Translation of a speech by the Secretary for Housing, Planning and Lands, Mr Michael Suen, at the debate on Policy Address at the Legislative Council

    Following is the translation of a speech by the Secretary for Housing, Planning and Lands, Mr Michael Suen, at the debate on Policy Address at the Legislative Council today (October 28):

Madam President,

     The recently published Policy Agenda 2005/06 lists four new and 14 ongoing initiatives of the Housing, Planning and Lands Bureau. Today, I would like to brief Members on the latest progress of some of HPLB's policy initiatives and our views on them.

Private housing supply

     First, I will speak on the issue of housing and land supply. The quarterly statistics on private housing supply that we have released on a regular basis from November 2004 onwards has enhanced the transparency of market information, thus enabling the public to have a clear picture of the latest flat supply situation while helping the property sector grasp the market situation and determine the future supply of private housing.

     From the statistics on private housing supply released last week, we notice that the actual number of private residential units under construction from the beginning of 2005 up to the end of September is 11,700, lower than the 13,000 units over the same period last year. On the face of it, the figures seem to call for concern about a possible shortfall in the supply of flats in the market. However, the number of private residential flats being built does not reflect the full picture of the supply of new flats. In fact, the supply of private residential flats in the primary market in the next two to three years will exceed 70,000 units, including:

* first, the approximately 40,000 units currently under construction;
* second, the approximately 17,000 completed, but unsold, units;
* third, the approximately 6,000 units that can be built on sites sold by the Government, the construction of which will soon commence; and
* fourth, according to the timetable as agreed between the two railway companies and Government, it is expected that railway property development projects can provide about 9,000 flats over the same period.

     Moreover, the above figure does not include the approximately 6,000 units that can be built on residential sites for which premium has been paid or lease modifications have been completed. Judging from the above, the potential supply of residential flats in the next few years is more than sufficient to meet demand.

     As for private housing supply in the longer term, I firmly believe that developers will make appropriate decisions based on market demand. Since the private property market is market-driven, they have to plan their housing production based on the projected supply and demand in the market. Naturally private developers have different development strategies and market predictions, but the overriding objective must be to provide sufficient and suitable residential flats and to ensure that the market can continue to develop in a healthy and steady manner.

Ensuring an adequate supply of land

     In this respect, the Government's fundamental responsibility is to ensure an adequate supply of land to meet the needs of the market. After the land auction held at the end of last month, there are still 32 sites with a total area of 24 hectares on the Application List. These sites, distributed throughout the territory, are of various sizes and are suitable for various needs. Moreover, we will reserve in the next five years a total of about 254 hectares of land for private housing development. To further help private developers in devising their development plans according to their predictions of the property market demand, we welcome their suggestions on any sites in which they are interested but are not included in the list. We will soon be preparing the Application List for 2006-07. I hope that the new Application List will better meet the needs of the market.

Disposal of surplus home ownership scheme flats

     At present, the Housing Authority still has over 16,000 surplus Home Ownership Scheme (HOS) flats pending disposal. We have been actively working out the details of the sales arrangements, including the target and sequence of sales as well as the selling price. We plan to offer the surplus HOS flats for sale by batches and in an orderly manner starting from 2007. We expect to exchange views with members of the Housing Authority on the preliminary proposals around the end of this year and to announce the details of the sales arrangements as soon as possible in order to enhance the transparency of market information and to allow prospective home buyers ample time to get prepared.  

Building management and maintenance

     Last week we launched the second-stage public consultation exercise to gauge public views on the mandatory building and window inspection schemes.

     I am glad to see that the community generally supports the broad direction of the mandatory building inspection scheme and has actively expressed views on its implementation details. In fact, the community has discussed mandatory building inspection for quite some time. I am confident that the public and Legco will eventually accept the proposed scheme in view of the following reasons:

* first, the scheme now proposed is based on the community consensus obtained in the first-stage public consultation exercise;
* second, in working out the details of the scheme, we have thoroughly taken into account the community's main concerns, including the assistance required by owners with financial difficulty and elderly owners without any income; we have covered this aspect in our scheme;
* third, we will carry out measures to ensure the quality of service providers and the inspection fees, etc; and
* fourth, we have drawn on past experience in successfully implementing a series of short- and medium-term measures. The financial and technical assistance provided by the Hong Kong Housing Society and the Urban Renewal Authority has made significant headway in demonstrating the benefits of proper building care, including improving the living environment, raising property values and reducing building insurance premiums. We will enhance the assistance and introduce other support measures.

     To date, the discussion in the community on the solution to the building neglect problem has become rather mature and there is already a clear consensus. I hope that Legco, with regard to the overall interests of the community, will tender more views on the details of the mandatory building inspection scheme, and agree to lay an important legal foundation for resolving the building neglect problem. Subject to the community consensus over the proposals, we will press ahead with the requisite legislative work immediately. We plan to introduce the legislative proposals in 2007.

     Similarly, the maintenance of public rental housing is also our major concern. The Housing Authority has just endorsed the Total Maintenance Scheme, under which proactive in-flat inspections and maintenance works will be carried out for all the more than 600,000 public rental housing flats in the coming five years at the cost of $6.3 billion. In order to maintain public rental housing estates in good repair, apart from the efforts of the Housing Department, the full cooperation of the tenants is also required for the proper use of estate facilities, prompt repair of defective items and undertaking of appropriate maintenance responsibilities.  

