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LCQ9: Demand-led Redevelopment Project Pilot Scheme

Following is a question by the Hon Tony Tse and a written reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (May 14):

Question:

Since the Urban Renewal Authority (URA) commenced implementation of the Demand-led Redevelopment Project (Pilot Scheme) (Demand-led Scheme) in July 2011, it has received a total of 110 applications in three rounds, but has so far accepted and commenced only eight projects.  In addition, the Chief Executive said in this year's Policy Address that "the applications [received by URA] are becoming larger [in scale], while the factors to be considered are also increasingly complex.  It is necessary for the URA to review the scheme comprehensively and to continue to operate it with due care under the principle of upholding a self-financing objective in the long run, so as to ensure its sustainability."  In this connection, will the Government inform this Council:

(1) whether it knows the respective numbers, with a breakdown by the District Council (DC) district in which the site concerned is located, of the Demand-led Scheme applications rejected by URA in respect of which:

(i) the sites concerned are smaller than 400 square metres;
(ii) the sites concerned are smaller than 300 square metres; and
(iii) the buildings concerned have been assessed as "not dilapidated, not varied or not poor" in the building condition surveys conducted by URA;

(2) whether it knows the justifications, apart from planning considerations, of URA for making "the site under application not being smaller than 400 square metres" a principle for consideration and an application requirement for the Demand-led Scheme;

(3) whether it has assessed the current number and distribution of the old buildings in Hong Kong that broadly meet the other application requirements for the Demand-led Scheme but the sites concerned are smaller than 400 square metres; if it has, of the findings, with a breakdown of the number by DC district and age of the buildings; if it has not, the reasons for that, and whether it will conduct such an assessment; regarding the buildings the sites of which are smaller than 400 square metres, of the other specific measures and arrangements to assist the relevant property owners in the redevelopment or maintenance of their buildings;

(4) whether it knows the mechanism of URA for conducting building condition surveys for the Demand-led Scheme applications; of the criteria and indicators adopted by URA for carrying out such surveys; of the specific and objective standards for grading the conditions of a building as (i) not dilapidated, (ii) varied, and (iii) poor; whether, prior to conducting assessments in each round of applications, URA adjusted the mechanism and criteria; if so, of the details; if not, the reasons for that;

(5) whether it knows if URA has assessed whether URA has adequate manpower and financial resources to handle Demand-led Scheme applications on an ongoing basis; if URA has, of the findings, and the corresponding measures and arrangements; if URA has not, the reasons for that, and whether URA will conduct such an assessment;

(6) whether it knows when a comprehensive review of the Demand-led Scheme will commence at the earliest, as well as the direction, scope, content and timeframe of the review; and

(7) whether it knows if URA will make appropriate adjustments to the basic framework for implementing the Demand-led Scheme; if URA will not, of the reasons for that, and how URA will address the rising aspirations among members of the public for redeveloping old buildings?

Reply:

President,

The Urban Renewal Strategy promulgated by the Government on February 24, 2011 (the 2011 URS) proposes that a "people first, district-based, public participatory" approach should be adopted in carrying out urban renewal.  Under the new strategy, the Urban Renewal Authority (URA) can forge ahead with urban renewal under diverse forms, including responding to a joint approach from building owners to initiate redevelopment of their lots, thus further expanding the role of URA in tackling the problem of urban decay in the old districts of Hong Kong.

In May 2011, the URA Board approved the implementation framework, principles of consideration and selection criteria of the Demand-led Redevelopment Project Pilot Scheme (Demand-led Scheme), which include the requirement that there have to be owners of not less than 67 per cent of the undivided shares of the respective lots of a site under application jointly submitting the application; the site under application should not be smaller than 400 square metres (sq m); the condition of the buildings covered by the site are identified as "varied" or "poor"; and there are available resources from URA to commence and implement the project within a reasonably short period of time.

Since the rollout of the Demand-led Scheme in July 2011, URA has launched three rounds of invitation for applications for the Scheme.  A total of 110 applications were received with nine projects commenced, including one which was terminated as it failed to meet the required conditions for continued implementation.

My reply to the seven-part question is as follows:

(1) The 110 applications received by URA in the past were mostly from Sham Shui Po, Yau Tsim Mong and Kowloon City districts.  Of these 110 applications, those rejected by URA with site areas smaller than 400 sq m or 300 sq m; or involving buildings not assessed as "varied" or "poor" under URA's building conditions survey, broken down by their respective District Council (DC) districts, are shown as Annex.
 
(2) Planning considerations and building design considerations are the two major reasons why URA has stipulated a minimum site size requirement of not smaller than 400 sq m for applications for the Demand-led Scheme.

On the planning front, if the site size is not smaller than 400 sq m, there will be less constraint when planning for infrastructural facilities (such as on-site loading/unloading area, etc.) at site.  Government, institution or community facilities and other measures with planning benefit to the community such as pavement widening, roadside greening enhancement and provision of public open space, etc. can also be suitably incorporated into the development.

