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LCQ21: Redevelopment of old buildings

     Following is a question by Dr Hon Chiang Lai Wan and a written reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (February 12):


     Some members of the public have relayed to me that the introduction of a number of schemes one after another by the Government to assist owners of old buildings in carrying out building inspections and repair works reflects that the problem of poor maintenance of old buildings in Hong Kong is serious, and many of such buildings even need to be redeveloped.  In this connection, will the Government inform this Council:

(1) of the number of buildings in Hong Kong of three storeys or above that will be over 40 years old in the next 10 years, with a breakdown by District Council (DC) district set out in Table 1;

Table 1:

DC district       Number of buildings
-----------       -------------------
                  (from 2015 to 2024)
Sham Shui Po
Yau Tsim Mong
Kowloon City
Kwun Tong
Wong Tai Sin
Sai Kung
Central and Western
Wan Chai
Sha Tin
Tai Po
Tsuen Wan
Tuen Mun
Yuen Long
Kwai Tsing

(2) whether the authorities regularly conducted inspections on buildings over 40 years old in the past three years, so as to ascertain whether such buildings were structurally safe; if they did, of the frequency of such inspections; whether the authorities graded these buildings according to the inspection results (i.e. Category I: requiring emergency remedial works; Category II: with obvious defects found; Category III: with minor defects found; and Category IV: with no apparent defect); of the number of buildings which were inspected, with a breakdown by the grading of the buildings and DC district set out in Table 2;

Table 2:

DC district      Grading of the buildings
-----------      ------------------------
                 Cat.I  Cat.II  Cat.III  Cat.IV
Sham Shui Po
Yau Tsim Mong
Kowloon City
Kwun Tong
Wong Tai Sin
Sai Kung
Central and Western
Wan Chai
Sha Tin
Tai Po
Tsuen Wan
Tuen Mun
Yuen Long
Kwai Tsing

(3) whether it knows the number of applications under the Demand-led Redevelopment Project (Pilot Scheme) which were rejected by the Urban Renewal Authority (URA) in the past five years, and the justifications for rejecting such applications, with a breakdown by the name of the building concerned set out in Table 3; and

Table 3:
                          Justification(s) for
Name of the building   rejecting the applications
--------------------   --------------------------

(4) whether it knows the profit/loss status of the projects completed by URA in the past five years; whether the authorities have reviewed the reasons for the loss incurred in some of these projects and formulated remedial measures accordingly, with the relevant information set out in Table 4;

Table 4:
                   Reasons for    Remedial
Project  Profit/  incurring loss   measures
Title     Loss   (if applicable)  (if applicable)
-------  ------- ---------------  ---------------

(5) whether it will take measures to expedite the progress of redevelopment of old buildings; if it will, of the details; if not, the reasons for that; and

(6) whether it has considered acquiring and consolidating sites in old district to form sites of larger area for carrying out urban renewal projects, so as to avoid constructing high-rise buildings on small sites (commonly known as "blade-like buildings", "toothpick-like buildings"); if it has, of the details; if not, the reasons for that?



     At present, there are about 9 900 privately-owned buildings aged 40 years or above in Hong Kong (excluding the New Territories Exempted Houses).  To address the issue of urban decay and to improve the living conditions of residents in the old urban areas, the Urban Renewal Authority (URA) was established under the Urban Renewal Authority Ordinance (URAO) (Cap 563) in May 2001 and tasked to implement urban renewal programmes.  Apart from redevelopment, rehabilitation is another core business under urban renewal.  Complementary to this arrangement, the Buildings Department (BD) is forging ahead with its promotion of the need for timely building maintenance.  Through a multi-pronged approach comprising public education, financial and technical support, legislation and law enforcement, BD collaborates with the community in fostering a safe living environment.

