Hong Kong is challenged by an acute shortage of developable land and a tight housing supply. Homes are becoming very expensive and prices are beyond what most Hong Kong people, especially young people, can afford. In bid to generate innovative solutions to the serious land shortage problem, Doctoral Exchange has researched new ways to make the best use of Hong Kong’s seas. Specifically, we call for the creation of a Marine Enclave and a Floating Community. These two projects will see the reclamation of some islands from waters south of the Hong Kong Special Administrative Region’s (HKSAR) existing southern boundaries, as well as the building of floating platforms for repurposed cruise ships in the south-eastern corner within the HKSAR’s existing sea boundaries.
Hong Kong has a total of 2,755 square kilometres (sq km) of surface area, of which 40% is land. This in turn equals a surface area of 1,108 sq km, of which 40% is occupied by country parks and special areas. After deducting all environmentally and ecologically-sensitive zones, other statutory control areas and the hilly terrain, there is indeed very limited space for development left.
Since the founding of the former colony in 1841, Hong Kong has transformed from a small village into the world city that it is today. It is now a mature urban organism, and it has practically exhausted most of its conveniently available land resources for development. Production of developable land and housing has been very slow while homes are increasingly costly and unaffordable. Against this context, economic developments and the provision of new community facilities have suffered, affecting practically everyone living in Hong Kong. Undoubtedly, maintaining a timely and adequate delivery of developable land is key to resolving these bottlenecks. Various unconventional measures have been proposed over the past year to address the pressing land shortage situation. These include residential developments atop the Kwai Tsing container terminals, filling up Plover Cove Reservoir, and public participation in private developers’ agricultural land bank.
Notwithstanding the dire difficulties in producing developable land, we should be very objective and scientific in assessing the genuine land use demand.
Government’s planning research methodology is not in step with the times
The government’s “Hong Kong 2030+ : Towards a Planning Vision and Strategy Transcending 2030” (HK 2030+) study was released in October 2016. The study sets out the government’s blueprint for the SAR’s long-term land and infrastructure development beyond 2030.
However, the methodology adopted in the HK 2030+ study is not in step with the times.
The government’s planning team might have been over-cautious when developing the most appropriate planning research methodology in gauging the needs and aspirations of the Hong Kong people, as well as in assessing the demand and supply profiles of land and housing. The government adopted a forecasting methodology rather than a backcasting approach. They came up with straight solutions rather than planning scenarios; they did not offer options for public debate and choices. They went for a “supply-led” approach and adopted “demand-control” measures, instead of a “demand-led” approach and “supply-monitor” management measures. Civic engagement exercises have been grossly procedural and they have failed to tap the wisdom of civil society, thus failing to generate any broad consensus about Hong Kong’s long-term strategic planning.
There are three major methodological fallacies in the government’s study:
(1) BACKCASTING vs FORECASTING
Hong Kong is now experiencing a range of problems that comes with being a mature city: traffic jams, high housing prices, deteriorating living standards, a lack of new economic growth engines, etc. Constrained by limited spatial resources, many deep-rooted social tensions are also surfacing. Against this context, backcasting  should replace a forecasting methodology in development planning studies.
The focus of backcasting and forecasting methodologies are totally different. Backcasting is concerned with the aspirations of people instead of projecting what would happen in the future. A city should have clear strategic goals with targets for living standards and probably an optimal or even a maximum population size. With these in mind, we can then backtrack to the present situation and plan how to achieve those targets.
According to the desired objectives, we could then: (i) for alignment with the City’s “strategic intent” [1A], formulate matching industrial, population and land utilization policies; (ii) for the City’s desired livability standards, formulate a new set of standards in terms of livable space per capita, open space per capita, and minimum tolerable air quality standards; (iii) to facilitate regional integration, plan relevant cross-boundary transport support and commercial facilities, regional standardisation mechanisms, environmental protection coordination mechanisms, etc.
