant over space. In the following sections, we will adopt Lefebvre’s idea of hegemony and turn to the broader issue of the hegemonic construction of the land development regime in Hong Kong.
The land (re)development regime and the real estate industry in Hong Kong
The popular argument for the spontaneous skyrocketing of housing prices in Hong Kong is the scarcity of land due to topographical constraints. It is commonly thought that the limited supply of developable land in the face of increasing demand automatically pushes up land prices, contributing to unaffordable housing prices. To the government, increasing the land supply is generally understood as the means for combating the continuous soaring of property prices (China Daily Hong Kong Edition, 2012: H04). However, this is not the crux of the problem. Lai and Wang (1999) have found that there is no direct relationship between land supply and developers’ decisions to increase housing supply. Rather, it is important to investigate developers’ profit maximisation strategies in property development. Tang (2008) also draws our attention to a land (re)development regime which is firmly rooted in the development trajectory of Hong Kong. This trajectory can be traced to the way British colonialism interacted with the traditional Chinese spatial administrative hierarchy and customary land practices (see Tang, 2014).
Unlike other consumption goods, housing has become a commodity that not only enables private developers to accumulate capital but also allows the government to secure a source of income through the land development process. Due to its high exchange value, housing becomes a commodity for both consumption and speculation. The rise of a land (re)development regime can be traced back to the mid-1950s. The introduction of ‘sale of flats by floor’ and ‘installment’ in the property market resulted in unprecedented growth in housing demand and speculation. Buyers and investors queuing up for flat sales was a common scene in the 1950s and 1960s (Feng, 2001). Through the participation of all sections of society, money flushed into the property market, which served as a basis for the development of a land (re)development regime. Coupled with the retreat of British property investment companies under the threat of political unrest on the Mainland and in Hong Kong, a hegemonic bloc of local Chinese developers emerged. Apart from the property market, the structural change in the stock market further enhanced the dominance of developers. The Far East Stock Exchange Limited set up in 1969 ended the monopoly of foreign companies in the stock market. Through raising funds from the stock market in the 1970s and early 1980s, these Chinese companies managed to increase their land banks through acquisition of some ‘land-rich utility companies’ which further strengthened their ‘dominating position in the property market’ (Poon, 2005: 45). They also benefited from the new town programme, as many big developers such as Sun Hung Kai Properties and Henderson Land were ‘the most aggressive of buyers of agricultural land and land exchange entitlements in the New Territories in the 1970s and 1980s’ (Poon, 2005: 45). The restriction on land supply (that is, 50 hectares per year) under Annex III of the Sino-British Joint Declaration in 1984 was another golden opportunity for capital accumulation by large developers. As land supply would be limited in the near future, the escalation of land and property prices was an inevitable result. This restriction further fuelled the property market. The government has a vested interest in land – as a landlord, it is eager to maintain high property prices so as to secure income through the sale of land. It therefore produced the illusion of a land scarcity problem so as to justify its high land price policy. It is therefore not surprising to find that the business-government collusion is eager to ‘employ the real estate sector as the source of the economic multiplier’ (Tang et al., 2011: 95). As a property state, the real estate industry in Hong Kong not only ‘forms a significant portion of the national wealth, but also has an important role in the whole economy’ (Haila, 2000: 2241).
Hong Kong has been characterised by a pro-business administration in both the colonial and post-colonial periods. It is a tradition that business leaders are well represented in the government’s advisory committee and councils. The appointment of the first Chief Executive of the SAR government (Tung Chee Wah, from the business community) gave rise to a great deal of speculation that ‘Beijing’s promise of “Hong Kong people ruling Hong Kong” would transpire to be “business people ruling Hong Kong”’ (Tang, 1999: 275). All these echo with the allegation that Hong Kong’s economy is controlled by a few ‘property-cum-utility/public services conglomerates’ which are owned by: powerful Hong Kong families: the Lis of the Cheung Kong/Hutchison group, the Kwoks of the Sun Hung Kai Properties group, the Lees of the Henderson group, the Chengs of the New World Development group, the Pao and Woo of the Wharf/Wheelock group and the Kadoories of the CLP Holdings group. (Poon, 2005: 13)
This is also confirmed by the Consumer Council (1996) report that there was a ‘high degree of market concentration among developers from 1991 to 1994 … [by which] 70% of total new private housing was supplied by seven developers’ (Consumer Council, 1996: 5). There is no sign of improvement from our recent analysis on the sales record of first-hand residential properties. From 1998 to 2011, some 40% of new residential properties for sale were supplied by five large developers. It is also evident that the URA chooses to partner with large developers in its redevelopment projects (Table 1). Skyrocketing house prices in these ‘gentrified’ enclaves have further widened the gap between the rich and poor. This redistribution of benefits from the original owners of the dilapidated housing before redevelopment to big developers after redevelopment has raised concerns about the oligopolistic control of the property market.
