LegCo Paper No. CB(1) 185/96-97
(These minutes have been seen by the Administration)
Ref : CB1/PL/HG/1

LegCo Panel on Housing

Minutes of Meeting held on
Saturday, 5 October 1996 at 10:30 am
in the Chamber of the Legislative Council Building
Briefing by the Administration on the Governor’s Policy Address

Members present :

    Hon LEE Wing-tat (Chairman)
    Hon Ronald ARCULLI, OBE, JP
    Hon Albert CHAN Wai-yip
    Hon James TO Kun-sun
    Dr Hon YEUNG Sum
    Hon Zachary WONG Wai-yin
    Hon CHAN Kam-lam
    Hon CHAN Yuen-han
    Hon CHEUNG Hon-chung
    Hon CHOY Kan-pui, JP
    Hon LEUNG Yiu-chung
    Hon SIN Chung-kai

Members absent :

    Hon Frederick FUNG Kin-kee (Deputy Chairman)
    Hon Mrs Selina CHOW, OBE, JP
    Hon SZETO Wah
    Hon Edward S T HO, OBE, JP
    Hon CHEUNG Man-kwong
    Hon Fred LI Wah-ming
    Hon Andrew CHENG Kar-foo
    Hon Albert HO Chun-yan
    Hon Bruce LIU Sing-lee
    Hon LO Suk-ching

Members attending :

    Hon CHAN Wing-chan (Non-Panel Member)
    Hon IP Kwok-him (Non-Panel Member)

Public officers attending :

Mr Dominic S W WONG, OBE, JP
Secretary for Housing
Mr Andrew R Wells
Deputy Secretary for Housing
Mr Tony Miller, JP
Director of Housing

Clerk in attendance :

Mrs Vivian KAM
Chief Assistant Secretary (1)2

Staff in attendance :

Miss Pauline NG
Assistant Secretary General 1
Miss Becky YU
Senior Assistant Secretary (1)3

I. Briefing by the Administration on the Governor’s Policy Address

At the invitation of the Chairman, Mr Dominic S W WONG briefed members on the Government policy commitments in his programme area of housing by highlighting the main points in the information paper at the Appendix.

General Policy

2. The Chairman made reference to the sixth key element outlined in paragraph 86 of the report entitled "Hong Kong: Transition" presented at the Governor’s Policy Address, in particular the last sentence which stated that "Housing policies that were right for the sixties, seventies and eighties look less appropriate today", and sought clarification on the intention of the statement and if this represented a shift in emphasis of the existing housing policy from public rental housing (PRH) to home ownership. Mr WONG advised that the Administration remained committed to providing public housing at affordable rents to households in genuine need. The suitability of the prevailing housing policy, which had been applicable in the last three decades, would be examined in the context of the Long Term Housing Strategy (LTHS) Review so as to meet the long-term housing needs of the community. A public consultative document on the conclusions and recommendations arising from the Review would be released shortly. In reply to a related question, Mr WONG emphasized that tenants’ affordability would remain the prime consideration when determining the level of rent of PRH.

3. Members sought elaboration on the yardstick for "genuine need"; they were worried that the Administration would prescribe additional conditions to further restrict the eligibility for PRH thereby forcing applicants to buy their own homes. Mr WONG re-iterated the need for ensuring a proper allocation of PRH based on genuine need in view of the scarce land resources available for public housing. Better-off households would be encouraged to acquire their own homes through subsidized home ownership schemes or the private sector. He assured members that no persons in Hong Kong would be rendered homeless and that transit centres and temporary accommodation would be made available if needed. As over 40% of the population in Hong Kong were living in PRH flats, members urged the Administration not to reduce the production of PRH as this was vital in fostering a sense of belonging.

4. On a proposed tax exemption for first-time home purchasers, Mr WONG advised that he himself, the Financial Secretary and the Secretary for the Treasury had explained to the Legislative Council (LegCo) on previous occasions the technical difficulties involved. Nevertheless, the Housing Branch would continue to promote home ownership within its own jurisdiction.