Judged by backcasting principles, the HK 2030+ study is sitting on unsound assumptions by literally taking population projection figures from the Census & Statistics Department (CSD) as the key planning parameters. The CSD projected that the Hong Kong population would reach a peak of 8.22 million by 2043, after which it would gradually drop to 7.72 million by 2066. However, this is a dangerous assumption as the figures do not take into consideration the import of talents and workers, such as medical doctors, nurses, construction workers, IT experts, as well as cultural and creative industries practitioners and artists, as may be required to propel new economic growth engines. Quality is built upon a sizeable critical mass. The right population size as a planning parameter should be 10 million . With this population target and strategic positioning of the City well defined, we could then realistically assess the demand and delivery schedule of developable lands.
(2) SCENARIO PLANNING vs STRAIGHT SOLUTION
The HK 2030+ study did not adopt a scenario planning  methodology and it has not presented a range of scenarios that reflects the strategic intent of the City or the people’s aspirations regarding their desired living standards. Scenario planning is a tool that allows systematic and continuous conceptualization, analysis, evaluation, and the balancing of different scenario permutations. With these conceptualized scenarios, it would then be easier to engage the various stakeholders and let them own and embrace the problem as well as the challenges it presents in the course of evaluating various options, hand-in-hand with the power-holders. Scenario planning is also inductive in seeking consensus and identifying the common denominators of various action plans.
We suggest that the government can construct a factor analysis matrix, with one horizontal axis showing the City’s strategic direction for the future. In so doing, it can, for instance, put forward three very different scenarios: (i) one that proactively reinvents Hong Kong by exploring a new direction of economic development, with a mindset of opening up the society to expatriates; (ii) a “closed-door” policy that keeps outsiders away as much as possible and maintains the status quo; (iii) the current way of working within the constraints of Hong Kong’s land supply and chaotic political landscape with a “do-the-best-we-can” attitude, while wrestling with various stakeholders.
(3) DEMAND-LED & SUPPLY MONITOR VS SUPPLY-LED & DEMAND CONTROL
We should not adopt the current “supply-led” approach and “demand control” measures. Rather, the government should adopt a “demand-led” approach and “supply monitor” measures. It is important that the government does not give up the need to scientifically identify genuine demand even though the difficulties in delivering developable land are indeed immense.
New land supply measures are time consuming, costly, and limited in scale
In general, we support the “multi-pronged” approach adopted by the government, given the existing constraints. However, most of the additional land supply measures proposed by government are time consuming and costly. And even if all these measures could be achieved within a reasonable period of time, the scale of the newly-formed developable land can hardly meet the actual level of demand.
On 29 August 2017, the government announced the formation of the Task Force on Land Supply. The Task Force had its first meeting on 6 September 2017. As per the information made available on the government website, there are 26 land supply measures proposed by the government and 12 measures that came from the public. Doctoral Exchange has broadly analysed these measures and our views are presented in Appendix 1 of this document.
In the “Optimising Land Resources for Better Housing Provisions” study published in December 2015, we pointed out that Hong Kong would be left with only 53 sq km of potential developable land (less than 5% of Hong Kong’s total land area), after deducting the City’s built-up areas, non-developable lands, and areas earmarked for the government’s planned New Development Areas. These areas are piecemeal and scattered over different parts of Hong Kong, and they are also without adequate infrastructure and utility provisions. As a matter of fact, Hong Kong lacks both developable land as well as consensus over measures to generate new land supply. Our 2015 report further reveals that Hong Kong’s housing shortage would further aggravate after 2025. It is projected that by 2050, there will be a shortfall of 700,000 residential units (400,000 public housing, 300,000 private housing) . By that point, there would also be a huge shortfall of developable land, especially if using the population figure of 10 million as the planning parameter. This shortfall would never be anywhere near the small figure of 12 sq km as the government claimed.
