LegCo Paper No. CB(1) 1883/95-96
(These minutes have been seen by the Administration)
Ref : CB1/PL/HG/1, CB1/PL/PLW/1

LegCo Panel on Housing
and LegCo Panel on Planning, Lands and Works

Minutes of the Joint Meeting
on Wednesday, 12 June 1996 at 2:30 p.m.
in the Chamber of the Legislative Council Building

Members Present :

LegCo Panel on Planning, Lands and Works
#Hon Edward HO Sing-tin, OBE, JP (Chairman)
#Hon Albert CHAN Wai-yip (Deputy Chairman)
#Hon James TO Kun-sun
Dr Hon Samuel WONG Ping-wai, MBE, FEng, JP
Hon NGAN Kam-chuen

LegCo Panel on Housing
Hon LEE Wing-tat (Chairman)
Mrs Selina CHOW LIANG Shuk-yee, OBE, JP
#Hon Edward HO Sing-tin, OBE, JP
#Hon Albert CHAN Wai-yip
Hon CHEUNG Man-kwong
#Hon James TO Kun-sun
Hon CHAN Kam-lam
Hon CHAN Yuen-han
Hon LEUNG Yiu-chung

Members Absent :

LegCo Panel on Planning, Lands and Works
Hon LAU Wong-fat, OBE, JP
#Hon Ronald ARCULLI, OBE, JP
Hon CHIM Pui-chung
Dr Hon Philip WONG Yu-hong
#Hon CHOY Kan-pui, JP
#Hon SIN Chung-kai
Hon TSANG Kin-shing

LegCo Panel on Housing
Hon Frederick FUNG Kin-kee (Deputy Chairman)
Hon SZETO Wah
#Hon Ronald ARCULLI, OBE, JP
Hon LI Wah-ming
Dr Hon YEUNG Sum
Hon Zachary WONG Wai-yin
Hon Andrew CHENG Kar-foo
Hon CHEUNG Hon-chung
#Hon CHOY Kan-pui, JP
Hon HO Chun-yan
Hon Bruce LIU Sing-lee
Hon LO Suk-ching
Hon MOK Ying-fan
#Hon SIN Chung-kai

(# members of both Panels)

Member Attending :

    Hon LEE Kai-ming

Public Officers Attending :

Mr Bowen LEUNG
Secretary for Planning, Environment and Lands
Mr Trevor Keen
Principal Assistant Secretary for
Planning, Environment and Lands
Mr Marco WU
Senior Assistant Director of Housing
Housing Department

Staff In Attendance :

Mrs Vivian KAM
Chief Assistant Secretary (1)2
Mr Billy TAM
Senior Assistant Secretary (1)4

I. Election of Chairman

Hon Edward HO was elected Chairman of the joint Panel meeting.

II. Urban Renewal in Hong Kong

Briefing by the Administration

2. At the invitation of the Chairman, Mr Bowen LEUNG briefed the meeting on the Administration’s policy on urban renewal by referring to the booklet entitled "Urban Renewal in Hong Kong" tabled at the meeting. He advised that the policy had been drawn up on the basis of proposals contained in the consultation document on urban renewal issued in July 1995 and which received public support, as well as new recommendations gauged in the consultation exercise including those of LegCo Members during a motion debate.

3. As part of the short term measures, the Land Development Corporation (LDC) would continue to make offers above existing market value in property acquisition and where practicable arrange for flat-for-flat exchanges and encourage owners’ participation in the redevelopment scheme, and invoke the Crown Lands Resumption Ordinance when justified. To address the concern on possible abuse by the LDC, the Administration had decided that the original proposal of asking the LDC to be the facilitator of good private schemes would not be pursued any further. To address the rehousing problem, co-operation between the LDC and the Hong Kong Housing Society (HKHS) would be enhanced. The HKHS would act as the rehousing agent for LDC’s schemes, while the LDC would concentrate on the planning, site assembly and implementation aspects of projects. Subject to the agreement of the Land Commission, the Government would grant three sites with a total area of two hectares to the HKHS at one-third of the market value for the construction of 2,000 units for rehousing tenants affected by currently planned LDC projects. In addition, the Government would grant land to the LDC to implement a linked site scheme where profits generated from developing Government land would be used to cross-subsidize financially non-viable projects to improve the living environment. A pilot scheme would first be tried out.

4. On the other hand, the Hong Kong Housing Authority (HKHA) would be requested to extend the priority in allocation of public housing for affected households from six to 12 months. The proposal of offering interest-free or low-interest loans to affected commercial operators to relocate their businesses had been rejected as the proposal could be expensive and administratively cumbersome.

