Business Land Scarcity in Hong Kong Essay

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Scarce Land in Hong Kong



Land, capital, labour and entrepreneurship constitute the four factors of production. These are referred to as factors of production because people need them in their economic production ventures. Hong Kong, like many fast growing cities with vast population, is running short of land. In fact, it is already, a scarce resource. Problems such as insufficient housing are all due partly to the scarcity of land. Land is also required for public infrastructure and commercial structures. When land is scarce as it is in Hong Kong, it is the people who bear the brunt of high prices for housing. This is an indirect tax on land. Businesses face high costs of operation. It also becomes hard to put up critical infrastructure (So, 2014).



The land matter has been sensitive since the colonial days. Laurence Wong, the president and founder of Many Wells Property Agent Ltd. says as much. Wong is privileged to be an eye witness to the changes in land dynamics from the colonial time until when Hong Kong was handed over to the Chinese authorities. He observes that the land problem is here for a lot longer (Wong, 2014). The restrictions on supply of land courtesy of the topography and the regulations that govern it, Hong Kong now has the smallest ratio of land supply per capita among 10 comparable metropolises of Asia, America and Europe. Thus, the government has an urgent challenge on its hands to solve the land scarcity problem (Bertaud, 1997).



Causes of Land Scarcity



Land use restrictions and the topography including the steep hills, sea and island inlets are a stumbling block to resolving the problem. One may argue, though, that even though the latter aspects of land constraint are genuine, they also happen to be an attraction and make up a beautiful natural scene in Hong Kong. Regulation, were intended to ration land. This was justifiable given that Hong Kong was a city state in isolation with limited land without hinterland (Peng and Wheaton, 1994).

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Owing to the fact that the city state had to provide for its socio-cultural aspects of existence, vast pieces of land were reserved for recreational purposes, water catchment and agriculture in the city's boundaries. The reserves hampered development of the city within the radius space of the commuting distance of a metropolis. Apart from the topography constraints, the planners in Hong Kong have seriously rationed land supply within the city (Bertaud, 1997).



Effects of the Land Scarcity



The problem of land shortage has led to increased social issues that trigger political pressure. They prevent efforts to create a sustainable urban development and housing plan. Consequently, the prices of houses and the costs of urban development are soaring. For instance, Tai Koo Shing, a housing estate, has witnessed an increase in the process of large flats multiply 17 times over the past three decades. Similarly the prices in City One have risen fifteen-fold over the same period (Wong, 2014).



Hong Kong has used land reclamation for purposes of expansion. The authorities aimed at setting up 85,000 new flats every year when Tung Chee-hwa ruled. However, the administration failed to address the land shortage issue in a significant way - Pun Kwok Shing, He was a director of the planning department in the regime (Wong 2014). Leung Chun-ying, the chief executive, also failed to meet the 47,000 units target in 2014 (Hong Kong housing shortage: Leung Chun-ying plans to increase land supply, 2015).



Solution to the Land Scarcity Problem



There was a time when the society was not sensitive to environmental issues. Then, it was possible to reclaim….....

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References


Bertaud, A., 1997. Measuring Constraints on Land Supply: The Case of Hong Kong. World Bank, Processed.

Hong Kong housing shortage: Leung Chun-ying plans to increase land supply (2015) Available at: http://www.globalpropertyguide.com/news-Hong_Kong_housing_shortage_Leung_Chun_ying_plans_to_increase_land_supply-2175 (Accessed: 17 September 2016).

Peng, R. and Wheaton, W.C., 1994. Effects of restrictive land supply on housing in Hong Kong: an econometric analysis. Journal of housing research, 5(2), p.263.

So, R. (2014) Land and labor shortage causing major problems. Available at: http://www.chinadaily.com.cn/hkedition/2014-03/13/content_17343185.htm (Accessed: 17 September 2016).

Wong, V. (2014) Land shortage impeding HK development plan. Available at: http://www.ejinsight.com/20140916-land-shortage-impeding-hk-development-plan/ (Accessed: 17 September 2016).

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