In their reports “Restart Large-Scale Reclamation for an Ideal Home” and “From Housing Market Outlook to Land Supply Strategy”, Our Hong Kong Foundation responded to the government’s HK 2030+ blueprint by pointing out that Hong Kong would need an extra 96 sq km of developable land to meet its development needs, and that reclamation outside Victoria Harbour is the most effective way in producing developable land. A professor further confirmed that we need more than 100 sq km of new land supply if we were to improve the living area per capita. He also emphasized that we should have more contingency capacity in the land reserve.
Doctoral Exchange believes that apart from meeting imminent needs, when working on the strategic planning of Hong Kong, we also need to consider the following:
*Improve livable and open spaces per capita;
*Provide decanting space for urban renewal projects and redevelopment of old public housing estates, and provide transitional accommodations for displaced owners and tenants;
*By way of a new form of “Property to Land Entitlement Exchange” mechanism as we suggest, dilapidated building blocks within the old urban areas could be torn down to make way for road widening and improvement of infrastructure and community amenities with a view to thin out the crowded urban core for which a more optimal use can be sought;
*Land reserve and policy support for new economic growth engines;
*Improve the livability of Hong Kong so as to attract and retain overseas talents needed for propelling new economic growth engines;
*Enable senior citizens to live within urban areas;
Provide space in new planned areas for NIMBY facilities such as incinerators, columbariums, funeral parlours, and waste treatment plants, etc.;
*Maintain an organic restructuring of land uses in the urban areas, suburbs, and the countryside, while achieving a balance that promotes social, economic and environmental well-being;
*Provide venues for international events such as the Olympic Games and international forums;
*Reserve space for “undetermined” use, while maintaining the planning flexibility; and
*Legacy for the next generation in the form of land reserve so that they can plan their own future.
With due consideration given to the list of 10 points above, Doctoral Exchange considers that an additional land supply of 120 sq km  should be a more appropriate aim. This will work with a more flexible planning framework and also accord with sustainable development principles.
THINK OUT OF THE BOX – RESOLVE THE LAND SHORTAGE PROBLEM ONCE AND FOR ALL
Hong Kong suffers from a dire dearth of developable land and housing stock. We are also fully aware that the supply of potential developable land is very slow and difficult. We therefore must go to the root of the problem. We must also think beyond 2047 and existing boundaries. Hong Kong is surrounded by the sea on three sides and bound by Shenzhen to the north. Both the eastern and western sides of Hong Kong are not suitable for reclamation due to ecological, scenic and functional reasons. The only possible way apparently is to go south. We must therefore make the best use of our marine wisdom to solve the land shortage issue.
Therefore, we propose two schemes which could resolve the land shortage problem once and for all in the short-to-medium, and medium-to-long term. These two schemes are the Marine Enclave, and the Floating Community.
Doctoral Exchange proposes an enclave development on land to be reclaimed from the waters and around existing islands some 35 to 75 kilometers to the south of the southern boundaries of the HKSAR. These islands, namely Ling Ding Island, Lema Islands, and Wanshan Archipelagos , belong to the Zhuhai Municipality.
This proposed 120-sq km development is almost half the size of Hong Kong’s total existing built-up areas. The Marine Enclave development consists of nine islands to be linked up by rail and roads which will meet the government’s proposed East Lantau Metropolis or Lamma Island and the rest of Hong Kong. The travel time from Central and Mongkok to the farthest station along the enclave development would be about 60 and 75 minutes respectively.
This enclave development idea is very much similar to the arrangement whereby 1 sq km of land within Zhuhai’s Hengqin District has been leased to the Macau Special Administrative Region government for a term expiring on 19 December 2049. This arrangement was the result of a decision made by the Standing Committee of the National People’s Congress (NPC-SC) on 27 June 2009. A second similar arrangement saw Shenzhen and Shanwei City make a cooperative arrangement to have 468 sq km of land within the Shanwei Administrative Region for the use of the Shenzhen government to build and operate an industrial district.