     My reply to the six parts of the question is as follows:

(1) As at December 31, 2013, the number of private buildings aged 40 years or above of three storeys or more, broken down by District Council (DC) districts (excluding the New Territories Exempted Houses) is tabulated below:

                      Number of buildings
DC district        (approximate figures)
-----------        ---------------------
Sham Shui Po               1 200
Yau Tsim Mong              1 860
Kowloon City               1 580
Kwun Tong                    370
Wong Tai Sin                 280
Sai Kung                      30
Southern                     440
Central and Western        1 460
Eastern                      580
Wan Chai                   1 140
Sha Tin                       60
Tai Po                        80
North                        190
Tsuen Wan                    300
Tuen Mun                      30
Yuen Long                    150
Kwai Tsing                   120
Islands                       20
Total (Approx. figure)     9 900

     According to BD's rough estimate, the number of buildings aged 40 years will increase annually by about 600 in the next 10 years.  As it is difficult to predict the pace of redevelopment of old buildings by private owners, BD cannot accurately estimate the number of private buildings aged over 40 years of three storeys or more in the various districts across the territory in the next 10 years.

(2) Although it is the owners' responsibility to carry out regular inspection and timely maintenance of their buildings to ensure building safety, under the premise of safeguarding public safety, BD has implemented a series of measures and regular operations to inspect aged and/or dilapidated buildings.  Private buildings aged over 40 years of three storeys or more will also be covered in the inspection and review if they are the target buildings of the relevant measure or operation.  Details are appended below:
(i) BD has fully implemented the Mandatory Building Inspection Scheme since June 30, 2012.  Under the scheme, the Building Authority will select a certain number of private buildings aged 30 years or above every season (except domestic buildings not exceeding three storeys), and issue statutory notices to the owners of the selected buildings requiring them to carry out prescribed inspections and (if necessary) prescribed repairs with respect to the common areas of the buildings within a specified period.

(ii) BD carries out "large scale operations" every year to inspect dilapidated buildings, including buildings that may pose danger based on reports made by the public or information known to BD through other channels.  In these operations, once BD identifies buildings that pose danger, or with defective drainage systems, BD will issue statutory investigation orders and repair orders against those buildings.  In cases of emergency or serious nuisance on hygiene grounds, BD will carry out the necessary rectification work first and recover the costs from the owners afterwards.

(iii) BD arranges regular staff inspection to existing pre-war buildings across the territory to ascertain their safety conditions.

     In the course of the above operations, should emergency and defective cases be identified, BD will immediately follow up in accordance with established procedures.  BD does not give separate ranking to the buildings that have been inspected according to their conditions.

(3) The Urban Renewal Strategy (URS) promulgated in February 2011 proposes that in responding to the requests of owners, redevelopment by URA can take more diverse forms.  In July 2011, URA launched the Demand-led Redevelopment Project Pilot Scheme (the Demand-led Scheme).  Up till now, three rounds of the Demand-led Scheme have been launched.  25 applications were received in the first round, of which three were selected by URA.  34 applications were received in the second round, of which four were selected.  For the 51 applications received in the third round, a number have been selected for inclusion in URA's 2014-15 Business Plan for implementation.

     The basic application requirements for the three rounds of the Demand-led Scheme are as follows:

(i) the application must be submitted by owners of not less than 67% of the undivided shares of each lot within the site under application;

(ii) the area of the site under application should be larger than 400 square metres; and

(iii) all the buildings within the site are classified as "poor" or "varied" in URA's Building Conditions Survey.

     Upon receipt of the applications, URA will shortlist for further consideration those applications which meet the above basic requirements, including ranking those applications.  The ranking criteria include the state of dilapidation of the buildings, the extent of planning gain which the redevelopment will bring to the community, the existing living conditions of the residents and the implementability of the redevelopment project, etc.

     The implementation of a selected project is subject to the acceptance of URA's conditional offers by owners of not less than 80% of the undivided shares of each lot within the site within a specified period of time, as well as the granting of authorisation by the Secretary for Development for URA to implement the project.

     The seven projects selected by URA in the first two rounds of the Scheme had been commenced.  With the exception of one project, which was terminated due to the failure in getting the owners of 80% of the undivided shares of the site under application to accept URA's conditional offers, the other six projects are being implemented.

     Selected projects of the third round are originally scheduled for commencement after April 1, 2014.  Due to the special circumstances of the project at Kai Ming Street, commencement of this project was advanced to December 2013 upon the endorsement of the URA Board and the approval of the Financial Secretary.

    As regards the names of buildings that have not been selected, as the disclosure of information on these buildings involves privacy issues and might compromise the interest of the building owners themselves, in the absence of the owners' prior consent, URA is not in a position to disclose the names of the buildings.  These applications have not been selected because some of them failed to meet the basic requirements, while others did not fare well in the ranking process.

