LCQ21: Urban renewal

Following is a question by the Hon Wu Chi-wai and a written reply by the Secretary for Development, Mr Michael Wong, in the Legislative Council today (January 10):
Regarding urban renewal, will the Government inform this Council:

(1) of the respective numbers of buildings of three storeys or more which are now (i) 50 years old or above and (ii) between 40 and 49 years old, with a tabulated breakdown by District Council district; the relevant numbers in 10 years from now;
(2) given that the Hong Kong Housing Society (HS) and the Urban Renewal Authority (URA) signed a Memorandum of Understanding on Strategic Cooperation (MOU) in 2002, whether it knows the number of projects for rehabilitation, redevelopment and preservation of buildings undertaken by HS in accordance with MOU, and the titles, commencement dates and nature of the projects;
(3) as it has been reported that seven redevelopment projects undertaken by HS in accordance with MOU might bring about surpluses, whether it knows the costs of acquisition and development, the revenue from property sales and the surpluses in respect of each project;
(4) whether it knows if MOU is still in force; if MOU is, whether HS and URA will offer, in accordance with MOU, public rental housing, as well as different forms of subsidised housing like those offered under the Home Ownership Scheme, Sandwich Class Housing Scheme, and Starter Homes Pilot Scheme for Hong Kong Residents; if they will, of the activation mechanism and the relevant provisions, and whether the Government's prior approval is required; if MOU has lapsed, whether the Government has plans to steer HS to offer subsidised housing again through participating in urban redevelopment projects, and invite URA to take forward subsidised housing projects; if so, of the details; if not, whether it will consider doing so;
(5) given that URA is conducting a district planning study for Yau Ma Tei and Mong Kok, whether the Government will request URA to study the feasibility of redeveloping some of the private old buildings in these districts into subsidised housing;
(6) as some old buildings have fully utilised the maximum permitted plot ratios for the lots on which they are situated, and thus do not have any redevelopment potential, whether the Government has explored ways to take forward the redevelopment of such buildings;
(7) apart from leaving URA to conduct urban renewal studies, whether the relevant government departments have carried out studies on the policies and measures concerned; and
(8) whether it will study providing URA and HS greater policy and financial support in order to enhance their work of urban renewal?
In December 2002, the Urban Renewal Authority (URA) and the Hong Kong Housing Society (HS) signed a Memorandum of Understanding (MOU) in fostering a partnership in urban renewal. According to the MOU, the co-operation between the URA and the HS will focus on the developments proposed by the former Land Development Corporation (LDC). The HS is to act as an agent for the URA to assist the latter in implementing redevelopment projects, and its duties include undertaking the property acquisition necessary for such projects, rehousing affected tenants, building and disposing of the newly constructed properties, and meeting all the costs and financial results. The MOU also allows both parties to work together to carry out building rehabilitation and preservation projects.
Having consulted the Transport and Housing Bureau, the Buildings Department (BD), the HS and the URA, the consolidated reply to the eight-part question is as follows:
(1) According to the records of the BD, the respective numbers of private buildings in Hong Kong aged between 40 and 49, and 50 or above (excluding New Territories Exempted Houses) as at end 2016 are set out in Annex 1. As the situation of private buildings would continue to evolve (for example opting for redevelopment), the BD has not estimated the age distribution of private buildings in 10 years from now.
(2) and (3) In accordance with the framework set out in the MOU, the HS assisted the URA to implement seven urban renewal projects announced and proposed but not yet commenced by the former LDC, including five in Sham Shui Po, one in Sai Wan Ho and one in Shau Kei Wan. The HS has undertaken and completed six of these projects for commercial/residential use. Details of the six projects are set out in Annex 2. As for the remaining project in Sai Wan Ho, as more complicated acquisition issues were involved, the HS decided in 2012 to return the project to the URA for acquisition and redevelopment.
Apart from the above seven urban renewal projects developed under the framework of the MOU, the URA and HS announced in 2006 that they would jointly launch an urban revitalisation cum preservation project in an area near the Stone Nullah Lane in Wan Chai (i.e. the Blue House cluster), but the project was subsequently returned to the Government for revitalisation.
(4) and (5) As mentioned above, the MOU just provides a framework for co-operation and does not specify the validity period. As a matter of fact, when necessary, the URA and the HS may sign a new MOU or amend the existing MOU to take forward development projects or development schemes formulated under the Urban Renewal Authority Ordinance (Cap 563) in future. Due to resource allocation and priority consideration, the URA and the HS have no plan to co-operate on any redevelopment projects at this stage.
As a statutory body with the statutory function of promoting urban renewal, the URA has all along maintained an appropriate division of labour with the HS in terms of roles and ambits. The redevelopment projects undertaken by the URA since its establishment mainly focus on the redevelopment of private properties. To replenish the number of residential units in the private property market after redevelopment and to maintain the balance in the supply of public and private housing, the units to be provided by the URA after project completion are also private residential units. In addition, the modus operandi of the URA has all along been generating revenue through the sale of units constructed after redevelopment to achieve the long-term objective of a self-financing urban renewal programme.  The surplus accumulated by the URA over the years has been used to finance the acquisition, compensation and rehousing for redevelopment projects, and other works of the URA which would bring benefits to the public but would not generate any income, e.g. building rehabilitation, preservation and revitalisation. If private old buildings are put under the redevelopment projects of the URA and developed into public/subsidised housing, the Government and URA have to carefully consider the impact of this fundamental change on the supply of public and private housing and the self-financing mode of operation of the URA. On this premise, we will make reference to the outcome of the Yau Mong District Planning Study and explore with URA whether or not there is room to pursue different types of housing in suitable redevelopment projects in future.
(6) and (7) Many old districts in Hong Kong are showing signs of ageing. Having regard to the difficulty in increasing the development density or the lack of residual developable plot ratio in some districts, we need to explore more effective and efficient ways for urban renewal.  
In May 2017, the URA commenced the Yau Mong District Planning Study, which aims to explore ways of enhancing the efficiency of existing land use and modes in building rehabilitation in Yau Ma Tei and Mong Kok districts so as to meet the development needs of the community through better utilisation of land. The study will also look for more effective and efficient ways for implementing urban renewal and formulate feasible ideas and modus operandi for adoption in other districts. The findings of the study will provide a solid foundation for the Government in its consideration of further enhancement of urban renewal work in future.
(8) As mentioned above, the URA has all along maintained an appropriate division of labour with the HS in terms of roles and ambits. The URA is a statutory body responsible for carrying out urban renewal with a view to improving the living environment of residents in old districts, while the HS is a non-profit-making and self-financing organisation that provides housing and related services to the people of the community. As far as urban renewal is concerned, the Government has all along provided financial support to the URA for taking forward its programmes. In addition to the $10 billion capital injection upon its establishment, the URA receives government support through land premium waiver for its redevelopment projects. As the URA will continue undertaking new redevelopment projects in future, the amount of land premium foregone by the Government will continue to increase.

Ends/Wednesday, January 10, 2018
Issued at HKT 16:05