And for a broader perspective on the possibilities of reclamation, Tianjin has a 200-sq km reclamation project due for completion in 2018, while Singapore has reclaimed land amounting to 23% of its original land footprint. Macau now has a land area of 30.5 sq km of which 18.9 sq km land is formed by reclamation. If this project eventuates, the newly-reclaimed land is only 10.8% of its existing total land area of 1108 sq km. In relation, China has a good reputation for its ability to undertake speedy reclamation, noting that it took her only nine months to reclaim 2.8 sq km of land at the “Yongshu Reef” in the South China Sea.
The “Smart, Green, Blue and Resilient” planning and urban design concept will be applied on this “Hong Kong 2.0” enclave development. 80 sq km of the 120 sq km of land will be for residential/commercial use. Within this 80-sq km of land, 10% will be reserved for roads, 30% for green belts and parks, 30% for communal and commercial use, and the remaining 30% for residential use. The remaining 40 sq km of will be dedicated for other uses as detailed in Appendix 2. The 24 sq km of land earmarked for residential use with a plot ratio of 3.0 will generate some 72,000,000 sq m of residential usable floor area. The current usable floor area per capita in Hong Kong is 16.6 sq m (34% of that of Singapore’s) for private housing, while that for public housing is 13 sq m (51% of that of Singapore’s). If we adopt a standard of 36 sq m per capita (China’s standard is 36.6 sq m per capita ) across the board for both private and public housing, the 80-sq km residential/commercial zone within the 120-sq km Marine Enclave could accommodate 2.0 million people.
We suggest that this proposal be submitted by the HKSAR government for the scrutiny of the Central Government, followed by “project establishment” approval by the National Development and Reform Commission (NDRC). We also propose to have the reclamation and the related infrastructure constructed by a Chinese agent appointed by the Central Government. Upon completion, it would be handed over and leased to the HKSAR for a term of 70 years. The HKSAR could then develop this 120 sq km by phases to become a new extension of Hong Kong. Upon expiry of the 70-year term, the lease may be extended, subject to another decision by the NPC-SC.
In addition to the Marine Enclave, Doctoral Exchange is proposing, as a short term measure to provide temporary or transitional housing, a Floating Community notion in the south-eastern corner of the waters within the HKSAR’s existing sea boundaries.
The government will provide the platform and mooring facilities, while the private sector will provide the repurposed cruises for housing and employment.
Typically, an ocean liner like the OASIS OF THES SEAS, which has an interior floor space of some 170,000 sq m, and after deducting the common and service areas, would provide about 97,600 sq m of floor area for residential use.
There would be 4,000 units in each cruise which can accommodate some 5,500 persons. Assuming we would have 66 cruises incrementally built up around one platform cluster, theoretically, and with the 3 clusters in place as proposed, we could accommodate 198 cruises, occupying 30 sq km of waters.
The advantages of this proposed Floating Community include relatively short construction/conversion periods and long life spans of the cruises. Advanced technologies in shipbuilding and platform manufacturing can enable the use of the converted cruises for 70 to 100 years. These repurposed cruises are strong and therefore able to withstand even strong typhoons. They are also inexpensive. Assuming the net usable floor area per capita at 13.7 sq m, the total development cost per capita would be about HK$1.2 million at today’s prices.
Each cruise is self-contained and equipped to blend “Live, Work and Leisure” activities under one roof. The new form of lifestyle is particularly suitable for the cultural and creative industries. Nonetheless, cruise inhabitants are conveniently connected to the rest of the City by ferry services to and from Central, Kai Tak and Tuen Mun.
At the moment, there is no law limiting the length of stay on board a ship in Hong Kong of passengers who are Hong Kong citizens as long as the operation of the vessel complies with the requirements of the Marine Department, the Hong Kong Police Force and the Fire Services Department.
