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Copy of Dissertation Defense

January 10th 2013

Yang Yu

on 8 January 2013

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Transcript of Copy of Dissertation Defense

Urban Regime Historical Review of Incentive Zoning First Generation Research Design Study Scope: POSPD in HK vs. POPS POSPD Development in Hong Kong Times Square Saga in 2008 In February 2008, a TV program named "On a Clear Day" on Commercial Radio Hong Kong reported that Times Square Piazza should be open to the public for free due to the Deed of Dedication. Initially, Times Square Estates Ltd. denied public query. On March 4, the then Director of the Buildings Department Cheung Hau-Wai was invited in "On a Clear Day" to affirm to the fact which aroused people's wide concern. On March 5, Sun Newspaper further and Ming Pao both reported that Times Square Piazza had been temporarily leased for commercial exhibitions for 14 years since 1994 and the daily rent ranged from HK$ 28,000 to HK$ 40,000 on weekdays and from HK$ 100,000 to HK$ 124,000 on weekends. On the same day, the then Secretary for Development Carrie Lam Cheng Yuet-Ngor was invited to the Legislative Council meeting for public inquiry. According to the meeting minutes, Carrie Lam said that "the development project of Times Square has fulfilled the requirements of the Deed". The news by media provoked the public and a series of grassroots movements of reclaiming public spaces followed up. On May 4 2008, Carrie Lam was present again at the meeting of the Legislative Council for public inquiry. She changed her previous point of view in the first public inquiry and said that "regarding the case in which the owner of Times Square is suspected of acting in breach of the Deed, the Government took civil action against the owner of Times Square in 2008. As the relevant legal proceedings are in progress, we are not in a position to reveal details" and "the management of POSPD is the responsibility of the relevant owners." On June 17 2008, the Secretary for Justice filed a writ in the High Court on behalf of the HKSAR Government against Times Square Ltd. and its parent company The Wharf (Holdings) Ltd., and sued them for violating the Deed of Dedication and required them to return all the illegal incomes as well as fines. Timeline On February 11 2011, Hong Kong Headline reported that the lawsuit of Secretary for Justice (on behalf of the Buildings Department) v. Times Square Ltd. has been pending for three years and probably for two more years in the future. In 2011, the Development Bureau promulgated a new guideline named "Public Open Space in Private Developments Design and Management Guidelines." Extra income from the dedication The Wharf (Holdings) Ltd. had earned at least HK$ 700,000,000 solely from the dedication and construction of Times Square Piazza. If 100% of the extra office spaces are leased out, the average annual extra rents between 1995 and 2010 could ideally be nearly HK$ 100,000,000 and the total extra rents in the two decades could be over HK$ 1,900,000,000,000. Average Annual Extra Rents are about HK$ 100,000,000. Occupy the Central in 2011 1916 New York Zoning Resolution 1924 The Standard State Zoning Enabling Act Law case of Equitable Building in 1915 Law case of Ambler Realty Co. v Euclid in 1926 Second Generation Seagram Building in 1958 1961 New York Zoning Resolution 1957 Chicago Zoning Resolution Privately Owned Public Space (POPS) New York's Experience Between 1961 and 1974, the bonus system was as-of-right, in which builders just needed to follow the guidelines prescribed in the code in order to get their plans approved and receive the bonus. On May 21 1975, the City enacted a zoning amendment which tightened up design standards and inaugurated a negotiation & special review process. In 2000, New York City evaluated its bonus system for better performance. Now, New York City's incentive zoning system has different types of POPS with different bonus policies and requirements Relevant Literature Review Urban Governance Space Production Public Space Privatization Urban growth machine Regime theory Land-based interests
“Exchange values” vs. “Use values”
“Pro-growth coalition” vs. “Anti-growth coalition” Concept of “regime”
Threshold tests
Types of regimes Space production in globalization Space People Different modes of production Different spaces 3) Representational spaces “Relations of assembly” 1) Spatial practices 2) Representations of space Contemporary urban public spaces economic relations Ideal Public Space Post-modernistic perspective of the function of public space 1) Political 2) Social 3) Environmental Characteristics of Ideal Public Space Public sphere Concept of public sphere Manipulation of public realm: the invasion of private interests Critique on free market economy and commercial society Dead public space Public space as the carrier of disordered and heterogeneous
The death of public space due to private control
Overemphasis on efficiency instead of equity Privatization Against personal freedom
“Militarization of urban space”
Commercialization Logic Model POSPD is "an open space in private development under private management where the general public are entitled to access, use and enjoy such POSPD. POSPD may be located on private land within a private development and/or on government land adjoining a private development." How Questions 1) how well is the trade-off between public and private in terms of equity
2) how well POSPD policy serves civic society Research Questions Why Questions Explain the How Questions from urban regime perspectives (politically and economically) Research Methods 1) Archival Research 2) Data Statistical Analysis 3) Interview Profile of Hong Kong Location History Hong Kong Island was ceded to the British Empire after 1st Opium War. 1841 1860 Kowloon Peninsula was ceded to the British Empire after 2nd Opium War. 1898 New Territories was leased to the British Empire on a 99-year lease. 1941 Hong Kong was occupied by Japanese Army in World War II. 1945 The British Government resumed the sovereign over Hong Kong. 1984 The Sino-British Joint Declaration was signed. 1946 The Young Plan of Political Reform, but failed. 1997 1989 Tiananmen Square Protests 1992 Patten's Political Reform HKSAR Government was established & Asian Financial Crisis 2003 The outbreak of SARS & July 1st Great Parade Urban Regime in Hong Kong Structure of Urban Regime Government Market Land Leasehold System Administrative Authorities 1) The Lands Department
2) The Buildings Department
3) The Planning Department Quasi-govt Org Three Types LDC & URA MTR Corp. Real Estate Giants 1) Li's Family
2) Kwok's Family
3) Lee's Family
4) Cheng's Family EstatReale Giants 1) HSBC
2) Bank of China
3) Standard Chartered New Class Knowledge Class Absence of democratic politics Functional Constituencies POSPD Development in Hong Kong History and Typology Incentive mechanism Production Mechanism Mandatory mechanism - The Lands Department
- Land Lease Conditions
- The POSPD List from the Lands Department - The Buildings Department & Planning Department
- Buildings Ordinance & Planning Permission
- The POSPD List from the Buildings Department Policy Dimension Section 22 of the B (P) Regulations 1) “Where, between ground level and a height of not less than 16 feet or, where the Building Authority is satisfied that there will be no obstruction to vehicular traffic using the street, 11 feet above ground level, a building on a class A, B or C site is set back from a boundary of the lot on which it is erected, being a boundary that abuts on a street, and, with the consent of the Government, the part of the lot that is thereby not built upon is dedicated to the public for the purposes of passage.”

