Forced Sale is the Antithesis of Free Market

The idea of lowering the application threshold was first broached in 2006, with the proviso that buildings aged 40 years or older and/or those with missing or intestate owners would be affected by the proposal. This time, they have relaxed the age criterion to 50 years or older and cut out the missing or untraceable owners bit.

The Panel on Development, a Legislative Council sub-committee, has prepared a paper for discussion at the June 23rd meeting. As is hinted by the title of the paper, the objective of the proposal outlined is to ‘facilitate private sector redevelopment’. Hence, no matter how objective and balanced the paper may be presented, readers cannot help but sense that the chief aim of the administration is to lend a helping hand to the SAR’s needy and greedy developers.

Making that objective clear, the paper states:-

"In view of the difficulties in acquiring interests in properties due to problems such as defective titles, missing or intestacy of owners, and unreasonable high prices demanded by owners, some legislative provisions are justified."

Overcoming obstacles is part and parcel of any business enterprise. Why does the property development sector in particular merit government help, not to mention that most developers, especially the big boys, have more than ample resources to tackle any problems they may come upon in the process of amalgamating property interests in a targeted building? It is not unheard of that they usually ‘plant nails’ in the target (i.e. buy up certain number of units secretively) ahead of actually going into the process of negotiating with owners of the remaining units in order to gain an upper hand on price haggling.

Besides, what is at stake here is the sacrosanct right and freedom of private individuals where public authority is concerned. In allowing free market forces to play out, any interested developer is free to negotiate with owners of an old building to reach a deal and even use coercive but legal tactics in the process. Regardless of whether a deal can be reached, the free market rules are still intact. However, those rules would be breached if a government blatantly steps in and forces one-fifth (or even one-tenth for that matter) of the number of involved owners to sell out to the developer against their will.

John Stuart Mill said this in his famous Essay on Liberty:

"The only purpose for which power can be rightfully exercised over any member of a civilized community against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant. He cannot rightfully be compelled to do or forbear because it will be better for him to do so, because it will make him happier, because, in the opinions of others, to do so would be wise, or even right. These are good reasons for remonstrating with him, or reasoning with him, or persuading him, or entreating him, but not for compelling him, or visiting him with any evil, in case he do otherwise. To justify that, the conduct from which it is desired to deter him must be calculated to produce evil to someone else."

For a 50-unit building, 10 owners who may be unwilling to sell due to a variety of legitimate reasons, including reluctance to move from a familiar neighborhood and emotional attachment to the place they call home, would be compelled to part with their properties under the new proposal. Their refusal to sell is certainly not meant to and cannot possibly cause actual harm to the other owners. Wouldn’t such kind of compulsory sale amount to tyranny of the majority?

Moreover, a trend seems to be emerging where property owners of old buildings want to handle the redevelopment on their own terms rather than selling out their units to a developer, as they become more and more wary of developers’ rapaciousness. Thus, the SAR government really has little reason to continue pampering developers and risk being called interventionist and anti-free-market.

It is interesting to note that the Mongkok Sneakers Street Redevelopment Concern Group has made a submission to the Development Panel, but unfortunately the document was not made available on the LegCo website. The Sneakers Street redevelopment is one of the controversial Urban Renewal Authority (URA) projects in recent years where aggrieved property owners come to a head with the URA over redevelopment issues.

I am just curious as to how Hong Kong can still hold its head high when The Heritage Foundation or any other similar organization again crown her with the "world’s freest market" title next time, if it is bent on encroaching further on private citizens’ property right and by doing so, ditches the very essence of the free market doctrine.

Related reading:-

Unwilling Sellers