It appears that now is the golden opportunity to build new cruises for a housing purpose as the global shipbuilding industry is not in good shape, with an excess capacity of 60% recorded in 2016. Accordingly, the excess capacity in the order of 20 million CGT (compensated gross tonnage) is equivalent of 90 OASIS OF THE SEA liners. Based on shipbuilding manufacturing categorized by sector; again theoretically, 26 equivalent to OASIS OF THE SEAS liners could be delivered every year. Manufacturing time will be within three years from its order placing. There is no lack of examples whereby retired cruises have been converted for hotel or residential accommodation. For instance, we have RMS Queen Mary residing at the Long Beach of California, Yankee Ferry in New York, SS Rotterdam in the Netherlands, and the Ocean World in Shenzhen. The Seaventures Dive Resort in Malaysia, meanwhile, is actually a conversion from an old oil rig platform.
Timely delivery of developable land is the key to resolving the bottlenecking of economic and social developments. More importantly, it is key to improving the quality of living and the provision of decent affordable housing.
The concept of enclave developments is not new. The most well-known example is that Vatican, is actually within the city of Rome. Examples of enclave developments in China’s context include the Macau-Hengqin arrangement and the Shenzhen-Shanwei Cooperative Zone. These enclave arrangements are formed to better serve the people in terms of economic, social and cultural activities. The HKSAR is an inseparable part of the People’s Republic of China, and it has its mini-constitution, the Basic Law, to protect its rights and interests. Agreements have been reached between countries or cities on enclave arrangements regarding issues such as sovereignty rights, land administration, law enforcement, jurisdiction, tax, etc.
We propose that the HKSAR government could take up the enclave development proposal for discussion with the Central Government. If that is agreeable to the Central Government in principle, it may require the proposal to obtain a Project Establishment approval from the National Development and Reform Commission (NDRC), and a Chinese agent will be appointed to lead and implement this project. However, before any of this can happen, a decision must be sought from the NPC-SC, followed by the leasing of the 120 sq km of land upon its completion to the HKSAR for 70 years, and which is renewable for further terms subject to another approval from the NPC-SC.
In recent years, Hong Kong has been troubled by its inability to control construction costs and the construction periods of many infrastructure projects. This has probably been due to the shortage of engineers and construction workers, among other factors. The costs for construction projects in Hong Kong could be as high as five times those in mainland China.
With the benefit of “Chinese Technology, Chinese Speed, Chinese Costs”, and counting on the planned 480,000 subsidised residential units for the community, the anticipated cost savings in the order of HK$8 trillion from reclamation, infrastructure and housing construction in the enclave development would be distributed to some 1.2 million young people who should be less discontented after being able to own an affordable home in Hong Kong.
It is evident that the timely and adequate supply of developable land is the key to resolving the bottlenecking of economic and social developments and to unlock the latent potential of the Hong Kong community. The enclave development proposal presented in this submission may be the last chance to turn Hong Kong around from the current state of perplexity, stagnation and deadlock.
Admittedly, the enclave arrangement is complicated, and we need to explain patiently to the general public who will be further consulted at various stages of the planning and implementation process.
Doctoral Exchange believes that the two schemes of Marine Enclave and Floating Community can effectively and efficiently deliver the developable land and facilities necessary to alleviate the pressing need for housing provisions, as well as economic and social developments. With the additional land supply as proposed herein, the government and certain concerned parties could be disentangled from the endless fight on the various controversial land supply measures which have been mooted.
The government and the community would then have more time and more room to reach a consensus on the best way to deal with country parks, brownfield sites, urban regeneration, etc. It is hoped that by then, country parks could be preserved to the fullest extent, the density of old urban districts could be thinned out, redevelopments of old housing estates could be more efficacious with the availability of “decanting spaces”, and young people could enjoy decent and affordable housing, etc.
In recent months, there have been heated debates as well as collaborations among various parties in society to help solve the housing shortage problem. These groups include the Hong Kong Council of Social Service, the University of Hong Kong, Hong Kong Science and Technology Parks Corporation, developers, and some kind-hearted flat owners. While it is still too early to know the results of such trial schemes as container homes, shared housing, and government-initiated sub-divided flats, it seems that a perfect storm is brewing for some form of transformation and reform in Hong Kong.
