Special Report – Urban renewal, the challenges

The government has finally put a draft of the Urban Renewal Law before the Legislative Assembly, but final approval awaits the resolution of lawmakers’ ongoing discussions and lingering doubts

Macau Business | September 2022 | Special Report | Housing: A place to call home


Urban renewal in Macau a “hot potato” topic

It’s true the Legislative Assembly did approve a new law in broad terms last December, but ensuing months have confirmed the sensitivity of the matter, with a lack of consensus on the finer points preventing its final issuance in an official bulletin.

In other words, the old law of 2004 remains in force, one clearly out of step with the reality Macau is experiencing today.

The preamble of the new law is clear: “Since returning to the motherland, Macau has been experiencing rapid economic and social development. However, some old buildings already show signs of gradual aging, meaning the urban functions and the environment of the neighbourhoods in these areas are in need of revitalization and improvement in global terms. Thus, there is a high need for urban renewal in Macau.”

The same text outlines the difficulties faced: “Based on the social reality and objective conditions, due to the small amount of space in the city of Macau, its high population density and scarcity of land resources, among other factors, the developmental pace of Macau’s urban renewal has been very limited.”

A third and final idea found in the document currently being debated in the Legislative Assembly is one that also tells us a lot about the controversy plaguing the bill: “Considering that urban renewal is a more complex, more comprehensive social project, one that raises more concern on the part of citizens in the context of urban construction, it involves a complex relation of interests, a variety of interested parties and diverse requests from those various interests.”

“(…) it involves a complex relation of interests, a variety of interested parties and diverse requests from those various interests” – in other words, who pays for urban renewal?

The owners of the various properties, the reader will respond, since this is how it happens most everywhere.

However, in certain areas, especially on the Peninsula, the urban heritage is too degraded and rental income is low, meaning many owners will oppose renewal works, either because they don’t want to spend the money required or they simply don’t have it. For this reason, several lawmakers have been arguing the proposal should not only provide for the reconstruction of buildings but also the requalification of neighbourhoods.

This is the only explanation for lawmaker Chan Chak Mo – who chairs the Legislative Assembly’s 2nd Standing Committee in charge of debating this law – needing to warn it would be property owners and not the government carrying out the redevelopment of their old buildings.

When did Mr Chan make the statement? Two months after the outline of the Law had passed in December!

He also said in his statement that some of the Committee members had queried why the bill proposes the government would not take the lead in the redevelopment process of old buildings. He then quoted the response of officials, who explained that if the government led the redevelopment process it might not be carried out efficiently and smoothly, clarifying that the government’s leading the redevelopment process could make it “slower and more expensive”.

On another controversial issue also related to the responsibilities to be assumed by the various parties, some deputies asked the Government to explain why the law does not provide for payment of compensation to tenants that would be expelled from rented accommodation undergoing renewal works.

According to a reading by some lawmakers, while the bill stipulates that the landlord must respect legally established notice periods for “evicting” the tenants, it does not make reference to payment of compensation.

The Professor of Political Economy and Public Policy at the University of Macau’s Department of Government and Public Administration, Edmund Li Sheng, summarises the quandary for Macau Business: “The renewal of cities, as an inherently more complex activity than their initial construction, is no longer a simple government action but the result of the cooperation of the government, developers and people from all walks of life. A clear understanding of the proper roles and responsibilities of the public and private sectors is needed so that each can concentrate on what it can best contribute.” He concedes, though, “The government is still the leader.”

Deputy Pereira Coutinho, who voted against the outline of the bill last year, recently posed further questions to the Government, but the Executive responded with an assurance that it had heard from all sectors of society in the drafting of the bill on the legal regime for urban renewal.

“Considering that urban renewal is a more complex, more comprehensive social project, one that raises more concern on the part of citizens in the context of urban construction, it involves a complex relation of interests, a variety of interested parties and diverse requests from those various interests” – new bill


4 challenges

The Urban Renewal Law is designed to allow individual buildings in Macau to be either reconstructed or restored.

However, Professor Sheng explains, “the permissions to do so are not granted for multiple properties simultaneously, as the law allows only for the redevelopment of individual buildings. As a result, the Macau Urban Renewal Limited Company faces challenges when it comes to obtaining a consensus from residents on reconstruction or responding to owners’ concerns over the relocation of shops and resettlement of residents.”

Secondly, urban renewal projects pose a challenge to government finances, as well: “With the recurrence of the epidemic in recent years, Macau’s gaming industry has suffered a serious blow. Currently, Macau is facing an economic transformation and is experiencing a contractionary fiscal policy.”

Thirdly, “there is a need for better coordination and communication between government departments to avoid slowing down progress and to establish a constant communication mechanism to reduce the conflict of interest between departments.”

Concluding his recommendations in response to Macau Business, the professor believes “the government needs to coordinate with the residents over whether the redevelopment of old buildings will cause them inconvenience and dissatisfaction. The Macau government must ensure the transparency of urban renewal and the public’s right to information.”

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