ISE10/14-15

Overview of land supply

• In Hong Kong, land supply has been a subject of concern for many years. In order to accommodate the increasing population and household growth, the Chief Executive announced in the 2015 Policy Address the development of brownfield sites in Hung Shui Kiu, Yuen Long South and New Territories North as a long term measure to increase land supply.
• According to the Government, in order to provide 480 000 residential units in the coming 10 years, a multi-pronged strategy comprising short and long term measures has been adopted to increase land supply. Short term measures include increasing development intensity of developable land, rezoning, urban renewals and developing railway property. Long term measures include development projects at Kwu Tung North, Fanling North New Development Areas ("NDA"), Hung Shui Kiu NDA, rock carven and underground space development, and development of brownfield sites located in North District and Yuen Long South.
• This issue of Essentials explores the meaning, benefits and challenges of brownfield development with reference to the brownfield development in the United Kingdom ("UK") and the United States ("US").

Definition of brownfield

• At present, there is no standardized meaning of brownfield and its definition varies in different jurisdictions. In the UK, a brownfield site is generally referred to previously developed land with future potential for being redeveloped, whereas in the US, a brownfield site is generally referred to abandoned industrial land which has been contaminated and requires clean up before suitable for redevelopment.
• In Hong Kong, brownfield sites generally refer to the agricultural land in the rural New Territories, especially the relatively flat and more accessible areas. These sites have been occupied by various haphazard industrial operations such as open storage, port-backup facilities, industrial workshops, logistics operations, recycling yards, construction machinery and materials storage, which are often incompatible with the surroundings.
• Brownfield development is an urban planning process aimed at maximizing the utility of available land resources. According to the Government, the brownfield sites at Hung Shui Kiu and Yuen Long South are estimated to make about 629 hectares of developable land to provide 86 100 residential units, which is about 17.9% of the overall target supply of 480 000 units in the coming 10 years.

Brownfield development in other places

• Brownfields, usually former or existing industrial sites located near to the urban areas and underused, offer development potential in view of decreasing availability of developable land in the urban areas. While the scope and objectives of brownfield development may vary according to specific geographical, economic and environmental conditions of the site, brownfield development may generate some direct and indirect benefits, like removal of environmental contamination, maximizing the utility of existing land resources, providing an alternative to greenfield^{1Legend symbol denoting Greenfield refers to previously undeveloped land or so called virgin land.} development, urban regeneration, improvements of the economy of the site and its neighbouring communities as well as creating job opportunities. In fact, brownfield development not only brings environmental benefits, many other associated benefits may also be brought forward to the revitalized sites through the new economic and human activities.
• In the UK, in response to the increasing demand for residential and commercial properties and decreasing availability of greenfields, the UK government set a national target in 1998 that 60% of new developments should be built on brownfields. Since then, the local authorities have adjusted the land planning policies to prioritize brownfield development in their respective regions. The aims of brownfield development policy include: (a) achieving economic and social regeneration of the brownfield area; (b) improving the environment; and (c) reducing development pressure on greenfields. One of the largest brownfield development projects in the UK is the Thames Gateway project which commenced around 2005 and is still an ongoing urban regeneration scheme. This former site of docks captures 4 000 hectares of brownfields along the riverbank and mouth of the River Thames and is the site where the sporting complex Queen Elizabeth Olympic Park and financial centre Canary Wharf are located. The UK government is planning to build 160 000 new homes and create 180 000 news jobs in the area by 2016. Most of the funding of this project is provided by the private sector, while the UK government is responsible for spatial planning, development of a brownfield database^{2Legend symbol denoting In the UK, subsequent to the national direction of housing development on brownfield sites advocated in 1998, the UK government started to establish a national database on land use. The database is known as National Land Use Database containing data on vacant and derelict sites and other previously developed land which may be available for development. The data are collected from all local and regional authorities following a standard land use classification system to allow users to get access to the availability of different land types to facilitate brownfield development.}, land remediation and infrastructure development. From 2003 to 2008, the UK government spent £673 million (HK$7.8 billion) on the project.
• In the US, brownfield development is led by the federal organization Environmental Protection Agency with support from various states and local authorities. The Agency has initiated a Brownfields Program since 1995 to provide grant, guidance and tax incentives to support brownfield development. The objectives are to foster economic development, create businesses and job opportunities and improve tax revenue. A well-known brownfield development project is at Pittsburgh city in Pennsylvania. The project was led by the Urban Redevelopment Authority of Pittsburgh in 1995 and upon its completion in 2007, it turned 97 hectares of land from abandoned steel and iron factories into a mixed commercial and residential area. A total of 713 housing units, 100 000 sq ft commercial retail space and 32 hectares public park were provided in the area. The development plan was partly publicly funded (US$50 million or HK$388 million for infrastructure development) and partly privately funded (US$200 million or HK$1.5 billion of private development, and about another US$8 million or HK$62 million investment leveraged from private developers).