URA redevelopment projects for sale, 2005–2012.
Source: Compiled by the authors from the sales records for new residential properties provided by Centaline Property Agency Ltd.
The message of ‘how to manage the [gentrification] process to help us to achieve a more equitable and just society’ is clear in recent literature on urban redevelopment (Freeman, 2006 quoted in Lees and Ley, 2008: 2382). Achieving an equitable and just society is extremely difficult, if not impossible, in a capitalist society like Hong Kong. This is because of the conflicting roles of the government as ‘landlord, administrator and the guardian of public interests … which makes town planning difficult in practice’ (Lee and Tang, 2009: 331). As the government heavily relies on land sale for its revenue (Table 2), the resulting economically-biased policy agenda is often in conflict with its role as guardian of public interests. This is evident in its decision to halt the production and sale of subsidised flats (HOS) in order to save the property market which was badly hit by the Asian Financial Crisis in 1998. In sum, the business-government collusion enhances the development of a land (re)development regime.
Land revenues in Hong Kong, 1995–2014 (in HK$ million).
Note: 1Includes property tax, stamp duties, general rates, properties and investments, land fund, land transactions and land premium.
Redevelopment of G/IC land in Hong Kong
Setting the scene
The development of urban areas in Hong Kong is controlled by land use zonings stipulated in the Outline Zoning Plans (OZPs). These zonings show the planning intention of each land parcel. G/IC zoning is designated for the development of public buildings such as churches, town halls, schools and hospitals. As Hong Kong is a compact city, some low-rise G/IC developments also serve as ‘breathing space’ within a high-density and high-rise concrete jungle (Town Planning Board, 1999). In order to meet present and future needs, land is reserved for G/IC use. Whilst the G/IC zoning is primarily designated for public uses, a limited range of other, compatible uses are also allowed. This is to give site owners a degree of flexibility to respond to market changes through the planning application system. 2 As Hong Kong needs land revenue as income, it is not surprising to find that some profit-making uses such as flats and hotels (technically compatible, but incompatible in terms of nature of use) can be applied for within G/IC zones under the current planning application system. This facilitates developers in maximising profit from G/IC land. The existing planning system facilitates the change of use from G/IC to revenue-generating development by retaining a small G/IC component on the site. This has the effect of perpetuating the hegemonic construction of the land (re)development regime in Hong Kong.
The methodology
Planning applications are a rich source of data to unravel developers’ responses to market changes and, at the same time, the government’s attitude towards such changes. In the existing literature, there is a considerable amount of quantitative research on the decision-making process for planning applications (Lai, 1998; Lai and Fong, 2000; Lai and Ho, 2001a, 2001b, 2002a, 2002b; Lai et al., 2004). While these econometric studies are useful for understanding the statistical distribution of planning outcomes at a case-by-case level, the operation of the development control mechanism in the wider context of the hegemony of the real estate industry has been ignored. Redevelopment of G/IC sites is not merely a technical process of land use changes; it is also a question of power and justice, as it involves the redistribution of benefits from the public to private developers.
In order to probe into the redevelopment processes and the hegemony of property development, a two-level analysis is adopted. At the territorial level, planning applications and rezoning requests for change of use in G/IC sites from 1990 to 2015 will be analysed. A temporal analysis of these applications 3 enables us to capture the historical trend and its response to property cycles and government policies. At the district level, case studies are selected to scrutinise the interplay of developers, urban experts, the government, non-government organisations and the general public in the redevelopment process. This is done by in-depth interviews with relevant stakeholders including professional town planners, priests and parishioners, as well as documentary analysis of the TPB papers and archive materials.