2) "Where part of a lot, being a part that abuts on a street, is acquired by
the Government, either by agreement or by resumption under the Lands Resumption Ordinance ( Cap. 124), for the purpose of street widening." PNAP 233 "Where the dedicated area within a building serves both the public and the users of the building, the amount of exempted GFA and/or bonus GFA will be assessed by taking into account the proportion of traffic generated by the public and the users of the building."

"The maximum bonus plot ratio, in terms of additional GFA, generally will be at multiples of the dedicated area (five times for dedicated area at ground level and two times for areas at other floor levels) subject to the total bonus in return for the dedication not to exceed 20% of the permissible plot ratio with the dedicated area being exempted from accountable GFA." General Analysis of POSPD In general, there are 623 cases in the list from the Lands Department with the total area of 350,966 sq m and 331 cases in the list from the Buildings Department with the total area of 69,738 sq m. The total area of bonus floor area is equal to 13.6 HSBC Headquarter. The Number of POSPD in Each District Distribution of POSPD in Size Distribution of POSPD in Size Distribution of POSPD in Size across Districts Distribution of POSPD in Land Use Case Studies General Studies Timeline Since the outbreak of Occupy Wall Street in New York City on September 17 2011, the Occupy movement has rapidly become a global protest movement against economic and social inequality.

In Hong Kong, Occupy Central movement started on October 15 2011 to echo the global Occupy Movement.

When the protestors started camping on October 15 2011, the security guards in HSBC Concourse once tried to stop them, but they quitted rapidly due to a great disparity in strength.

In the following several weeks, HSBC did not take any action to drive them out because the anti-capitalist emotion in Hong Kong's society was ignited at that time. In this situation, the proposed 5th Halloween Charity Parade held by HSBC on October 29 2011 whose route would start from HSBC Concourse had been cancelled.

In June 2012, HSBC brought the case to the High Court.

On August 13 2012, the High Court granted an injunction that compelled the protestors to clear out HSBC Concourse within 14 days, by 9pm on August 27 2012.

On September 11 2012, 15 days after the deadline, court bailiffs started eviction the morning, which led to tough resistance from the campers.

On October 6 2012, The 10th Hong Kong Social Movement Film Festival (HKSMFF) was evicted forcefully from HSBC Headquarters. Extra income from the dedication HSBC had earned about HK$ 63,000,000 from the dedication and construction of HSBC Concourse. The average annual saving between 1991 and 2010 was nearly HK$ 100,000,000 and the total saving in the two decades was nearly HK$ 2,000,000,000,000. Grand Millennium Plaza in 2003 With the outbreak of SARS in 2003, the recession had bottomed out. In this situation, the HKSAR government carried out a series of schemes to "promote the local community economy" in the 2003 Policy Address. One of the schemes was to license outside seating accommodation (OSA) in POSPD.

In order to legitimize OSA policy, what the government did was to refer to Section 34I of the Building Management Ordinance (Cap. 344) stipulating "no person may convert any part of the common parts of a building to his own use unless such conversion is approved by a resolution of the owner' committee (if any)."

The Food and Environmental Hygiene Department (FEHD) issued "A Guide to Application for Outside Seating Accommodation" in 2003.

The OSA licensee in Grand Millennium Plaza was successful to receive a grant of approval from FEHD.