Challenges of brownfield development

• Although brownfield development has many advantages, it also faces many challenges and barriers. In the UK and US, various policy measures have been introduced by the governments in order to address the concerns of stakeholders and reduce the barriers to brownfield development.
• One of the major concerns with brownfield development is the cost of cleaning up the environment, which varies with the extent of contamination, the level of remediation cost and the risk of liabilities. Developers are particularly concerned about the potential environmental liability associated with pollution caused by the past activities on the brownfields. Hence, in the US, there are statutes^{3Legend symbol denoting The US enacted Comprehensive Environmental Response, Compensation and Liability Act in 1980. The Act empowers the federal organization Environmental Protection Agency to seek out those parties responsible for the contaminated sites and assure their cooperation in the remediation. If it is unable to identify the responsible parties, the Agency cleans up the contaminated sites and then recovers the cost from the subsequent parties who become financially viable through development.} to define the parties responsible for the remediation, and liability exemption applicable to purchasing parties provided that they comply with specific government regulations. In the UK, brownfields are regulated under general environmental protection and health and safety legislation. The Environment Agency, a public body in the UK, is responsible for providing advice on land contamination issues to enhance clarity and transparency on the standards required for compliance with the environmental legislation.
• Brownfield development may not be seen as an attractive option when comparing to greenfield development, as most brownfields are located on derelict or abandoned sites with various degrees of contamination. In order to promote brownfield development, the UK government has introduced a national policy to prioritize brownfield development and protect green belt when planning for new development. The UK government has also provided facilitating measures such as undertaking the advance work^{4Legend symbol denoting Examples of advance work include undertaking land remediation work, and providing the necessary infrastructure, transportation network and utilities systems.} for the sites to encourage brownfield development. In the US, the government has introduced tax credit as a development tool if the development scheme could help achieve government policies on housing and employment.
• Similar to other development projects, ownership issue is another challenge for brownfield development. In most cases, brownfields are owned by companies or multiple individuals, making sites assembly complicated and time consuming. In this connection, the UK government has introduced Local Development Orders granted by the local planning authorities to streamline and accelerate the planning approval process on brownfields.
• Public engagement is also a core strategy adopted by the UK and US governments to solicit public views at the local level. In the US, for those brownfield development projects applying for government grant, one of the assessment criteria is to evaluate to what extent the proposed development plans have addressed the community needs and public concerns. In the UK, there is a statutory requirement for the local planning authorities to conduct public consultation exercises before approving any brownfield development projects. The local planning authorities are required to publish the development plans of brownfield development projects for a prescribed period of time to invite members of the public to express their views and comments. They are also required to follow the development guidelines of the national planning policy to evaluate the opinions received and put in place an appeal system to handle any disputes.
• Brownfield development aims to make optimal use of existing land resources which have been previously neglected through remediation and regeneration. In view of limited developable land resources, brownfield development is regarded as a competitive alternative to greenfield development. Although it may encounter many barriers to development, overseas experience has shown that these barriers could be reduced by providing suitable policy measures.

Prepared by Angela CHOI
Research Office
Information Services Division
Legislative Council Secretariat
28 April 2015