Planning applications for G/IC land from 1990 to 2015
There was a total of 438 cases for whole-site redevelopment from 1990 to 2015 (Figure 1). The total number of applications in the 1990s was significantly higher than in the 2000s, coinciding with the Hong Kong property boom from 1991 to 1997. The highest number of applications was seen in 1994. Following the Asian Financial Crisis in 1998, the property market was weakened and production of flats fell to its lowest in 20 years (Nissim, 2012). Therefore, a drop from the rising trend in 1998 was also observed in G/IC redevelopment. In 1998 and after, there was a significant fall in the total number of planning applications from 34 in 1997 to six in 2014. It is clear that the trends of G/IC redevelopment follow the boom and bust cycle of the property market. G/IC sites are therefore an integral part of property development in Hong Kong. They are particularly appealing to developers for three main reasons. First, G/IC sites are mostly located at prime urban locations with unrestricted leases 4 which do not require the payment of a premium upon redevelopment. Second, they are under single ownership (either by a charity organisation or religious institution), which is easier for negotiation. Third, they are readily available for developments which do not require extensive site formation. It is therefore not surprising to find a considerable number of planning applications within G/IC zones during the property boom.

Planning applications for whole-site redevelopment of G/IC sites in Hong Kong, 1990–2015.
In terms of the proposed uses, about 81% of the planning applications were for redevelopment into residential or residential/commercial uses (Figures 2 and 3). There was also a considerable number of rezoning requests from G/IC to residential uses. Apart from the influence of the property market, government policy also plays a significant role in affecting redevelopment of G/IC sites, as shown in an increase in hotel applications after the implementation of the individual visit scheme in 2003. Instead of representing G/IC sites as spaces of public interest, the government ‘codes’ them in a manner that allows flexibility in the development of space for private uses. It in turn facilitates the capital accumulation process of developers by treating G/IC sites as tradable commodities.

Planning applications for proposed residential development within G/IC sites, 1990–2015.

Planning applications for proposed commercial/residential development within G/IC sites, 1990–2015.
Case studies: The hegemony of the real estate industry
There are notable examples of low-rise churches, elderly homes, as well as schools being redeveloped into high-rise residential and office buildings where the original G/IC components have been reduced to a small portion of the site. Two proposed redevelopment cases, a church at No. 1 Star Street in Wanchai and Ebenezer School and Home for the Visually Impaired in Pok Fu Lam, are selected to examine different stakeholders in the hegemonic construction of the land (re)development regime in Hong Kong.
Property tycoons: Spreading their influence on the G/IC landscape
To property tycoons, G/IC sites are ‘cash cows’ in land development. As there are fewer and fewer developable sites in urban areas, G/IC sites under single ownership are a welcome source of cheap land to developers, especially ones with unrestricted leases. This view is confirmed by a senior town planner in the Planning Department:
5
Many churches and welfare institutional sites are held under unrestricted leases which do not have any stipulation of user restrictions. Since the land is not restricted to a particular type of use under the old lease, the developer does not need to apply for lease modification for the change of use and hence, no payment of premium is required. This significantly lowers the cost of development and hence, maximizes the profits.
This issue of ‘restricted and unrestricted leases’ points to complex entanglements with the issue of hegemony around real estate, as opposed to other commodities. The real estate industry will take advantage of those G/IC sites with unrestricted leases to maximise its profits because developers do not need to apply for lease modification for redevelopment, and therefore avoid paying a premium to the government. On the contrary, G/IC sites which are held under restricted leases are less attractive. For these, developers need to apply for lease modification for any change in use and a premium is required because of the change in land value (that is, before and after value of the land parcel). This also explains why the hegemony of real estate works differently in different contexts. In the New Territories where the land tenure system is complicated by a small house policy and the Tso/Tong system, developers are less interested in redevelopment as there are limited G/IC sites with unrestricted use.
