Legislative Council Question 16 : "Government policy on green and innovative buildings" by the Hon Fernando Cheung and a written reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council
Following is a question by the Hon Fernando Cheung and a written reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council today (April 26):
It has been reported that the government policy to promote eco-buildings has enabled developers to add to their projects floor areas that are worth hundreds of millions of dollars, by paying land premiums which represent a tiny fraction of the value of the additional areas. In this connection, will the Government inform this Council:
(a) of the names of residential property projects that have been granted additional floor areas for green features since the introduction of the above policy, the amount of such floor areas, the premium paid for the green features and the current market value of these floor areas for each of these projects, as well as the total number of projects and amounts of floor areas and moneys involved; and
(b) whether it will review the above policy to address the above situation?
Joint Practice Note (JPN) Nos. 1 and 2 were issued in February 2001 and February 2002 respectively by the Buildings Department, the Lands Department and the Planning Department for the implementation of the policy to promote the construction of green and innovative buildings. Incentives are provided to encourage the incorporation of green features in building developments by exemption of the green features from the calculation of gross floor area (GFA). Subject to the relevant lease conditions, payment of premium may be required in respect of the exemption of GFA of the relevant type of green features. Prior to the implementation of the policy, various stakeholders, including professional institutes, the industry and the relevant Legislative Council Panel have been consulted. Any allegation that the government policy to promote eco-buildings has enabled developers to add to their projects floor areas that are worth hundreds of millions of dollars, by paying land premiums which represent a tiny fraction of the value of the additional areas is completely without foundations and may have arisen from a lack of understanding as to how the policy operates.
My reply to parts (a) and (b) of the question is as follows -
(a) Since the implementation of the policy, 117 residential projects with green features have been completed. Specific and accurate details in respect of the green features provided in each of the individual projects and the relevant GFA calculations are not readily available. Given the time constraint, it is not possible to compile such breakdowns. According to the Buildings Department's statistical database, the total GFA exemption for green features in these residential projects is around 188,600 square meters. The total GFA of the various types of green features involved is at the Appendix.
Not all green features attract premium. Green features which attract premium are essentially those that form part of the individual flats in the building and are for the exclusive possession and enjoyment of the owners and residents of these individual flats, i.e. including balconies, utility platforms and non-structural prefabricated external walls. Other green features are communal in nature and do not involve exclusive possession and enjoyment by owners of the individual flats, e.g. wider common corridors and lift lobbies, communal sky gardens and mail delivery room with mail boxes. They serve all owners and residents of the development and do not attract payment of premium.
For cases involving the payment of premium, the amount of premium payable is calculated in accordance with standard rates as promulgated in the relevant Practice Note of the Lands Department. These standard rates reflect the land value of the relevant green features and are subject to review annually. The assessment of premium is done at the time permission for GFA exemption is to be granted, which usually takes place when construction work of the project is about to commence. In this regard and according to Lands Department's record, a total premium of $443 Million has been paid for 58 out of the 117 residential projects.
Having regard to the above, it is entirely inappropriate to assess the current market values of the green features and associate with the amount of premium paid for the green features. Current market values are assessed based on the prices of completed units at current date. On the other hand, the premium paid in respect of GFA exemption of relevant green features was calculated based on the land value at the time when the exemption was granted. Besides, not all of the green features will form part of the flats for sale and attract the payment of separate premium. It would not be appropriate to compare the current market values and the premium paid in respect of green features.
(b) As the policy on green and innovative buildings through the granting of GFA exemptions has been implemented for some time, relevant departments are currently reviewing the effectiveness of the policy and examining if the objective of encouraging the design and construction of green buildings has been met. We would take into account the views of all stakeholders in conducting the review.
Ends/Wednesday, April 26, 2006
Issued at HKT 13:07