Public rental housing development

     On public housing, I feel obliged to say something on its future development. The Public Rental Housing (PRH) Programme provides homes to some 640,000 low-income families. It is instrumental in raising tenants' quality of life and in promoting social mobility. Despite the tight finances faced by Government and the Housing Authority in recent years, we remain committed to the provision of public housing. Our policy is to continue to maintain the average waiting time for PRH at around three years so that those in need can be rehoused and have their living conditions improved as soon as possible.

     The construction and management of PRH estates involve a considerable amount of resources. To ensure the sustainability of the PRH Programme and to target our resources to those in genuine need, we have to review the current allocation policy, reduce the vacancy rate and combat abuses of public housing resources. With some 30% of our population living in PRH, we are wary of the need to forge a broad-based consensus in society when mapping out the relevant measures. I therefore call upon different quarters in the community to take an active part in the discussion on the way forward for PRH development.

     It is particularly worth noting that the judicial review concerning PRH rents was heard by the Court of Final Appeal last week. Irrespective of the outcome, we will abide by the judgement firmly and take the necessary follow-up action in accordance with the judgement.

     Most importantly, the judicial review has underlined the need for establishing as soon as possible an objective, clear and more flexible rent adjustment mechanism that reflects more closely tenants' ability to pay and allows both upward as well as downward adjustments. Following delivery of the Court of Final Appeal's judgement, the Housing Authority will consult different sectors of the community on the establishment of a new mechanism for fixing and adjusting rents with a view to reaching a broad consensus. The Government will also talk with Members in detail regarding the relevant legislative amendments so as to secure Legco's support for an early implementation of the mechanism.
West Kowloon Cultural District project

     As regards planning, one of HPLB's most important tasks in the coming months will be to assist in taking forward the West Kowloon Cultural District (WKCD) project. On October 7, 2005 the Administration briefed Legco on the results of the public consultation and the way forward. In response to public concerns, we intend to introduce new development parameters and conditions under the existing development framework. Taking into account the views of Legco, the Town Planning Board, the community and the screened-in proponents on these new development parameters and conditions, we hope to decide the way forward for the project early next year. Subject to responses from the screened-in proponents, we will formulate detailed requirements for them to revise the existing proposals under the framework of the Invitation for Proposals (IFP).  Sufficient flexibility has been built into the IFP for the Government to negotiate with the proponents with a view to selecting a proposal that best meets the aspirations and interests of the public.

Harbour planning

     Recently, there has been another round of discussion in the community on harbour planning. I wish to reiterate the Government's pledge: apart from the existing Central Reclamation Phase III (CRIII), Wan Chai Development Phase II and Southeast Kowloon Development, we will not consider any other reclamation proposals within the harbour. Our policy goals are the continued protection, preservation and enhancement of the harbour.

     The reclaimed land of CRIII, which is under way, totals some 18 hectares, which will provide for the construction of essential transport infrastructure, including the Central-Wan Chai Bypass and for reprovisioning the waterfront facilities. The bypass will be built in the form of a tunnel, with the land above available for use. As a result, over 60% or about 11 hectares of the reclaimed land will be used for the construction of a waterfront promenade, sitting-out areas and catering facilities for enjoyment by the public and tourists alike. Only a very small portion of the reclaimed land -- about 2.6 hectares -- will be zoned as a Comprehensive Development Area with a low-rise pedestrian landscaped deck on its east and a "groundscrapper" development on its west. I would also like to elaborate on the planning aspect, as several Members have mentioned the subject.

     We can all recall that this planning under went a statutory process. Planning for the current development of the Central waterfront, that is, planning for the piece of land reclaimed under CRIII, went through a due process of public consultation back in 1998 in accordance with the Town Planning Ordinance. It has been formally incorporated into the Central District (Extension) Outline Zoning Plan (OZP) after consideration by the Town Planning Board and approval in 2000 from the Chief Executive in Council. The OZP has been formulated through the relevant statutory procedures and sets out clearly the land uses and development restrictions within the zone, as well as the height restrictions for new or redeveloped buildings therein. Certainly OZPs are not unalterable; the Town Planning Ordinance provides for alterations. However, any proposed change of use or relaxation in building height restrictions in the OZPs must be submitted to the Town Planning Board for consideration in accordance with the relevant provisions of the Town Planning Ordinance. There will also be an open, fair and transparent process of public consultation for the community to air their views on the proposed changes and put forward their arguments for or against the proposals. Having taken all the data and justifications into account, the Town Planning Board will have to deliberate on the proposal and make a decision on whether to accept it or not. The proposal will still have to obtain the final approval of the Chief Executive in Council.


     Lastly, I would like to take this opportunity to express my profound gratitude to the honourable Members for their valuable opinions and support given to our various tasks in the past. Members' continued support will be of the utmost importance for the smooth implementation of our various policy initiatives and the associated legislative work in the coming 20 months.  These include the mandatory building inspection scheme, the regulatory mechanism for minor works and the review of the PRH rent policy. I look forward to working together with Members, on the basis of mutual trust and cooperation and in a pragmatic approach, to implement as soon as possible the above policy initiatives that are closely related to people's livelihoods.

     Thank you, Madam President.

Ends/Friday, October 28, 2005
Issued at HKT 17:07