5. As a long term goal, the LDC would be upgraded to a statutory Urban Renewal Authority (URA). New legislation would be considered to facilitate the resumption or sale of land for urban renewal purposes and to require owners to arrange for periodic inspection of their buildings and rectification of structural defects. Finally, an Urban Rehabilitation Fund would be created and administered by the URA to extend loans to owners for undertaking renovation works.

6. While acknowledging that no immediate panacea was available for tackling the problem of urban renewal, Mr LEUNG emphasized the Administration’s determination in enhancing support and utilizing all possible resources to tackle the problem and balance the interests of parties concerned. He highlighted the importance of the measures in coping with the growing urban decay problem caused by the ageing of private buildings and appealed to LegCo Members to support the policy.

7. Mr LEUNG confirmed that the policy statement had been endorsed by the Governor in Council and represented the Administration’s future direction, although the long-term strategies would need further study.

Discussion Session

8. Members agreed that urban renewal was a continuous task and generally welcomed the direction the Administration was taking. In particular, a member commended the tabulation of the action plan in the booklet. Most members however considered that the package would still not solve key issues such as resettling evicted tenants from private redevelopment projects and rehousing affected households in the same districts. The limited supply of HKHS units for rehousing purposes could only improve the present situation slightly. Members also questioned the effectiveness of the URA, and called for more participation by the HKHA to deal with the rehousing problem. They also held the view that the Administration should demonstrate more positively its commitment to urban renewal by granting more resources. A member informed the meeting of his intention to move a Member’s Bill to urge the Government to deal more effectively with the problem of rehousing.

Urban Renewal Authority (URA)

9. In response to members on the functions and powers of the URA, Mr LEUNG advised that the Administration had yet to discuss details relating to the establishment of the URA and it would take into account the views of LegCo Members. As regards improvements envisaged upon the setting up of the URA, Mr LEUNG said that as opposed to the present procedure for the LDC to put up proposals through the Planning, Environment and Lands (PEL) Branch, the URA could directly submit plans to the Town Planning Board. The process would therefore be expedited. In addition, there would be legislative provisions for the URA to expedite the resumption of land which currently was handled by the Lands Department. Overall, greater flexibility would be available for the URA to handle urban renewal projects.

Adm

10. A member was concerned about the power of the URA and urged the Administration to define clearly the powers of the new body to avoid abuse. Mr LEUNG advised that it was not possible to elaborate on the Authority’s role and responsibility prior to its formal formation but undertook to convey members’ views for consideration by the urban renewal team to be formed in the PEL Branch for strengthening co-ordination and monitoring implementation of the new urban renewal policy and projects. As regards resources for the proposed URA, Mr LEUNG pointed out that the LDC had sufficient financial resources and the Administration was positively considering granting more resources to assist URA to resolve rehousing problems and to develop infrastructural facilities in redeveloped area.

Adm

11. Addressing members’ worry that it might take up to two years for legal enactment, funding allocation and search for the chief executive before the URA became operational, Mr LEUNG explained that time was required for the planning and implementation of the long-term strategies. He assured members that the LDC would continue to operate and its existing programmes expedited pending formal establishment of the URA. Mr LEUNG reckoned that coupled with the implementation of the short term strategies, the pace of urban renewal should be speeded up immediately.

12. A member noted that the ratio of redevelopment projects by private developers might decrease if the URA was involved in more private sector redevelopments and expressed concern on the appropriateness of such an approach. Mr LEUNG considered that so long as a project was profitable, this should provide sufficient incentive for private developers to take up redevelopment projects.

Resettlement

13. A member who was a Board member of the LDC informed that from past statistics, the LDC only took up about 10% of the private developments with the rest being undertaken by private property developers. He was dissatisfied that the latest policy did not touch on the responsibility to rehouse affected tenants by private developers, and considered that the proposals were of no assistance to those who were now affected by renewal projects. Mr LEUNG said in response that with the new rate under the amended Landlord and Tenant (Consolidation) Ordinance which became effective on 28 March 1996, the tenants could afford to rent accommodation for a longer period. With the co-operation of the HKHA in advancing the allocation of public rental housing (PRH) units to those already on the Waiting List (WL), the rehousing problem could be alleviated. He acknowledged that it would not always be practicable to rehouse the affected tenants in the same districts. In response to the member on the construction cost of a PRH, Mr Marco WU advised that this was in the region of $300,000 to $400,000, exclusive of land cost.

14. A member considered the figures concerning waiting time for PRH quoted by the Administration too optimistic. As a member of the HKHA, he said that an applicant on the WL would have to wait for seven years on average for a PRH unit in a remote location. For units in urban areas, a waiting time of 12-15 years was not uncommon. Therefore, unless a tenant went through a series of demolitions, he would not benefit much from the proposed priority rehousing arrangement.

