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LCQ3: Tenants Purchase Scheme
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     Following is a question by the Hon Chan Yuen-han and a reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (October 31):

Question:

     In the 1997-1998 Policy Address, the Government pledged that it would, within 10 years, provide the opportunity for at least 250 000 families living in public rental housing to buy their flats, with a view to achieving 70% home ownership by the end of 2007.  The Hong Kong Housing Authority (HA) therefore launched the Tenants Purchase Scheme (TPS) in early 1998, but the Scheme was halted in 2005.  In this connection, will the Government inform this Council:

(a) of the respective numbers of housing estates and flats that had been included in TPS in the past, the number of flats sold each year, and the percentages of such numbers against the total number of tenants eligible for TPS, with a breakdown by housing estate; given that the households in TPS estates include both tenants and owners, of the number of complaints and requests for assistance relating to building management and maintenance received by the authorities so far, and the relevant details;

(b) given the persistently high prices of private housing at present, whether the authorities will consider afresh re-launching TPS, so as to provide the opportunity for more families to buy their own flats; if they will, of the factors for consideration as well as the details; if not, the reasons for that; and

(c) whether the authorities will request HA to conduct in-depth discussion on the current situation and future development of TPS; if they will, of the details and the relevant arrangements; if not, the reasons for that?

Reply:

President,

     The Tenants Purchase Scheme (TPS) was introduced in 1998 by the Hong Kong Housing Authority (HA) to enable public rental housing (PRH) tenants to buy the flats they lived in at a discounted price, thereby helping to achieve the then policy objective of attaining a home ownership rate of 70% in Hong Kong in ten years' time.

     Subsequently, in response to the significant change in the property market and the economic downturn following the Asian financial crisis, the Government re-positioned the housing policies in 2002. These included the dropping of the target for home ownership, and the withdrawal of HA from the property sale market as far as possible.  Thus, there were no longer any grounds for continuing the TPS.  Accordingly, the HA decided to cease the sale of PRH flats after launching Phase 6B of the TPS in August 2005.

     Out of a total of about 183 700 flats available for sale in the 39 estates with TPS implemented, about 121 100 flats have been sold as at the end of September 2012, representing 66% of the total number of flats available for sale.  The relevant statistics are at Annex A.  There were still about 62 600 unsold flats in TPS estates.  Tenants living in these units can opt to buy the flats they are living in.  A table setting out the years of launch of sale for each TPS estate over the years and their respective sale position is at Annex B.

     The TPS estates of the HA, regardless of the number of flats sold, are no different from private premises.  Flat owners of HA's TPS estates will form their Owners' Corporation (OC) in accordance with the Deeds of Mutual Covenant and the Building Management Ordinance. Once the OC is formed, it will take over the management of the estate from the HA, and appoint private property management agencies to administer management matters of the estate.  At present, all of the 39 TPS estates have formed their own OCs and appointed property management agencies to carry out the management and maintenance works in the estates.  The HA does not have information on the number of complaints and requests received regarding estate management.

     As for the enquiry of the Hon Chan as to whether the TPS would be re-launched, the Government has two main considerations in this regard.

     Firstly, the number of PRH applications has increased persistently in recent years, reflecting the keen demand from the community.  As at the end of June 2012, there were over 199 600 applications on the Waiting List.  Apart from new flats built each year, recovered flats are also an important source of PRH supply.  Selling PRH flats to tenants is tantamount to reducing the overall supply of PRH.  Inevitably, the turnover and supply of PRH flats will be affected, and this will eventually affect the HAs ability to maintain the average waiting time for general applicants (excluding non-elderly one-person applicants under the Quota and Points System) at around three years.

     Secondly, at present, the HA has encountered many problems with the management of the residual PRH flats in the 39 TPS estates.  The HA's estate management policies cannot be fully implemented in these TPS estates, resulting in PRH tenants living in the TPS estates and those living in non-TPS estates being subject to different management regimes.  For example, the Marking Scheme for Estate Management Enforcement is not implemented in the public areas of all TPS estates.  The HA can only deal with the misdeeds committed in rental flats of the TPS estates, such as accumulating a large quantity of refuse inside premises, throwing objects from height, etc.  As for misdeeds committed in public areas, such as littering, boiling wax, etc, they cannot be dealt with by the Marking Scheme.

     In view of the above, we do not intend to re-launch the TPS in other public housing estates.  That said, let me repeat the point that under the existing policy, sitting tenants in the 39 TPS estates can still opt to buy the rental flats in which they are living.

     We understand that the community is very concerned about the livelihood issue of housing.  The Government provides housing choices at different levels for people with different levels of affordability.  PRH is the entry point at which low-income families who cannot afford private rental accommodation may secure decent, subsidised rental accommodation.  The HA will continue to take on the responsibility of providing PRH in order to meet the basic housing needs of these people.

     Beyond the PRH, we will resume the Home Ownership Scheme (HOS) in response to the aspirations of low and middle-income families to buy their own homes.  Some 17 000 new HOS flats will be provided over the four years from 2016-17 onwards.  The Government has already commenced a review of the long term housing strategy to conduct a comprehensive assessment of housing demand of various sectors and groups of the community, which will facilitate the planning of housing supply for both the public and private sectors in the medium and long run, including meeting the home ownership aspiration of the community.  In the short term, the HA will release the 832 Surplus HOS flats for sale early next year.  As for the 1 000 flats of the Tsing Luk Street project being developed by the Hong Kong Housing Society, which was originally under the "My Home Purchase Plan", sales arrangements will be announced towards the end of this year.

     Besides, those living in PRH with aspiration for home ownership can also purchase second-hand HOS flats and TPS flats with premium not yet paid under the Secondary Market Scheme.  At the same time, as an interim measure before the first batch of new HOS flats are completed in 2016-17, we will, starting from next year, allow 5 000 buyers with White Form status each year to purchase HOS flats and TPS flats with premium not yet paid on the Secondary Market.

Ends/Wednesday, October 31, 2012
Issued at HKT 16:50

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