Speech by the Secretary for Housing, Planning and Lands, Mr Michael Suen, at the debate on Policy Address 2005 at the Legislative Council

Following is the speech by the Secretary for Housing, Planning and Lands, Mr Michael Suen, at the debate on Policy Address 2005 at the Legislative Council (LegCo) today (January 28).

Madam President,

The Policy Agenda 2005 just issued lists 3 new and 17 ongoing initiatives of the Housing, Planning and Lands Bureau (HPLB). I wish to highlight HPLB's major policy initiatives and objectives for the coming two and a half years.

New Initiatives

Housing Statistics and Land Policy

On new initiatives, in line with our market-oriented land and housing policies and to enhance the transparency of market information, we will release relevant statistics on private housing supply on a regular basis, so that the public can have a clear picture of flat supply based on actual data. With effect starting from 21 January 2005, we will release statistics on private housing supply in the primary market on a quarterly basis. I hope that the data can help the property sector grasp the latest market situation to enable them to decide on the quantum of private housing production having regard to market demand. The Government will ensure that there will be adequate land supply to meet the demand of different sectors in society. We are drawing up the Application List for the coming financial year and are examining ways to improve the existing Application List System.

Building Design

The second measure is to give impetus to building design. Proper regulation of buildings is vital in improving the living environment for the public. To be in line with international trends, the Buildings Department has commissioned a number of consultancy firms to examine the regulations under the Buildings Ordinance. The scope covers drainage system, lighting and ventilation as well as building construction. The purpose is to devise an efficiency-based regulatory system to promote modern and innovative building design. We are now consulting the industry. We expect to introduce into LegCo proposed amendments to the relevant regulations in stages from 2006 onwards.

Building Management and Maintenance

The third initiative is to make preparations to put in place a comprehensive strategy for implementing proper building management and maintenance. Last year, we conducted a public consultation with a view to obtaining a broad community consensus for mapping out practicable measures that are acceptable to the public to tackle the building neglect problem. The consultation report was released on January 21. It has also been submitted to the relevant LegCo Panel for perusal.

The consultation results indicate that the community generally agrees that -

(1) owners should bear the ultimate responsibility for proper building upkeep;

(2) mandatory building inspection should be introduced to ensure that owners will discharge their responsibility to properly manage and maintain their buildings; and

(3) assistance to owners who are in genuine need, e.g. elderly owners of old buildings, should be enhanced.

Policy direction and relevant measures

In the light of the outcome of the consultation, we have devised a comprehensive and systematic strategy to tackle the long-standing and complex building neglect problem through various short and medium-to-long term measures.

On short-term measures, we have, in the light of public views received, enhanced assistance to owners and owners' corporations in genuine need. We are glad to have solicited the support of the Hong Kong Housing Society (HKHS) to launch a $3 billion Building Management and Maintenance Scheme to provide "one-stop" technical support, incentives and interest-free loans to owners of old buildings to improve their overall living environment. Comprehensive financial and technical support is made available to owners in genuine need through various assistance and loans provided by the HKHS, the Urban Renewal Authority and the Buildings Department. We will review the results and consolidate the experience in this regard with a view to expanding and enhancing the assistance in a few years' time. The Buildings Department will step up efforts against unauthorized building works and ensure building safety. The Home Affairs Department will also continue its work at district level to assist owners in building management.

Apart from short-term measures to provide immediate support to owners, we will forge ahead with the following medium to long-term measures to attack the building neglect problem at root.

(1) Introduction of mandatory measures

As I said earlier, the public generally support the introduction of mandatory measures to ensure proper building upkeep by owners. Proposed mandatory measures include mandatory formation of owners' corporations, mandatory engagement of property management companies and mandatory building inspection. Of the various mandatory measures, mandatory building inspection is widely regarded as a more practicable and effective solution to the building neglect problem. Guided by the public preference on the way forward, we are working towards a second stage public consultation on the implementation details of mandatory building inspection and the support measures.

