Lawrence W.C. Lai

The formation of owners’ corporations in Hong Kong’s private housing estates: A probit evaluation of Mancur Olson’s group theory

This paper uses a probit model to analyse 100 observations in terms of three hypotheses about the formation of owners’ corporations in high‐density private housing estates in Hong Kong within the context of Mancur Olson’s group theory. The findings do not reject the theory, revealing that it is more likely for an older urban estate with fewer owners to form owners’ corporations. The discussion includes a brief introduction to Olson’s group theory and the development of the probit analysis. Some speculative thoughts about public participation in local level urban management and planning are offered in the conclusion.

Sick building syndrome and perceived indoor environmental quality: A survey of apartment buildings in Hong Kong

Abstract The outbreak of a highly communicable disease, SARS, in Asia in 2003 has revealed the health risk of living in a high-density environment. To show the important connection between human health and environmental quality, this study surveys the prevalence of sick building syndrome (SBS) among apartment residents and their evaluation of indoor environmental quality (IEQ). Based on a sample of 748 households living in Hong Kong, two interesting findings are revealed: (1) nasal discomfort was the commonest home-related SBS symptom despite the absence of any central ventilation system in apartment buildings; (2) noise, rather than ventilation, was the major IEQ problem perceived by residents. Our statistical analysis further showed that residents with SBS symptoms were less satisfied with their IEQ than those without. That is, despite a positive evaluation of specific IEQ criteria with respect to the building residents lived in, if they reported feeling SBS related symptoms, the overall IEQ evaluation of their building could still be negative. This perception bias gives rise to a sample selection problem in measuring perceived IEQ, which has implications on housing management practices and the formulation of a healthy housing policy.

The Inner Logic of the Coase Theorem and a Coasian Planning Research Agenda

This paper is an original attempt to explore the inner logic of and apply the Coase Theorem—specifically the corollary of the invariant version of the Coase Theorem (CIT) and the extension of the corollary of the optimality version of the Coase Theorem (COTE)—to empirical planning research. This attempt hinges critically upon seven theoretical propositions developed on the basis of seven law and policy relevant determining variables that are manifestations of ways of ‘assignment of rights and liabilities’ for the application of CIT (COTE). This is preceded by an examination of the meaning of seven allocative outcomes or determined variables pertaining to the theorem component ‘resource allocation would (under CIT not) be identical’. A 7 × 7 matrix (with forty-nine cells, each defining a specific research arena) is constructed, and relevant literature is surveyed to map the landscape of Coasian planning research as a step to building a transaction-cost-based research agenda. An example of empirically refutable planning hypotheses is given to demonstrate the usefulness of the propositions and to obtain a glimpse of the applicability of the agenda.

Measuring and Interpreting the Effects of a Public-Sector-Led Urban Renewal Project on Housing Prices—An Empirical Study of a Comprehensive Development Area Zone Developed upon ‘Taking’ in Hong Kong

Statutory zoning, as a regulatory tool, is generally considered as a means to introduce and maximize positive externalities and to preempt and internalize negative externalities; thence the land value of the regulated land and its immediate neighbourhood is enhanced. Yet, empirical evidence of the effects of zoning on land values has been conflicting. This paper empirically evaluates the panel data for a district in which two large-scale commercial properties have been developed in a comprehensive development area (CDA) statutorily rezoned from commercial/residential status on land taken by compulsory purchase by a public urban renewal agency in Hong Kong. A price gradient analysis is used to test the effects of such rezoning. The results show that the effect of the new CDA zoning on the prices of housing surrounding the CDA is uncertain. The Pigovian argument for the positive effect of zoning is therefore refuted as a justification for the zone under investigation, and the meaning of the finding for urban renewal planning is discussed. Some urban design factors that may have contributed to the failure of the projects are also discussed.

A Probit Analysis of Development Control: A Hong Kong Case Study of Residential Zones

This paper uses a probit model to evaluate a total of 1353 sets of cross-sectional development control (planning application) statistics not previously published for 3 classes of statutory residential zones in Hong Kong over a period of 24 years from 1975. As far as the selected zones are concerned, the findings refute the critical view that the Town Planning Board process in Hong Kong generates significant rent-seeking activities in favour of large developers. They also reject the official assertion that the decisions made by the Town Planning Board are independent of exogenous policy influence of government.

