Hong Kong's integrated rail-property development model
The 2004 study "Study of the Integrated Rail-Property Development Model in Hong Kong" examines, from both theoretical and empirical perspectives, the impacts and benefits generated by this unique model. Researchers also examined whether the model can be successfully replicated elsewhere, especially in the Mainland China.
The model is not simply transit-oriented developments. As the authors point out, the property development projects above stations are only outcomes of the model. "Importantly, the model is not the same as the project; the model contains the policy, process, organization and finally the project," the study notes.
Key to the model is the exclusive property development rights granted to the railway corporation. As the study notes, "Real estate interests and transport objectives are not necessarily compatible. Separate considerations may lead to conflicts, diseconomies and inefficiency to both parties."
In comparing how this model might work in other cities, the researchers looked at Toronto, Washington, D.C., New York, London, Stockholm, Guangzhou, Shanghai, Beijing, Singapore and Tokyo.
Integration of railway and property development generates these key social and economic benefits:
- Construction of the urban railway is financed by the capture of the land value increases around stations through property development and other means.
- Ridership is increased as a result of the greater density in station area developments, thus improving railway operational viability.
- The government saves by not subsidizing the urban railway construction and the government gains from the increased "land premiums" from property development.
- Cities benefit from the creation of more sustainable urban spaces that offer more efficient use of scarce urban resources.
The study has been added to the Best Practices.