(2) Regulation of service providers

We have to consider regulation of service providers in tandem with the examination of the mandatory building inspection. We will carefully consider different regulatory proposals, implementation framework as well as resource implications. This issue will be explored in the second stage public consultation.

(3) Establishment of an independent arbitration and mediation mechanism to resolve disputes

Disputes over building management and maintenance issues often involve huge legal fees and are very time-consuming. This is frustrating to a lot of owners and owners' corporations. We are exploring with the Hong Kong Institute of Surveyors the feasibility of setting up a Building Affairs Tribunal to provide a simple and inexpensive mechanism to resolve these disputes. As this proposal involves complex policy and legal issues, we will further study them in detail with the Institute.

(4) Integration of building management and maintenance

We consider the integration of building maintenance and daily management a sustainable and long-term solution to ensure proper upkeep of buildings. However, in view of the long-standing building neglect problem and the weak building care culture, owners may not be ready for such integration. With one stop assistance provided to owners by the HKHS, it is believed that owners will gradually come around. The introduction of mandatory building inspection would further help owners understand the need for good building management, ultimately achieving the policy direction of integration of building management and maintenance.

The Government will also endeavour to improve the legal framework for more effective law enforcement and regulation. Passed by the LegCo in July 2004, the amendments to the Buildings Ordinance came into force at end-2004. We will further simplify the relevant regulatory framework over minor works. Such works include construction of interior staircase, canopies above windows and advertising signs. We plan to introduce the amendment bill into the LegCo in the 2005-06 legislative year.

Second Stage Consultation

Given the extensive and far-reaching implications of mandatory building inspection, we must further consult the public on the implementation details and the support measures in order to fully grasp the views of the public and the industry so that the legislative process will proceed smoothly. Implementation details include selection criteria for buildings to be inspected, the inspection cycle, items of inspection, and relevant penalties. Support measures would include the feasibility of setting up a Building Affairs Tribunal, further assistance to owners in need, regulation of service providers and the introduction of a voluntary building classification system.

We plan to launch the second stage public consultation in the third quarter of this year and complete the analysis of views received by the end of this year. Relevant LegCo Panel will be briefed on the findings early next year. If there is a general community consensus on major issues, we will submit the relevant legislative proposals to LegCo in 2006.

On-going Initiatives

Land Planning

Regarding our on-going initiatives, I would like to focus on three aspects, namely land planning, the enhancement of planning procedures and public participation, and public housing development. In the urban area, effective and sustained building management and maintenance will help to address the problem of ageing of buildings. In the New Territories, our first priority is to address the issue of small houses. We have set up a working group to study and review our policy on small houses. We will consult the Heung Yee Kuk first on this issue.

On the overall planning of Hong Kong, Planning Department is conducting a new round of strategic review, namely Stage 4 of the Hong Kong 2030 Study. The review includes a further assessment of the demand for land, consideration of the latest economic and development conditions as well as a study on different planning scenarios. It is expected that the public will be extensively consulted again in the second half of this year. We believe that the data and findings of the Study will help the community build up a consensus in the search of a balanced proposal for our future development and land planning.

Enhancing Planning Procedures and Public Participation

In formulating and enhancing our policies on planning and lands, the Government will adhere to the principle of free market and create a just, fair and open environment for competition and ensure a high degree of flexibility for our system of operation so that the industry can adapt better to new market trends and needs. On town planning procedures, the Government has long been promoting public participation. In July 2004, LegCo passed the Town Planning (Amendment) Ordinance so as to further enhance the transparency of the planning system, to simplify town planning procedures, and to provide more opportunities for the public to take part in the plan making process. We are examining the industry's views on the guidelines. It is expected that the legislation can be enacted in the first quarter of 2005. On the planning and formulation of harbour-front land uses, we have set up the Harbour-front Enhancement Committee (HEC) and we will seek advice from its members. We are working with the HEC to review the planning of Kai Tak and Wan Chai North through balanced and effective public participation. We have already commenced extensive public consultation on the planning of Kai Tak, whereas consultation on the planning of Wan Chai North has just commenced at the beginning of this week. The purpose of the consultation exercises is to engage the community in the envisioning stage of the planning process to solicit their "visions" on the types of harbour-front they aspire with a view to arriving at a consensus. This is a new attempt which we hope will facilitate future planning work.

