RICS Supports Public Participatory Approach and Recommends Alternative Financing Model on Urban Renewal Strategy (URS)

HONG KONG, Dec. 13, 2010 /PRNewswire-Asia/ -- RICS had been proactively participated in discussion forums and meetings with Development Bureau, commenting on the role of Urban Renewal Authority (URA) and the way forward in URS in the past 2 years. In response to the strategy proposed in the finalized paper document, RICS is highly supportive on implementing public participation approach when carrying out urban renewal projects.

Mr K K Wong, Chairman of RICS Hong Kong said:

"We are very glad to see the Development Bureau adopted our recommendations, which we has submitted earlier on urban renewal strategy, including URA's role as Facilitator, public engagement in district-based urban regeneration planning, social impact assessment and flat-for-flat option. A span of two-year consultation period is fully utilized to collect views from different stakeholders, and thus able to formulate a long-term and comprehensive strategy. "

Public Engagement in "district-based" urban renewal planning

RICS thinks that public engagement through local focus groups is vital for all district-based urban regeneration projects. But most importantly, we need a balanced discussion and for resolving potential conflicts, invitation of professional bodies, members of local district boards and local residents to attend the focus group meetings is essential to ensure the representativeness of different voices.    

URA's role as Facilitator and Social Impact Assessment

RICS supports that URA should be acting as a Facilitator to provide consultation service to owners of owner-initiated redevelopment, but the requirement that 'a site shall first be identified by District Urban Renewal Forum (DURF) for redevelopment' should be lifted.

Besides early social impact assessments indicated in the Document, RICS thinks that short-term / interim social impact assessment that may occur during the redevelopment stage shall also be considered. Kwun Tong Town Centre Redevelopment Project K7 can be quoted as a good example. For such huge redevelopment project, interim impacts on transportation, market and other existing services shall be taken into account as a cessation of such facilities/ services would no doubt also affect the nearby districts or areas.

Mr David Tse, Chairman of URS Review Task Force, RICS Hong Kong commented:

"Suggesting URA to be a Facilitator or 'Middle Man' is in fact one of the key ideas that RICS proposed to Development Bureau earlier this year. This additional role not only able to minimize URA's investment cost for urban renewal projects, it also encourages or facilitates the participation of individual private owners in urban renewal projects. Ultimately, we are foreseeing a sustainable urban renewal strategy with more owner-initiated urban renewal projects."

Recommendation of Sustainable Financing Model: Tax Increment Financing

Urban regeneration should not only be sustainable in terms of social, environment, hygiene and preservation angles but must also be financially sustainable. RICS hopes that URA should exercise due care and diligence in pursuing urban renewal project such that the urban regeneration programme can be self-financing in the long-run.  RICS also encourages URA to explore other forms of financing models in addition to the existing public-private partnership programme.  The tax increment financing (TIF) may be an alternative model worth consideration whereby the URA is able to capture the tax increment, which is defined as the future increase in tax revenue to be generated, from the district to be redeveloped within a defined period of time, generally over a span of 15-20 years, via the securitization of the expected tax increment.  The government would retain long-term tax revenue upon the expiry of the TIF arrangement, which would enable a sustainable source of funds to be raised for future urban renewal investment.

About RICS & RICS Asia

RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues. RICS has 150,000 members globally and represents, regulates and promotes the work of property professionals throughout 146 countries.

The RICS Asia supports a network of over 11,000 individual professionals across the Asia Pacific region with an objective to help develop the property and construction markets in these countries, by introducing professional standards, best practice and international experience. It promotes RICS and its members as the natural advisors on all property matters. It also ensures that services and career development opportunities are provided to members. The RICS Asia region covers national associations and local groups locating in Brunei, Malaysia, Singapore, Thailand, The People's Republic of China and the SAR Hong Kong. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Japan, Kiribati, Laos PDR, Macao, Mongolia, Nepal, North Korea, South Korea, Taiwan, The Maldives, The Philippines, Timor East and Vietnam. For more information, please visit: www.ricsasia.org.