(4) In response to the request of the LegCo Panel on Development, URA has been reporting the financial results of its completed projects to the Panel annually since 2009-10.  Details of the revenue and expenditure positions of the 16 completed projects that have already been reported are shown in the attached table.

     According to URA, it has been able to record a surplus for the completed redevelopment projects is mainly due to the buoyant property market as well as the significant rise in property prices over the past 10 years.  If these redevelopment projects are evaluated in accordance with the "mark to market" principle at the time when redevelopment was decided, it is expected that most of them would record a deficit. (Note: The Centa City Index was 40.67 when URA was established in 2001.  Since then, the index has been rising and reached 118.20 in end-2013.  The index has risen by 290% in the past 12 years.)

(5) URA has to implement its redevelopment projects in accordance with the policy framework stipulated under the URAO and the URS.

     For the small to medium-sized development projects of URA, it takes about six to eight years from project commencement, acquisition, resumption, tendering, construction to project completion.  For the larger-scale projects such as the Kwun Tong Town Centre Development Project, it takes over ten years to complete.  The larger-scale projects has a longer implementation timetable mainly because of the complex planning parameters involved and the need to address the diverse aspirations of the local community and the affected households and shop operators.  For example, the Kwun Tong Town Centre project has to be implemented by phases so as to minimise any adverse impact that redevelopment will bring to the existing services and facilities (including government services, transport facilities, hawker bazaar, etc) and to maintain their smooth operation as far as possible.

     To a certain extent, the progress of all URA redevelopment projects will also hinge on the progress with the clearance of the affected shop operators and residents at site.  URA has always adopted the "people-first" principle and made best endeavours to reach settlement with those few occupiers who may still remain at the project sites.  To meet public expectation for speeding up the pace of urban renewal, URA will review the whole redevelopment process, with a view to identifying room for expediting the process while adhering to the framework and the requirements of the URAO and the URS.

(6) Since its establishment in 2001, URA has commenced or undertaken some 60 redevelopment projects, including those projects commenced by the ex-Land Development Corporation (ex-LDC), projects announced but not yet commenced by ex-LDC, projects entrusted by URA to the Hong Kong Housing Society, projects initiated by URA and projects commenced under the Demand-led Scheme.

     These projects vary in size.  Some examples of large-scale projects will include the Kwun Tong Town Centre development project (with site area of 5.35 hectares); the Lee Tung Street/McGregor Street project (with site area of 8 236 square metres); the Hai Tan Street/Kweilin Street and Pei Ho Street project in Sham Shui Po (with site area of 7 440 square metres); the Peel Street/Graham Street project in Sheung Wan (with site area of 5 330 square metres).  Taking the Kwun Tong Town Centre project as an example, apart from providing for residential and commercial uses, the new development will also provide a public transport interchange, landscaped areas, hawker bazaar, and Government, institution or community facilities.  Other URA redevelopment projects also bring about planning gain and social benefits to the community and the local area in varying degrees.

     The Demand-led Scheme launched by URA in 2011 has a minimum site area requirement of not less than 400 square metres, which is generally smaller than the site areas of URA's self-initiated projects. Considering that each demand-led application to be submitted must be sponsored by owners of not less than 67% of the undivided shares of each lot within the application site, which may be hard to achieve, URA has set a smaller minimum site area requirement to facilitate the applicants.

     Since the launch of the Demand-led Scheme, eight projects have been commenced.  The site areas of some of these projects are well above the threshold requirement.  While the Demand-led Scheme has been well-received, URA is facing the challenge of an increasing number of applications with larger site areas and which require the consideration of more varied factors.  For the purpose of maintaining a sustainable urban renewal programme that balances the goal of a better utilisation of land, brings improvement to the living conditions of the affected households and at the same time, is capable of being self-financed in the long run, URA will conduct a review of the pilot scheme with a view to, inter alia, better rationalisation of resources deployed for the Demand-led Scheme vis-à-vis its self-initiated redevelopment programme.

     URA subscribes to the view that large-scale redevelopment projects can bring more significant benefit to the community.  URA will continue to pursue an urban renewal programme adopting the people first, district-based and public participatory approach under the 2011 URS, while maintaining the goal of being self-financed in the long run.

Ends/Wednesday, February 12, 2014
Issued at HKT 15:45


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