Public Housing

Let me now turn to the subject of housing. Since announcement of the Government's repositioned housing policy in November 2002, the property market has picked up steadily, suggesting that the repositioned housing policy is taking effect. The Government will continue to maintain a fair and stable environment to facilitate the sustained and healthy development of the property market.

"Helping the poor and needy" is one of the major policy objectives enshrined in this year's Policy Address. The public housing programme provides affordable and adequate accommodation to about 630 000 low-income families, enabling them to thrive in a stable living environment. Hence, the public housing programme has played an important part in enhancing the quality of living and promoting social mobility. Despite the financial stringency faced by the Government and the Housing Authority in recent years, our commitment to the provision of public housing remains firm. We will endeavour to keep the average waiting time for public rental housing at around three years so as to bring expeditious improvements to the living environment of needy families.

At present, the Housing Authority has a stock of over 600 000 public rental flats. The expectations for better services are constantly increasing, entailing a large scale of management and input of substantial resources. In the light of financial constraints, the Housing Authority should focus its resources, manpower and experience on the planning, construction and management of public housing in order to maintain the provision of efficient and people-oriented services as well as to meet the development needs of the society.

The decision to divest the commercial properties in public housing estates through the listing of The Link Real Estate Investment Trust (REIT) is aimed to allowing the Housing Authority to focus on the provision of public rental housing. The divestment exercise was however challenged by a judicial review initiated by a public housing tenant just one day before closure of the public offering of The Link REIT. In the interest of prudence, the Housing Authority eventually decided not to proceed with the listing as scheduled. The Housing Authority is now actively preparing for the re-launch of the initial public offering and contingency plans will be mapped out to deal with different circumstances. The proceeds generated from the listing of The Link REIT will help to alleviate the Housing Authority's cashflow and will help to ensure smooth implementation of public housing construction programme.

On the other hand, the Housing Authority is facing a judicial review on its decision to defer the review of domestic rents of public rental housing. The final outcome of the judicial review will have far-reaching implications on the sustainability of the public housing programme. The judicial review underpins the importance of formulating a rational, clear and more flexible rent adjustment mechanism which reflects better tenants' affordability and allows both upward and downward rental adjustments. Subject to legal advice and progress of the judicial review, the Housing Authority will consult the public on the formulation of a new mechanism for setting and adjusting public housing rents.

It is in the long-term interest of the community to ensure that the public housing programme is sustainable. To achieve this, rational allocation of limited resources to address the needs of different sectors is of paramount importance. To meet the growing demand for public housing and to manage a large public housing stock, it may be opportune for us to consider, in light of changing circumstances, whether we should review the current allocation arrangements, and whether we should adopt more effective and focused measures to ensure the most effective use of resources in assisting families in genuine need. These are complex issues and will take time to resolve and drive towards a consensus. In the coming years, we will gauge the views of different sectors on these subjects with a view to strengthening our long-term housing strategy and maintaining the sustainability of the public housing programme.


In the past year, the Bureau has dealt with various controversial subjects. In the process, we have all along been adopting a positive attitude in putting emphasis on enhancing communication with Members and explaining to the public the Government's position and considerations. To conclude, the Bureau will have three key tasks in the coming two and a half years:

(1) to promote building maintenance works so as to rejuvenate old districts;

(2) for the overall planning of land use, we will strive to achieve a consensus on future land development from a macro perspective;

(3) to examine the development strategy of public housing, enhance the sustainability of public housing and ensure optimum utilization of resources.

I sincerely hope that with the support of LegCo Members, we can actively pursue the above in the coming 30 months and work hard together to build a better Hong Kong on the basis of mutual trust, cooperation and reliance. Thank you, Madam President.

Ends/Friday, January 28, 2005