Public Sector Housing

5. Members were not convinced that the Administration could meet the housing demand in Hong Kong since the supply of PRH flats had consistently fallen short of the target. By way of illustration, the number of flats produced in the years 1995-96 and 1996-97 were 14,500 and 18,000 respectively which was far below the annual target of 23,000 units over the planning period 1995-96 to 2000-01. The situation would be further aggravated as 22,000 units were scheduled for demolition in the year 1996-97. Members asked if the shortfall was due to constraints in land supply, and if so, the measures that should be in place to ensure an adequate supply of land to both the Housing Authority (HA) and the Hong Kong Housing Society (HKHS) to meet different housing aspirations of the community.

6. Mr WONG re-iterated that the Administration was committed to building an average of 23,500 PRH flats per year during the planning period up to 2001. The discrepancy between the estimated and actual supply of PRH flats over the past two years was attributable to the bunching effect during the later years. Although the rate of production might be relatively low in 1995-96, the rate was expected to pick up from 1998-99 onwards and the Administration was confident that the target of producing 141,000 PRH flats over the entire six-year planning period could be met. On the question of land supply, Mr WONG assured members that adequate land had been allocated or designated for both HA and HKHS to meet the production targets. These also included 151,000 flats under the Home Ownership Scheme (HOS), the Private Sector Participation Scheme (PSPS) and the Flats for Sale Scheme, as well as 20,000 units under the Sandwich Class Housing Scheme. The Administration would continue to identify land and make available funds to HKHS to facilitate the construction of another 10,000 flats for the Sandwich Class during the period before 2003. At members’ request, Mr WONG undertook to provide information on the number of new and refurbished flats produced and to be produced, as well as the number of flats demolished and to be demolished over the planning period.

7. A member noted that some 390,000 flats would be required over the next planning period from 2000-01 to 2005-06. He asked if this had been projected on the basis of such factors as population growth and family division as well as new immigrants, and sought clarification on the splitting ratio of public and private housing for such a projection. Mr WONG assured members that all factors which would affect housing needs and housing demand would be considered in the context of the LTHS Review. The housing need for the next planning period would be included in a separate report to be released alongside the consultative document on the LTHS Review. On a related concern over the impact of the Environmental Impact Assessment Bill and the Town Planning Bill on the timing and supply of land, Mr WONG said that he would convey member’s concern to the Secretary for Planning, Environment and Lands but believed that the production schedules for housing during the current planning period should not be affected.

8. Members were not optimistic that the average waiting time for PRH could be reduced from seven to under five years as pledged in view of the long waiting list (WL) and the large number of new applicants joining the queue. Mr WONG explained that while there were 150,000 applicants currently on WL, only 80,000 (54%) households would be eligible for the allocation of PRH flats according to past experience. The number of effective new household applications was estimated at 1,000 per month, or about 54,000 by the year 2001, making a WL total of 134,000. With the provision of 81,000 new and refurbished flats during the period, the effective WL in 2001 would be reduced to about 53,000, which would mean waiting time of just under five years for PRH, compared with present waiting time of 6-1/2 years. In reply to a related question, Mr WONG emphasized that the Government never gave a guarantee that WL applicants would always be allocated new flats. He assured members that vacant PRH flats would be renovated according to prevailing standard before re-allocation. On information regarding the distribution of new and refurbished flats in housing allocation including relief for overcrowded families over the past two years, Mr WONG took note of members’ request but advised that the Housing Department might not keep such data on the basis of whether the allocated flats were new or refurbished.

9. As to whether the decrease in the number of applications for HOS and PSPS flats reflected loss of confidence as a result of poor quality, Mr WONG explained that such factors as the location, price and design of flats would have direct impact on the sale of flats in individual projects. He did not agree that the number of applications had decreased lately as the number would fluctuate each time depending on the number of units available for sale. The average over-subscription rate of 13 times would serve as a useful indicator on the acceptability of these schemes. Mr Tony Miller supplemented that the Administration was committed to ensuring that all flats built under PSPS were of high quality by imposing higher standards on developers and monitoring their performance. He took note of a member’s concern about the quality of a HOS project in the Kwai Chung district and undertook to look into the case personally.