The domination of property tycoons in the redevelopment of G/IC sites is discernible from an analysis of the sales records of new residential properties 6 (Table 3). For example, No. 1 Star Street was redeveloped from G/IC sites into composite residential development by Cheung Kong Holdings Ltd. Star Street is one of the oldest streets in Wan Chai and was originally occupied by local Chinese and the Church. A wave of redevelopment started in the 1990s. Upon redevelopment of the Church, the residential units of No. 1 Star Street were sold at HK$4936/sq. ft. (in 1999) and skyrocketed to HK$19,824/sq. ft. in 2015. Other developers also seized the opportunity for profit-making by initiating further redevelopment and revitalisation work in the vicinity. This has completely changed the entire neighbourhood from a quiet and old residential district of Chinese tenements into a ‘Starstreet Precinct’ of stylish galleries, cafes, restaurants and luxury housing. Developers not only redevelop the hardware, but also promote a new ‘middle class’ lifestyle which invites people to rediscover their passion for life. Such a transformation is an outcome of the spatial processes of negotiations under unequal power relations in a capitalist society. All these changes result in a significant increase in land and property values. The land (re)development regime is, therefore, perpetuated.
Selected redevelopment of G/IC sites by planning applications.
Source: Compiled by the authors from planning applications data provided by the Town Planning Board and sales records for new residential properties provided by Centaline Property Agency Ltd.
In sum, the influence of property developers is well beyond the site, extending into our daily lives. Hegemony of the real estate industry involves ‘the exercise of bourgeois influence over culture and knowledge, institutions and ideas as mediated by policies, political leaders, parties, intellectuals, and experts’ (Kipfer, 2008: 199–200). It is noted that the intentions of property tycoons could not have been realised without the concerted efforts of the government, professionals, charity organisations and the general public.
Charitable organisations and the general public: Participating unconsciously in the capital accumulation process
Religious institutions in Hong Kong established with funding mainly from non-government sources and private donations from wealthy parishioners. They built churches, schools, elderly homes, child care centres and other welfare facilities on land designated for G/IC uses. After many years of operation, they face the problem of aging facilities which need large-scale renovation. Without a stable source of government subsidy, many of these religious institutions have no alternative but to rely on property tycoons for either donations or purchase of land/properties owned by them.
No. 1 Star Street was originally occupied by Our Lady of Mount Carmel Church under the ownership of the Catholic Diocese. As early as 1845, this area evolved as a Catholic community in Wan Chai. In the vicinity of the church, there is a Catholic hospital and homes for abandoned babies and blind women. 7 With a growing number of parishioners, the Church had to be expanded. Thanks to a man of faith, Mr Wong, who donated a piece of land, a new Church named Holy Souls Church, together with a primary school, was developed through private donations and funding from the Diocese. The religious community had grown as a result of the post-war baby boom and urban growth. According to a senior church member, the church faced a number of problems in the 1980s. 8 First, the dilapidation of the building after decades of development required renovation work. Second, the neighbourhood was relatively poor due to an aging population. Third, the high maintenance cost of the church rendered its operation financially unviable. Fourth, there was a lack of funding for constructing new churches in the newly developed districts in the New Territories. Given these constraints, redeveloping the church in Wan Chai was considered to be the most realistic and practical option by the Catholic Diocese, which sold the land to Cheung Kong Holdings Ltd. (anonymous interviews). The developer was very interested in this piece of land because it is situated in a prime urban location with high development potential. Moreover, it is held under unrestricted lease. As such, the need of the Catholic Diocese to renovate the church was perfectly matched with the desire of the developer. The site was finally redeveloped into luxury housing with a new church inside the building, after many negotiations with the developer. In exchange, the Catholic Diocese got the proceeds for the development of other parishes. 9 This was a win-win situation for the Catholic Diocese and the developer.