President Xi Jinping, at a ceremony celebrating the 20th anniversary of the establishment of the HKSAR on 30 June this year, encouraged the Hong Kong people to “explore new directions in development, search for new economic growth engines, and identify new solution space”.
For the strategic long-term planning of Hong Kong, we need to have searching insights into the future, visionary and innovative strategic thinking, magnanimity of mind to embrace a wide spectrum of opinions, and perseverance to overcome hardship along the journey of project establishment and implementation.
We do hope that this “HONG KONG 2.0” proposal for a Marine Enclave and a Floating Community can become a “Plan B” option to be discussed among stakeholders in the community. We trust that, in the event that this proposal is favoured by the majority of the Hong Kong people, the HKSAR government surely has the confidence and ability to move ahead. By doing so, Hong Kong will have a bright future and will become an innovative, green, open, sharing, harmonious, and sustainable, world-class Wisdom Metropolis.
 Backcasting is a planning method that starts with defining a desirable future and then works backwards to identify policies and programs that will connect that specified future to the present. The fundamentals of the method were outlined by John B. Robinson from the University of Waterloo in 1990. The fundamental question of Backcasting asks: “if we want to attain a certain goal, what actions must be taken to get there?” Forecasting is the process of predicting the future based on current trend analysis. Backcasting approaches the challenge of discussing the future from the opposite direction. Backcasting is a method in which the future desired conditions are envisioned and steps are then defined to attain those conditions, rather than taking steps that are merely a continuation of present methods extrapolated into the future.
[1A] Coined by G. Hamel et al, 1989
 Hong Kong now has a population of about 7.39 million people. Assuming we shall be importing talents and labour, and with a projected annual growth rate of 0.7%, Hong Kong would have a population of 9.4 million by 2050. With a reserve capacity of, say, 600,000 people, Hong Kong should adopt the figure of a 10- million population as its key planning parameter. Most world cities have a population exceeding 10 million – New York 17.4 million, London 16.5 million, Tokyo 13.5 million, Shanghai 24.3 million.
 The concept of scenario planning emerged shortly after WWII. It was first used for military planning. The American Air Force figured out the possible measures likely to be adopted by its rivals and accordingly formulate reactive strategies.
 In a 2015 study, Doctoral Exchange pointed out that Hong Kong will have a substantial shortfall of housing stock by 2025, even assuming all short, medium and long-term measures by the government could be realized, and if no new supply of developable land would be in place. By 2050, there would be a shortfall of 700,000 residential units. Based on this figure, using the livable space per capita in the order of 36 sq m, the amount of developable land required would be given by (700,000 units x 2.5 person per unit x 36 sq m per person) ÷ 3.0 (plot ratio) ÷ 30% (percentage of residential land) = 70,000,000 sq m = 70 sq km. 80 sq km out of the 120 sq km land has been allocated for residential/commercial mix use thus giving 800,000 residential units. The land use budget of the remaining 40 sq km is detailed at Appendix 2.
 It is proposed that land is reclaimed from waters and around three islands, namely Ling Ding Island, Lema Islands, and Wanshan Archipelagos. The total reclaimed area of 120 sq km will comprise nine archipelagos of which six are man-made (respectively with areas totalling 6.34 sq km, 7.89 sq km, 8.04 sq km, 7.90 sq km, 10.88 sq km and, 7.43 sq km), and the remaining three archipelagos would be reclaimed partly from waters, and partly around existing islands, each with a current size of 13.7S sq km, 8.47 sq km, 4.45 sq km, to become two islands of 24.33 sq km and 30.51 sq km each. The remaining island of 15.46 sq km would be reclaimed around one existing 2.46 sq km island of the Wanshan Archipelagos.
 Wen Wei Pao News on 27 September 2017