On July 17 2008, the Central and Western Council Committee held a meeting concerning the misuse of public open spaces in private properties. On January 15 2009, the council requested FEHD and the Lands Department to terminate the licenses and the waivers of OSA in six months in the meeting of Food, Environment, Hygiene and Works Committee.

The true cause was that the council members resented the fact that the rental fee of OSA was paid directly to the Lands Department without the council's initial knowledge and therefore the council felt a "loss of face" and used its position to settle scores.

Eventually, the Development Bureau and the Central and Western Council came to an agreement and the ban decision had been cancelled on May 25 2009. Timeline Extra income from the dedication The developer had earned about HK$ 209,000,000 from the dedication and construction of the POSPD. After the completion in November 1997, the extra profit from the bonus gross floor area was about HK$ 763,000,000. Compared with the total investment of HK$ 2,700,000,000, the extra profit alone accounted for about 28.3%. Grand Promenade Saga in 2005 Timeline According to the official report of the Audit Commission on October 22 2005, there were three main factors contributing to the great increase of the development density in the site: 1) reclassification of the site from Class B to Class C, 2) the exclusion of the PTT from the gross floor area calculation and 3) the granting of bonus areas. On November 17 2005, Ta Kung Pao, Ming Pao and Hong Kong Economic Times reported the Audit Commission's report in detail revealing the whole approval procedure of Grand Promenade and arising wide public concern on whether the then Director of the Buildings Department Leung Chin-Man had abused the discretionary power of exemption and granting bonus.

On November 24 2005, the Public Accounts Committee of the Legislative Council held a hearing upon the Grand Promenade saga and invited Michael Suen Ming-Yeung and Leung Chin-Man for inquiry.

On November 28 2005, about 100 professionals in the fields of architecture, surveying and planning wrote articles in the press to heap praise on Leung Chin-Man for his enterprising spirit.

By contrast, on May 9 2006, the government-appointed Independent Committee concluded that the decision of Leung Chin-Man had no negative effect on the land revenue of the government.

On August 2 2008, Apple Daily and Ming Pao reported that Leung Chin-Man was named Deputy Managing Director and Executive Director of New World China Land Ltd. Co. .

Under great pressure from the society, New World China Land Ltd. Co. announced that Leung had resigned from his post on August 16 2008. Extra income from the dedication The developer had earned at least HK$ 200,000,000 in the process of construction.

Since the completion in 2005, the developer received the total extra domestic gross floor area of 10,701 square meters from the dedication, whose total value of the extra domestic gross floor area was equal to about HK$ 1,260,000,000. Development Regime on Land Interest The Government & The Real Estate Giants Heavily rely on land revenue and relevant taxes.
High-land-price policy through intentionally controlling and adjusting the annual land sales.
The adoption of Land Sale List Program in 2004
The government & private developers in land leasehold system is analytical to the emperor and private tax collectors in the tax farming system. Why and how POSPD matters? POSPD policy is an effective way to take into account both public interest and land revenue.
POSPD is an effective tool of increasing development density and hence increasing land premiums. 1) upgrading the sites, 2) the granting of bonus areas CDA policy 1) The CDA applications with larger sites are easier to be approved.
2) Large developers enjoy more bonus gross floor area.
3) Quasi-governmental organizations are pro-large-developer. Urban Regime vs Anti-growth Coalition Urban Regime Anti-growth Coalition Banking Giants & Real Estate Giants How the Development Regime Runs? - mutual interests based on property development 1) Government; 2) Quasi-govt org; 3) Real Estate Giants;
4) Banking Giants; 5) New Class Political Spectrum in Hong Kong 1) Communist Party (HK); 2) Pro-establishment Camp;
3) Pan-democracy Camp; 4) New Social Movenment Camp Why did the New Social Movement Camp Emerged? 1) for a fairer society; 2) against pro-large-developer regime;
3) against laissez-faire captalism; 4) against property hegemony Why POSPD matters for the Anti-growth Coalition? 1) An important place of social interaction for the grassroots
2) An important medium of propaganda for the coalition Suggestions in Three Dimensions Political System Dimension Policy Dimension Management Dimension Progress toward democracy has to be made in steps and the government should be on the side of the public rather than of large private developers.

The department should be based on the public interest and the decision making process should stress openness and transparency, and trans-departmental collaboration within the government and public participation should be institutionalized.

The functional constituencies should be abolished and the seats from direct election should be increased, which will better reflect the voices from ordinary people. First is redefining spatial types of POSPD. A system of spatial types should be established to differentiate the qualities and different types of POSPD should be set up with specific requirements as well as plot ratio bonuses according to the usage and cost.

Second, the scales of CDA development as well as the resultant POSPD should be diversified. Considering the Hong Kong people's traditional custom of using street space for public life, small-scale POSPD with sufficient public amenities might be intentionally encouraged where appropriate and in accord with environment and hygienic standards. The public function like POSPD management should not be outsourced completely to private developers if possible. The Leisure and Cultural Services Department should extend its administrative authority to POSPD using the uniform administration rules to avoid the conflicts between private discretionary control over POSPD and the public users.

The government can levy administration fee upon the extra income from the bonus floor area which will be used to hire personnel to maintain the POSPD.
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