Due to the lack of regular and stable subvention from the government, it is common that religious institutions have to explore alternative funding sources. This is further illustrated in the redevelopment proposal of Ebenezer School and Home for the Visually Impaired (ESHVI). ESHVI was established in Pok Fu Lam in 1913. After a long history of development, the site was no longer suitable for the continuous operation and expansion of the school and the home for the blind. Similar to other charitable organisations, they had to rely on private donations or other non-government resources for expansion and renovation. In view of the funding problem, ESHVI submitted a series of requests to the TPB 10 for rezoning the site from G/IC to R(C) (Residential (Group C)) so that the proceeds from the proposed residential development could be used to finance the relocation and construction costs. As repeatedly stated in the TPB meeting minutes, the Board of Directors of the ESHVI considered residential redevelopment as a means to realise their dream of a spacious and modernised purpose-built facility for the visually impaired: ‘Private donation was not a stable source of income. The proposed rezoning for residential development would provide sufficient funding for the relocation of the school and the provision of services for the blind community in Hong Kong’ (minutes of 371st meeting of the Metro Planning Committee, 18 April 2008: 14).
As no relocation site would be provided by the Government, the Ebenezer had to acquire private land at its own cost. However, property price had been increasing at a phenomenal rate and the relocation site should have an area of about 100,000 sq ft. (Minutes of 440th meeting of Metro Planning Committee, 15 April 2011: 13)
It is beyond doubt that the funding problem is a key motive for partnership with developers in redevelopment. As most of these charitable organisations owned properties or lands under unrestricted leases, it is natural that they will be identified by developers as partners. The contribution of charitable organisations to the society is well-known and many TPB members are ‘sympathetic with the applicant with respect to the provision of charity services under limited funding’ (minutes of 371st meeting of the Metro Planning Committee on 18 April 2008: 17). Through supplying developers with prime land with great development potential, charitable organisations have unconsciously fuelled the property market.
A pre-condition for the success of this kind of partnership is an active property market with lots of potential buyers. Developers will only be interested in partnership if they can make profit from a booming market. In Hong Kong, the ‘illusion that it was better to purchase property sooner rather than later’ has lured the general public to ‘participate in (and approve of) the property boom, benefiting from it one way or another’ (Tang, 2008: 353). Rather than using coercive measures, the government-business collusion has incubated the idea of a dream house as an indicator of successful life endeavour. Driven by the desire of home ownership and a stylish home, people work towards the goal of buying a house in the property market. The development of No. 1 Star Street clearly shows a strong demand by the general public for luxury flats. Since its occupation in 1996, 15% of the total units have recorded transactions of four times or above. Such a strong housing demand supports a long-term upward surge of land and property prices, as evident in the past 20 years. It also explains why the majority is silent about the redevelopment of G/IC, as they are fully engaged in their quest for a dream home. The general public tends towards ‘favouring a society organized around real estate development … [because it implies] society’s progress [which] deserves to be supported, at any cost’ (Tang, 2008: 359). By purchasing a flat, the general public has unconsciously participated in the grand project of the developers. As mentioned previously, there are some cases of public objections to G/IC redevelopment due to opposition to the Hong Kong government, which is a different issue. 11
Urban specialists: The key agents in perpetuating the land redevelopment regime
Given the myriad interests of different stakeholders, the redevelopment of G/IC sites is more than a technical process of land use changes. Since it involves the change from public to profit-making private use, as well as the redistribution of benefits from the general public to private developers, it has far-reaching impacts on the issue of justice in the allocation of scarce land resources. A cursory reading of the planning applications for redevelopment into non-G/IC uses informs us that there is a relatively high rate of success (74% in average), which implies the in-principle agreement of the government on this type of redevelopment. To be specific, the government supports the redirecting of land resources from the public to the private domain. This has the effect of adding fuel to the property sector as the majority of these redevelopments are for residential or commercial/residential uses. Property development at the expense of community land resources cannot be realised without the blessing of the government.
