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LCQ5: The Tenants Purchase Scheme

    Following is a question by the Hon LEE Wing-tat and a reply by the Secretary for Transport and Housing, Ms Eva Cheng, JP in the Legislative Council today (November 14):


     The Tenants Purchase Scheme ("TPS") has been ceased since the sale of the TPS Phase 6B in August 2005.  In this connection, will the Government inform this Council:

(a) whether it will reconsider re-launching the TPS; if so, when or the circumstances under which it will be re-launched; if not, the reasons for that;

(b) whether it will consult public housing tenants on  re-launching the TPS; and

(c) of the respective numbers of housing estates and flats suitable for inclusion in the TPS at present?


Madam President,

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

(a) The Hong Kong Housing Authority (HA) introduced the Tenants Purchase Scheme (TPS) in early 1998 to enable public housing tenants to buy the flats they rented at affordable prices, thereby helping to achieve the then policy objective of reaching a home ownership rate of 70% in ten years・ time.  In 2002, following a comprehensive review of the housing policy, the Government made it clear that its role was to provide public rental housing (PRH) for low-income families, and that it should withdraw from its role as property developer by halting the production and sale of subsidised flats.  The then Secretary for Housing, Planning and Lands stated in the Legislative Council on November 13, 2002 that :home ownership should be a matter of personal choice and affordability.  It is therefore unnecessary for the Government to continue to hang on to the long term home ownership target.;  On the TPS, he said, :in order to maintain an adequate number of PRH flats to meet the demand from eligible families in the long run and to be in line with the Government・s general policy direction of withdrawing from the property market, the Government will recommend to the HA that except for the flats that were already sold and Phase 6 which has already been announced, the sale of PRH units under TPS should be halted.;  In line with this policy, the HA halted the TPS after the launch of Phase 6B in 2005.

     We do not have any plans at this stage to relaunch the TPS.  Three main considerations are relevant.  First, there are currently over 110 000 applicants on the Waiting List for PRH with an average of 2 000 to 3 000 new applications every month.  The HA must make the best use of the limited housing resources for low-income families who cannot afford private rental housing, in order to maintain the average waiting time for PRH at around three years.  Indeed, recovered flats have all along been an important source of overall public housing supply, accounting for about half of the PRH flats allocated each year on average.  The present forecast of the average annual PRH production is only about 15 000 flats for the next five years.  The HA therefore has to make effective use of the existing stock of PRH flats for allocation.  PRH flats, once sold to the tenants, will never be returned to the HA for re-allocation.  Inevitably, the HA・s ability to sustain the public housing programme and to maintain the average waiting time at around three years will be greatly undermined.

     Furthermore, the HA has encountered many problems in the management of PRH flats in TPS estates.  Regardless of the number of flats sold, a TPS estate, as in the case of a private property, has to be managed by its Owners' Corporation (OC) which decides on how the estate is to be managed.  In some TPS estates, due to the lack of the OC・s consent, the HA・s estate management measures, such as the Marking Scheme for Estate Management Enforcement, cannot be implemented in the estate public areas.  This has prevented the HA from universal implementation of its estate management policy.  Consequently, tenants living in TPS estates and those living in PRH estates are subject to different management measures.  This is not satisfactory.

    Since the implementation of the repositioned housing policy in 2002, the private property market has been operating smoothly and developing steadily.  Statistics of private property transactions over the past few years shows that there were many transactions at a price of less than two million dollars.  This suggests that there was an adequate supply of lower-priced flats in the private market, offering choices to prospective home-buyers.

(b) We will closely monitor developments in the private property market and turnover of PRH flats.  Should there be a need to review the existing policy, we will certainly conduct extensive public consultation.

(c) According to the then TPS estate selection criteria, estates for sale must be in good condition.  When selecting estates for sale, we took into account such factors as building age, building maintenance conditions and geographical distribution.  As we do not have any plans to relaunch the TPS at this stage, we have not examined how many PRH flats might be suitable for sale.

Ends/Wednesday, November 14, 2007
Issued at HKT 13:30


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