LCQ20: Land (Compulsory Sale for Redevelopment)(Specification of Lower Percentage) Notice

Following is a question by the Hon Mrs Regina Ip Lau Suk-yee and a written reply by the Secretary for Development, Mrs Carrie Lam, in the Legislative Council today (May 4):


The Land (Compulsory Sale for Redevelopment)(Specification of Lower Percentage) Notice specifies, in respect of three classes of lot, a lower threshold for application for compulsory sale of land i.e. from owning not less than 90% of undivided shares in the lot to not less than 80%.  It is learnt that since the commencement of the Notice on April 1, 2010, the number of applications for compulsory land sale orders made under the Land (Compulsory Sale for Redevelopment) Ordinance (Cap. 545)("the Ordinance") received by the Lands Tribunal has increased significantly: there were only 64 cases in the decade from 1999 to January 2010, but there were 21 cases last year, and 12 applications have been received so far this year.  In this connection, will the Government inform this Council:

(a) whether it has assessed the impact on the housing supply on redevelopment projects using land secured by invoking the Ordinance, including the number of residential flats supplied by these projects in the past five years, and among them, the respective numbers of residential flats with areas ranging from 35 to 40 square metres and 40 to 60 square metres;

(b) in view of the keen demand for small and medium residential flats, whether the authorities have any measure to encourage the developers to build more small and medium residential flats under their redevelopment projects on land secured by invoking the Ordinance; and

(c) whether it has market data on the number of residential flats which may be supplied in the next five years under the redevelopment projects on land secured by invoking the Ordinance; if it has, of the number?



Since the Land (Compulsory Sale for Redevelopment) Ordinance (Cap. 545) ("the Ordinance") came into operation in June 1999 and up till March 31, 2010, the Lands Tribunal ("the Tribunal") received a total of 65 applications for compulsory sale, whereas since the Land (Compulsory Sale for Redevelopment) (Specification of Lower Percentage) Notice ("the Notice") took effect on April 1, 2010 and up till March 31, 2011, the Tribunal received a total of 32 applications.  It is to be noted that among these 32 applications, only eight involve classes of lot specified in the Notice to which the 80% threshold apply, while over 70% of the applications are based on the 90% threshold.

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

(a) According to the methodology adopted by the Government in monitoring housing supply and the statistics to hand, we treat urban renewal projects on sites not subject to lease modification or land exchange as a separate category.  This type of private urban redevelopment projects as a source of residential housing land supply has provided land for developing an annual average of about 1,300 residential flats over the past five years.  On an annual basis, in the year 2010, residential housing land supply from the aforementioned private redevelopment projects can provide about 2,000 flats.  This figure is higher than the annual average of about 830 flats in the period from 2003 to 2009.  It is therefore our preliminary view that urban redevelopment of old districts as a source of residential flat supply is more important now than before.  However, based on available statistics, we cannot provide a separate analysis on how many of the residential flats from private redevelopments as mentioned above are flats produced on land secured by invoking the Ordinance.  As such, it is difficult for us to accurately assess the impact of the Ordinance on the housing supply, including the size of flats from these redevelopments.

(b) It is entirely up to the market to seek to invoke the Ordinance to secure land for redevelopment.  Hence it is a decision of the market whether to build small and medium-sized residential flats on land so secured.  Nevertheless, the Government has taken note of the public demand for small and medium-sized flats.  We have positively responded to this through the Government's Land Sale Programme and the development projects of the MTR Corporation Limited (MTRCL) and the Urban Renewal Authority (URA).  This includes specifying flat size restrictions in the sale of government land.  For example, for a site at the former Yuen Long Estate which was sold by tender some time ago, the development would provide at least 960 flats of saleable area not exceeding 60 square metres.  In addition, in this year's Land Sale Programme, we have designated five sites with flat size restrictions which are estimated to provide a total of about 3,000 small and medium-sized flats.  We commenced the tender invitation for two sites with flat size restrictions in Hung Hom on April 29 and will tender another site with flat size restrictions at Tung Chung Area 55A in June.

On another front, the Government has discussed with the MTRCL and the URA on speeding up the launch of residential sites and increasing the supply of small and medium-sized flats.  As pointed out by the Financial Secretary in the 2011-12 Budget Speech, the MTRCL will invite tender for the development at the Nam Cheong Station and the two developments at the Tsuen Wan West Station TW5 in 2011-12.  According to the preliminary design of the MTRCL, the number of flats of saleable area not exceeding 50 square metres to be provided in these three projects will double to about 4,000.  As regards the URA, a majority of the residential flats provided under its urban renewal projects are small to medium-sized, which normally account for about 60% to 70% of the total number of flats provided.

(c) Since the Ordinance came into effect in 1999, we have been monitoring the redevelopment of land secured by invoking the Ordinance.  According to data available to the Government, up till March 31, 2011, a total of 24 compulsory sale applications were granted compulsory sale orders by the Lands Tribunal and with the subject lots successfully sold.  Of these cases, the lots in 19 have been/will be redeveloped for residential use (involving 17 residential development projects).  The remaining five cases involve lots that have been/will be redeveloped for commercial use (one of which is for hotel development).  The 17 residential development projects are now under different stage of redevelopment (that is, completed/under construction/construction works has yet to commence).  According to a preliminary estimate, these 17 projects will provide about 2,600 residential flats.  As the construction of some of these development projects has yet to commence, the number of flats to be provided is subject to further adjustment.

Ends/Wednesday, May 4, 2011
Issued at HKT 14:46