The planning application process which is established by the government and implemented by town planners is crucial for G/IC redevelopment. The planning application mechanism not only allows a certain degree of flexibility in granting permission for change of use, but also rationalises the change of use from public to private developments. After the proposed use (be it a residential or commercial development) has been established on the site, the government will initiate an amendment of the OZP to reflect the new/existing use. In this way, the re-directing of land resources for property development is rationalised. This is exactly the case with No. 1 Star Street where the government took the initiative to rezone the site from G/IC to residential zoning after the construction of the new residential property. Under the current Wan Chai Outline Zoning Plan No. S/H5/27, the existing zoning of the site is Residential (Group A) 4. It is argued that the town planners in control of the planning application mechanism served as facilitators in permitting the original G/IC site to be redeveloped into a private residential development (10,777 m2 GFA) while the church component was significantly reduced to 1403 m2. This is further evident in the introduction to the 1999 TPB guidelines for application of other uses within G/IC sites (TPB PG-NO. 16). Prior to the setting up of these guidelines, developers did not have adequate information about the key reasons for approval of G/IC redevelopment. By stipulating the main planning criteria for redevelopment of G/IC sites in the TPB guidelines, it greatly facilitates developers in providing justifications for their cases. Superficially, the TPB guidelines aim to control G/IC redevelopment by eliminating those applications which cannot fulfill the planning and technical requirements set out by town planners. In practice, the stipulation of these planning criteria (knowledge) in the form of guidelines has increased the rate of securing approvals as the assessment criteria is unveiled. Instead of controlling excessive redevelopments, these guidelines on the contrary facilitate redevelopment by providing a checklist of planning criteria. It is therefore not surprising to find that the approval rate increased from 67.5% pre-1999 to 89.2% post-1999 (Table 4). To a certain extent, the TPB guidelines increase the chance of success. 12 This case echoes with Flyvbjerg’s idea of rationality and power (Flyvbjerg, 1998, 2001). According to Flyvbjerg, planners are tempted to use power and rationalisation to pursue their hidden agenda or achieve their objectives. In a recent case of how the American Planning Association manages ‘uncomfortable knowledge’, it is found that the Association suppresses the publicity of knowledge about malpractice in planning so as to promote a positive image of planning (Flyvbjerg, 2013).
Approval rates for planning applications for whole-site redevelopment within G/IC sites.
Source: Compiled by the authors from TPB data.
Town planners, in Lefebvre’s terms, are ‘specialists of urbanisme’ who perform a strategic role in giving ‘meaning to the practical-material aspects of city-building with disciplinary, fragmented knowledge and through symbolic forms’ (Kipfer, 2008: 201). In the case of G/IC redevelopment, the fragmented knowledge in the form of TPB guidelines has steered developers in the right direction for securing approvals. Furthermore, the TPB guidelines state clearly that some G/IC sites may become ‘surplus, obsolete or under-utilised … [where] opportunities exist for some “G/IC” sites to be developed/redeveloped for non-GIC uses … to meet demand for better utilisation of the site potential’ (TPB, 1999: 1). This helps rationalise private developments within G/IC sites. In this way, the perpetuation of the land (re)development regime is made possible by ‘organic intellectuals’.
Conclusion
The everyday life, in Lefebvre’s term, is ‘the site of confrontation between the private and the public’ which is overwhelmed by ‘a series of intertwined conflicts and dialectical movements’ (Elden et al., 2003: 100). This article has attempted to offer an alternative explanation to the hegemony of the real estate industry through the investigation of G/IC redevelopment in Hong Kong. Instead of treating redevelopment as a technical process of land use change, this research re-interprets G/IC redevelopment from the perspective of the hegemony of the land (re)development regime. It is argued that the government, property developers, professionals, charitable organisations and the general public have altogether participated, in different ways and to different extents, in the capital accumulation projects of leading developer conglomerates and in the state administrative project. Through an empirical analysis of the planning applications for G/IC zones in the past 25 years, it is found that G/IC redevelopment is an integral part of property development in Hong Kong, which follows the boom and bust cycle of the property market. Charitable organisations, for example, due to the lack of regular and stable subvention from the government, commonly have to find alternative funding sources by supplying prime sites with great development potential to developers. The government-business collusion in Hong Kong has incubated the idea of a dream home which drives people to work towards the goal of home ownership. The town planning application system is itself a mechanism to rationalise private developments within G/IC sites. An in-principle agreement by the government in redirecting land resources from the public to private domain is evident in a relatively high approval rate of planning applications. The perpetuation of the land (re)development regime is thus made possible through the work of the state, powerful developer conglomerates, professionals and the general public.
Footnotes
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
Financial Support for this research has been provided by CUHK Research Committee Funding (Direct Grants) (Project Code: SS10847) and the Research Grant Council of Hong Kong (General Research Funding) (Project Code: HKBU250012).
