The Ghost of CEs past


If you want an argument, do something which upsets students on a point of principle.

If you want a fight, do something which upsets workers on a livelihood issue.

And if you want a revolution, do something which upsets the value or security of middle class property.

I should apologize to readers for starting a column with this elementary philosophical treatise. But I am trying to get through to those who thought it would be a good idea to cut the compulsory purchase threshold from 90% to 80% just what a blunder it will turn out to be.

Already the first consequences have been documented. A developer who had been negotiating to acquire properties in Seymour Road in Mid-Levels at around $17,000 per square foot has taken all the offers off the table. He is expected to come back shortly with revised offers in the region of $12,000. There is a similar story from Kimberley Road in Tsim Sha Tsui.

And let us be clear: the buildings involved are not run down, shabbily maintained and in need of urgent urban renewal. At least one of them is very well maintained. But its owners suffer the misfortune of living in an older building on a site with considerable redevelopment potential.

In addition to the cases that have hit the headlines, there are doubtless many others at different stages of negotiation. But the tables are now firmly tilted in favour of the major developers to the disadvantage of the individual owner. Already the phrase "make sure you are not one of the last 20%" is beginning to come up in conversation over the lunch or dinner table. People realize - even if government ministers apparently do not - that once the big players have started on the acquisition trail, they only need to reach the 60 or 65 per cent level before they can start to squeeze the remaining owners. "We are talking to your co-owners and are close to a deal with them. YouÂ’d better take our offer now or you'll be one of the last few who get compulsorily bought out."

In the light of the fuss that was beginning to be created as the legislation went through, there was finally talk of mediation and, encouragingly, even murmurs of "flat for flat, shop for shop". But these should have been made the default options, not last minute verbal suggestions that will still, as things stand, be dependant on developers' goodwill.

It will not be part of the mediators remit to try to get a better deal for the owners being forcibly evicted. Rather their task will be to explain in layman's terms why the offer on the table is the best they're likely to get.

The great protest march of 1 July 2003 which brought some half a million people out onto the streets no doubt had many causes and these will be analyzed by academics for decades to come. But one of the underlying causes of the very large turnout was undoubtedly the feeling of many middle class home owners that the value of the biggest asset most of them had ever acquired had been substantially reduced because of misguided government policies. (Whether that sentiment was logical and the blame correctly ascribed are other, separate issues).

It was undoubtedly the scale of this march that led inexorably to the loss of credibility and the fall of the Tung administration, albeit under the guise of a visit from the "Zhongnanhai doctor" who found the then CE unfit to continue in office although the diagnosis was a political rather than a medical one.

Now we have another misguided policy. Perhaps its full impact will not become apparent by 1 July this year, but who could confidently say the same about 2011 or 2012? At some point there will be a substantial number of middle class people who have been winkled out of their homes on disadvantageous terms, or with a genuine fear they will be next. They will not forgive or forget and they too will march. And if that coincides with controversies in other areas - over minimum wage, say, or pace of political development - then the numbers will swell once again. And Upper Albert Road could be getting another visit from the doctor.


 
Mike Rowse
email: mike@rowse.com.hk