Champion estate: a case study of Laguna Verde(policy analysis on government's objective in encouraging owners'/occupiers' participation in private building management)

Abstract

This paper concerns with a study of policy of Hong Kong Government in effective building management. With the Government’s established policy in advocating building management, the Home Affairs Department (HAD) make use of competitions to induce property management companies (PMCs) and owners’ organizations to improve the management standard. After semi-structured interviews with organizer, judges and participants of competition, the Government’s policy is analyzed. Laguna Verde (LV) in Kowloon City District is taken as an example for illustration. It was found that they make use of techniques similar to business competitive strategies for preparing the competition. This may be the reason for their continued championship. It was concluded that the policy is well address to the objective of advocating quality building management and therefore effective. In addition, the policy has attributes of being an efficient policy, with equity and community acceptance. The institutional constraints are also less because the policy well aligns with other policies. In addition, the policy is flexible and different format can be adopted to address different policy and social needs.

Quality Building Management Competition (QBMC) is a territory-wide district-base programme organized by the HAD. LV has been successful in obtaining the championship in Kowloon City District QBMC for five consecutive terms, i.e., 2004-05, 2005-06, 2006-07, 2008-09 & 2009-10 (the term of 2007-08 was suspended). Using LV as an example, it is considered the factors for achieving quality management. The various strategies adopted by LV in obtaining the championship are studied. It is then utilized to illustrate the key elements of quality management through owners’ and occupiers’ participation. These include the set up of management committees / owners’ corporations (OCs), the representative groups, to manage common parts of buildings and the appointment of PMCs, the trade practitioners, to provide services including professional support and management of common areas. It is also illustrated in this paper that there are other dimensions of institutional arrangements, ranging from the establishment of legal framework, provision of professional and support service to OCs by the Government, to the statutory regulation on the property management industry, which contribute to effective building management and maintenance.

HAD, in response to government’s call on encouraging owners’ / occupiers participation in private building management, makes use of this competition to promote the good practice of building management. PMCs and OCs also make use of the competition in promoting their public image and enhancing the value of their properties. Therefore, a case study of how LV obtains the championship and an analysis in the implication of the competition in implementing the Government’s policy and serving the objective in private building management is valuable.

The literature review includes the conceptual framework of challenge in managing common property, i.e. the tragedy of the commons versus the tragedy of the anticommons: when multiple owners hold rights to exclude others from a scarce resource and no one exercises an effective privilege of use, the resource might be prone to overuse / underuse. In the context of building management, this refers to the attribute that common area of the buildings is of multiple ownerships. If the rights and obligations of such communal private property are not clearly defined, this will inevitably lead to lack of proper maintenance of the common parts and in turn the dilapidation of buildings and the diminishing value of properties. This problem known as the tragedy of the commons and the anitcommons gives rise to different institutional arrangements for property right governance or property management. It is further investigated into the choice among different institutional arrangements and the collective action of owners’ active participation in building management by referring to transaction costs analysis and Collective Interest Model.

Besides, the literature review gives background information of the competition, property management in general in Hong Kong, description of Kowloon City District QBMC and competitive strategies, in which both positioning and resources based approach will be applied. This is a descriptive research and qualitative method will be adopted. Semi-structured interviews will be conducted to the key staff participated in the competition. The organizer, that is, HAD and District Council (DC), as well as key members of the judging panel will also be interviewed.

From the analysis on various opinions from participating parties in the QBMC, it is concluded that QBMC, being a competition programme, together with a series of individual and continual publicity and educational programmes, performs the function of facilitating effective building management by OCs and service quality improvement committed by PMCs. It echoes to and is efficacious in achieving the Government’s policy in encouraging owners’ / occupiers participation in private building management. To a certain extent, the Government’s role in provision of well-established statutory framework and support services for OCs, as well as in implementation of regulatory framework for private property industry in Hong Kong contributes to effective building management.