On the design front, for sites not smaller than 400 sq m, more flexibility in the building design which will give rise to more positive effect on the enhancement of the living environment in the district can be achieved.

(3) As mentioned above, under the principles of consideration and  selection criteria of URA's Demand-led Scheme, apart from the requirement that owners of a specified percentage of the undivided shares of the respective lots of a site under application must agree to the application concerned, and that the site under application must be no less than 400 sq m in size, another major consideration is whether the condition of the buildings within the application site is assessed to be "varied" or "poor".

According to the principles of consideration of the Demand-led Scheme, there is only an application requirement that the aggregate site size must be no less than 400 sq m.  There is no requirement that each building covered by the application must have a site area of no less than 400 sq m itself.  As owners of individual buildings have different considerations in applying for the Demand-led Scheme, for example, while a building with a site area of 300 sq m does not meet the requirement for applying to the Demand-led Scheme, owners of that building may jointly submit an application with owners of the adjacent building which also has a site area of 300 sq m so as to meet the requirement of the Scheme.  Furthermore, there is no way for us to assess whether owners owning a specified percentage of the undivided shares of an individual building would be prepared to make an application.  For the reasons stated above, we are unable to assess the number of buildings that broadly meet the application criteria for the Demand-led Scheme.

For buildings not meeting URA's requirements for redevelopment, their owners may participate in URA's other assistance schemes for building rehabilitation and redevelopment.

On building rehabilitation, URA provides building maintenance support to the building owners, including financial assistance and technical support, through its participation in Operation Building Bright (Note: Operation Building Bright launched by the Government in 2009 has assisted owners of over 3 200 buildings which are 30 years old or above to carry out building rehabilitation.  URA is implementing the scheme in collaboration with the Hong Kong Housing Society and the Buildings Department and has made financial commitment to it.) launched by the Government in 2009 and jointly implementing the Integrated Building Maintenance Assistance Scheme with the Hong Kong Housing Society and the Buildings Department since April 1, 2011.

On the redevelopment front, URA has launched the Facilitating Services (Pilot Scheme) following the 2011 URS.  Under the Scheme, URA acts as "facilitator" to help owners assemble titles for joint sale.  The Facilitating Services (Pilot Scheme) has been open for application since July 2011.  The first successful joint sale by public auction of a project site under the Scheme was completed in November 2013.  URA is now actively facilitating two other applications under the Scheme.

(4) URA set up a survey methodology for conducting Building Conditions Survey (BCS) in 2009-11 and had engaged an independent engineering consultancy firm to conduct the survey.  Details of the methodology are as follows.

The BCS inspectors would inspect the common areas of the target buildings, including front elevation, side/rear elevation, rooftop, common staircase and common corridor/lobby.  The inspectors would grade the buildings according to the defects found in the common areas (such as common staircase), as well as the size of the defects at the inspected areas.  Such defects include spalling concrete, cracks, bulging/distorted concrete, water seepage/stains, unauthorised building works and signs of repair works in the past, etc.  The grading is based on the seriousness and the degree of damage that these defects have on the structural condition of the building.  The survey data will be analysed by a computer programme which will come up with a score for each building.  The higher is the score, the poorer is the assessed building condition.  A building will be identified as "varied" or "poor" when the score reaches a certain level.

The BCS methodology and grading system as mentioned above has been adopted by URA since the inception of BCS.  URA did not make any adjustment to the system before the applications of each round of the Demand-led Scheme are assessed for reasons of consistency and ease of comparison.

(5) In view of the fact that the financial commitment of the Demand-led Scheme and the sites covered by the applications are becoming larger and larger, and that the factors that need to be considered are getting increasingly complex, URA considers it necessary to conduct a comprehensive review of the Scheme.  In late April this year, URA has set up an ad hoc committee to oversee the review of the Demand-led Scheme, including an assessment of URA's manpower and financial resources.

(6) The ad hoc committee set up in April to oversee the review of the Demand-led Scheme will start work in May.  It will discuss the direction, scope, content (including the implementation framework of the Scheme) as well as the timetable of review.

URA plans to consult its seven District Advisory Committees (DACs) (the seven DACs are in the Central and Western, Wan Chai, Yau Tsim Mong, Sham Shui Po, Kowloon City, Kwun Tong and Tsuen Wan districts respectively), the membership of which comprises District Councillors, local dignitaries and professional experts.  URA also plans to meet the Panel on Development of the Legislative Council later this year to listen to members' views on the review.

(7) The ad hoc committee set up by URA will oversee the review of the Demand-led Scheme.  One of its major tasks is to review the implementation framework of the Scheme, including whether it is necessary, and if so, how, to refine it.

URA will continue to discharge its responsibility for urban renewal in Hong Kong in accordance with the 2011 URS.  Besides carrying on with its role as "implementer" in redevelopment projects, URA will also provide assistance to owners through facilitation service to help them assemble titles for joint sale.


Ends/Wednesday, May 14, 2014
Issued at HKT 16:21

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