15. Members were concerned that the Administration might have wrongly assumed that most displaced tenants were already on the WL. They pointed out that some were new migrants while others might not meet the income criteria. Mr LEUNG clarified that the redevelopment projects did not preclude new migrants, and that their eligibility for rehousing would be assessed through normal procedures in due course.

16. In referring to the views of a deputation who met with Duty Roster Members on 11 June 1996, a member drew attention to the fact that the enhanced cash compensation would still be insufficient to cover the high rent they had to pay for alternative accommodation until they were finally offered PRH units. The deputation deemed it unfair that displaced tenants in private redevelopments did not receive the same treatment as those involved in redevelopment projects undertaken by the HKHS or the LDC. A member commented that such a discrepancy might create social disputes, and households might prefer projects undertaken by the LDC which provided cash compensation or rehousing arrangements and reject redevelopment proposals by private developers.

Co-operation with the Hong Kong Housing Authority (HKHA)

17. Members emphasized the need for increased co-operation between the Administration and the HKHA, which had the largest amount of housing resources, to deal with urban renewal. A member suggested that the latest rateable-value-linked compensation amounts could be paid to the HKHA for the re-settlement of evicted tenants and that the Government should grant more land to the HKHA for replenishing its housing supply. Mr WU said in response that resumption of land for LDC redevelopment was for public purpose which justified the rehousing of affected tenants into public housing. The situation would be different in case of redevelopment initiated by private developers. He was of the view that the amount of compensation and the grant of additional land were different issues which warranted separate consideration.

18. Noting that about 5,000 to 10,000 PRH units were vacant at any one time, a member suggested that these could be used to rehouse displaced tenants from urban renewal projects. The HKHA could in return request additional land to build the equivalent number of units which had been swapped for rehousing. In response, Mr WU advised that this would not be possible as such units were reserved for resettling displaced residents of the HKHA clearance and redevelopment programme.

Pilot Project on a Linked Site Approach

19. In reply to a member on the timetable and plans for implementing the pilot project on a linked site approach, Mr LEUNG advised that a number of issues would still need to be solved first, but there were blueprints within the Administration for undertaking pilot projects in a number of priority districts.

20. As regards the time for disclosing project details, Mr LEUNG explained that freezing surveys were vital in such redevelopment projects. Past experience showed that sudden increases in population in districts earmarked for redevelopment had resulted in serious delays in implementation of the projects. Pre-mature disclosure of information would therefore be undesirable. Although he had made use of the statutory power to instruct the LDC to conduct freezing surveys on a number of occasions, no similar authority was vested in him to request the HKHS to do the same. He added that in future, the HKHS would not be involved in redevelopment projects which involved acquisition of property ownership. Mr LEUNG emphasized that the project was a pilot one and reviews would need to be conducted in the light of experience gained. Members urged the Administration to develop land which did not require approval of the Land Commission to expedite implementation of the pilot projects.

Difficulties faced by the Land Development Corporation (LDC)

21. A member was of the view that the latest policy had not yet resolved the problems faced by the LDC listed in paragraph 41 of the booklet. Mr LEUNG acknowledged that land resumption was particularly difficult for the LDC as it had to acquire land through normal commercial arrangements. He hoped that the new measures would, with LegCo Members’ support, speed up the process of urban renewal. He advised that a proposal had recently been made to enable owners holding a clear majority of shares in a lot identified for priority redevelopment to sell the whole lot, notwithstanding objections by minority owners, and then distribute the proceeds among all owners. Such an open market transaction would ensure that the transaction price represented the prevailing market value of the property. For owners whose whereabouts were unknown, their shares of proceeds could be held on trust. The proposal was being considered within the Administration.

Urban Rehabilitation Fund (URF)

22. In referring to the URF, Mr LEUNG advised that this would be created to facilitate private land owners to redevelop their properties. In response to members, he quoted the example of the 30-year old Murray Building in Central where renovation programme would extend the usable life of the building by a further 25 years. He held the view that it was vital for owners to carry out regular maintenance of buildings.

Adm

23. A member asked whether the Administration had any data on the number of over-aged buildings or the number of old buildings which would have no redevelopment value, from which the amount of money required for the URF could be calculated. In reply, Mr LEUNG said that the Administration would work on an estimate in a matter of months.

Concluding Remarks

24. The Chairman thanked the representatives of the Administration for conducting the briefing session. He emphasized the need for the Administration to provide more land for the construction of housing units as this would be the ultimate solution to the problem of urban renewal.

25. There being no other business, the meeting ended at 4:00 p.m.

Council Business Division 1
LegCo Secretariat
22 July 1996

Last Updated on 20 Aug, 1998