D of H

10. A member expressed reservations at the Administration’s ability to achieve its objectives in view of the many outstanding pledges made since the last policy address. These included for example the clearing of temporary housing areas (THAs) and the installation of security facilities in older rental housing estates by the year 1997. In reply, Mr WONG clarified that the Administration had not pledged to clear all THAs by 1997. The Administration’s pledge was to make at least one offer of re-housing by 1997 to all those who were living in THAs before December 1993; the Administration had overshot this target and over 85% of THA tenants had been re-housed so far. Mr WONG added that another opportunity of re-housing would be offered towards the end of 1997 to those who were living in THAs before September 1995. This was a new commitment. Action was in hand to deploy some older rental blocks in urban fringe areas to become temporary accommodation: one block was in place and another two would be ready in 1997. As regards the installation of security facilities, Mr WONG advised that progress had been on schedule and satisfactory and 35% of targeted housing blocks had so far been covered. At members’ request, Mr WONG undertook to provide a copy of the performance pledge concerned and a progress report on the installation programme.

HB

11. In referring to paragraph 29 of the Progress Report, a member sought clarification on measures for tackling the housing problem of the 27,000 elderly people. Mr WONG advised that a few priority housing schemes for the elderly were in place; these included priority in housing allocation and reduction of waiting time for households with elderly family members. The Administration recognized that the elderly might not be aware of these priority schemes and to this end had stepped up publicity. With the pledge also to build an additional 22,300 flats for the elderly on five urban sites and in a number of existing PRH estates, as well as the plan to build small flats for sale or lease under the new Elderly Citizens Housing Scheme (ECHS) operated jointly with HKHS, the Administration was confident that the housing problem of the elderly could be resolved over the next four years. In reply to a related question, Mr WONG advised that ECHS was conceived on the basis of a survey conducted by HKHS on the housing aspiration of the elderly. Flats produced under the Scheme would be sold or leased to eligible applicants according to their own choice.

12. As regards complaints arising from the income and assets assessment exercise, Mr WONG advised that all cases would be considered on individual merits in accordance with prevailing guidelines and procedures.

Private Sector Housing

13. Mr WONG said that the target was to provide 195,000 units in the current planning period through new land, redevelopment, and lease modifications or land exchanges. The Administration was optimistic that with the help of the Housing Project Action Team established to ensure that major proposals for new private housing projects would be processed efficiently and quickly, the production targets could be completed as scheduled.

14. On land supply for the private sector, Mr WONG advised that about 56% of new land required by private developers had already been provided. As regards the distribution of 47 hectares of land for private development during the year 1996-97, Mr WONG advised that about 44 hectares would be designated for private residential development and the remaining for other types such as small houses.

15. Members emphasized the need to expedite the formation of land to meet the housing demand in both the public and the private sectors and considered it useful for an information paper detailing the co-operation between the Housing Branch and the Planning, Environmental and Lands Branch in this respect. The Chairman advised that this would be the subject of a joint meeting in about November 1996 with the Planning, Lands and Works Panel.

HB

16. On the legislative time-frame for the bill governing the sale of flats, Mr WONG advised that the Administration had completed its study of the recommendations in the Law Reform Commission’s Report on Description of Flats on Sale. Drafting of the relevant legislation was underway and this would be introduced into LegCo in 1997. It was not possible to provide a definite legislative time-frame for amendments to the Landlord and Tenant (Consolidation) Ordinance in view of the work involved, although amendments would likely be introduced into LegCo in the latter half of 1997.

17. There being no other business, the meeting closed at 12:05 pm.

Legislative Council Secretariat
24 October 1996

Last Updated on 20 August 1998