Zone Separation: A Probit Analysis of Hong Kong Planning Application Statistics

In this paper we demonstrate the use of a probit model to evaluate whether two classes of apparently similar/dissimilar zones with identical uses, that may be carried out with planning permissions, are in fact similar (and hence ‘inseparable’) or otherwise. Four empirical hypotheses about comprehensive development area, commercial/residential, and community-use zones in Hong Kong are tested by using nonaggregate planning application statistics of 793 observations. Acknowledgements. We wish to thank Professor Wing Suen of the School of Economics and Finance, The University of Hong Kong for his useful comments. We are also indebted to three anonymous referees who deserve our special thanks for their careful review and thoughtful suggestions. All faults are ours. This paper is partially sponsored by a CRCG grant (Number 10203311) of the University of Hong Kong.

Small is beautiful: a probit analysis of development control of small houses in Hong Kong

In this paper we apply the probit model, an econometric technique that has been used in urban economics to examine nonaggregate cross-sectional data, to investigate the development control (planning application) data regarding the so-called ‘small houses’ in Hong Kong with respect to two classes of statutory zones, namely the ‘green belt’ and ‘unspecified uses’ zones. Four refutable hypotheses relating to the scale of the development, exogenous policies, and internal planning guidelines confronting the planning permission mechanism are tested by using a probit model adapted for the purpose. The data set with 826 individual observations over a period of 24 years from 1975 is part of the first systematically collected and unpublished planning statistics data set for Hong Kong. Although the hypotheses are specific to Hong Kong, they can be easily adapted, where nonaggregate planning statistics are available, to evaluate three general issues: rent seeking, the dependence of planning decisions on announced policies, and the spatial variation in success rates of planning applications.

Land use rights reform in China: Some theoretical issues

Abstract The socialist regime in China abolished the long-established system of private property rights in land during the Great Leap Forward (1957–1962) and the Cultural Revolution (1966–1978) and replaced it with a bureaucratic and discretionary system based upon the Communist Party hierarchy. Recently, however, through the so-called ‘land use rights reform’ introduced as part of the economic liberalization programme of Deng Xiao Ping, the Chinese government has in effect revived private property rights in land in the form of leasehold interests allocated by auction, tender and private negotiation.

Planned conversion of rural land: a case study of planning applications for housing and open storage uses in agriculture zones

This paper uses 1372 sets of cross-sectional data to evaluate empirically the probit estimates for five hypotheses regarding planning applications for the conversion of leasehold land lying fallow or under active agriculture to nonagricultural uses in agriculture zones in Hong Kong. Though the agriculture zones occupy just 5.6% of all zoned land and the agricultural sector generates 0.1% of GDP and 0.9% of jobs, they attract a disproportionate 17.6% of planning applications. It is established that the Town Planning Board prefers to release development rights to indigenous villagers to construct ‘small houses’ than to container storage operators, though open storage of containers is a derived demand generated by an international container port. However, the fact that the Hong Kong government announced a major housing supply programme in July 1997 has not affected the pattern of decisions for agriculture zones. Indeed, for all nonagricultural use applications, the board has shown a dislike for large-scale development and been particularly more restrictive as regards applications arising in Sai Kung. This discussion is made with reference to the potential contribution of the modelling approach to planning research in general and the rural land-use policies and law of Hong Kong in particular.

Planning for Open Storage of Containers in a Major International Container Trade Centre: An Analysis of Hong Kong Development Control Statistics Using Probit Modelling

The authors describe the nature of the planning policies relating to the container industry of Hong Kong, a major international container trade centre, at territorial and district planning levels. Informed by the concepts of transaction costs, the authors attempt to ascertain whether the planning permission system in Hong Kong is promarket, antimarket, or market-neutral with respect to the container industry, and whether the stated statutory district planning policy of permitting and concentrating open storage in specifically designated Open Storage (OS) zones has been followed. A probit model is developed to evaluate 195 sets of nonaggregate and cross-sectional data regarding planning applications to the Town Planning Board for the years 1991 to 1998. The evaluation is conducted in terms of two refutable empirical hypotheses regarding the container industry. The findings suggest that the Hong Kong planning permission mechanism is market neutral towards the container industry and that the statutory district forward planning policy for that industry has not been followed in the development control process.