Two exchange forums last week created new momentum for the development and planning of the Northern Metropolis, with active participation from government, industry, and political sectors. Whether at Wednesday’s Legislative Council lobby exchange or Friday’s Ta Kung Pao seminar on “Advancing the Northern Metropolis Development from a National Strategic Perspective,” the constructive suggestions aligned perfectly with SD Advocates’ policy recommendations from recent months.
Five key initiatives were proposed at these meetings to accelerate major development projects like the Northern Metropolis: innovative management structures, simplified approval processes, centralized procurement, pay-as-you-develop premium payments, and short-term tenancy reforms. Development Bureau Secretary Ms. Bernadette Linn emphasized that the government will transform from being a “regulator” to a “facilitator” in promoting development, removing barriers for Hong Kong’s land development.
Innovative Management Structure
The Northern Metropolis will include large-scale infrastructure, residential and commercial projects requiring coordination across multiple departments. Following the 2022 Policy Address announcement, authorities established the “Northern Metropolis Coordination Office” to coordinate development. However, according to Legislative Council member representing the New Territories North, Gary Zhang, and observations from SD Advocates, the office currently only performs coordination work without a unified decision-maker or sufficient professional team. Each procedure still requires navigating more than ten government departments, failing to effectively accelerate development or address various challenges. Therefore, Councilor Zhang suggested authorities should boldly reform the mechanism, such as having a Secretary-level official lead the office administratively rather than remotely directing from the “Northern Metropolis Steering Committee.” He also recommended granting the office approval authority for relevant development projects, saving government manpower while reducing the possibility of project delays.
Qianhai in Shenzhen, just across the river from the Northern Metropolis, is also a newly developed area with industry-led development. To accelerate regional development, the National Development and Reform Commission granted it vice-provincial administrative positioning and power, giving it great autonomy in planning and management. Land development decisions and approvals can be made directly by officials responsible for the district without going through layer-by-layer applications across departments, greatly enhancing administrative efficiency. This management reform is worth learning from for the Northern Metropolis.
Simplified Approval Process
In past infrastructure projects, the approval process has been the most complicated, taking up nearly 30% of project time and spanning years. This time-consuming, high-cost procedure may discourage interested enterprises from developing in Hong Kong. At the Legislative Council lobby exchange, the Development Bureau Secretary stated that authorities are researching and introducing multiple measures to streamline approval processes, hoping to encourage private market participation in land development and construction. The approach is to empower the industry with self-certification within this year, allowing “Authorized Persons” to directly approve relevant projects without going through step-by-step government department approval processes. Relevant departments can use spot checks as gatekeeping while fulfilling government oversight responsibilities. In fact, Hong Kong has already adopted self-certification practices in certain professional fields and industry associations, which benefits both efficiency improvement and market standardization.
Centralized Procurement
The Development Bureau Secretary indicated that during the Northern Metropolis construction phase, authorities will implement centralized procurement for certain construction elements, providing materials and equipment needed for multiple projects or departments, aiming to improve procurement efficiency and reduce infrastructure costs. However, authorities also need to further improve operational mechanism regulations to avoid hindering healthy market competition.
Pay-As-You-Develop Premium Payments
Addressing how to break down barriers in land administration procedures, Secretary Bernadette Linn stated that authorities will study the concept of “pay-as-you-develop premium payments,” meaning land premiums would be based on actual land values or land use values at different development stages, rather than following past practices of calculating premiums based on “highest development value” estimates before development begins. Legislative Council member Lau Kwok-fan, who also represents the New Territories North, believes this model offers more flexibility, allowing developers to invest and develop at different cycles without needing to invest large sums at once, reducing initial financial pressure, accelerating project initiation, and helping diversified industry development in the Northern Metropolis.
Short-Term Tenancy Reform
Additionally, Councilor Lau Kwok-fan suggested authorities could extend short-term tenancy periods. Current short-term tenancies last around 3-5 years, insufficient for developers to make long-term industry planning and development. Authorities could reference existing “Special Purpose Lease” formats to grant extra-long tenancies, such as 10-15 years, ensuring stability in development periods for industries to calculate investment and returns. Through the combination of “pay-as-you-develop premiums” and long-term tenancies, land grants would have the dual protection of flexibility and stability while lowering thresholds, likely attracting more small and medium-sized developers and enterprises to participate in Northern Metropolis construction, not just large property developers.
Relaxing Land Use Restrictions
The government has traditionally been very conservative in land policy and management, making the five proposals above quite remarkable initiatives. However, in terms of land use thinking, there is still a clear distinction and even mutual exclusion between “residential,” “industrial,” “commercial,” and “government, institution or community facilities” uses. In fact, with technological assistance, environmental conditions are no longer unchangeable, and land use can become more flexible. Therefore, authorities should use this opportunity for management innovation to introduce innovative planning concepts, making the Northern Metropolis a new demonstration area for diversified land use, maximizing land resources in each sub-district. As the Secretary mentioned, authorities are studying allowing village houses in development zones to conduct commercial activities or operate food and beverage businesses or homestays; other areas of the Northern Metropolis can also release development potential driven by technology. For example, using “aquaponics” green technology to develop urban leisure agriculture in industrial buildings; or planting “green walls” on building exteriors to balance development and environmental protection, replacing the traditional “land enclosure for conservation” model.
With authorities innovatively “breaking the deadlock” and industry actively offering suggestions and strategies, the Northern Metropolis will surely break down barriers, providing developers with a more flexible operating environment, attracting more investors and professionals to bring capital and technical support, seizing opportunities for rapid development.