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LCQ10: Urban Renewal Authority's special measures for owners and tenants affected by the proposed Chun Tin Street/Sung Chi Street redevelopment

     Following is a question by the Hon Claudia Mo and a written reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (June 1):


     Last month, the Urban Renewal Authority (URA) announced the replanning of the Chun Tin Street/Sung Chi Street development project (the redevelopment project) and the implementation of one-off special measures (special measures) for domestic owner-occupiers (the owners concerned) affected by the project. Under those measures, URA will, within around three months, make offer to purchase the properties of the owners concerned at market prices and further provide a special Home Purchase Allowance (HPA) for those owners upon approval given by the Town Planning Board (TPB) for the redevelopment project later. The entire acquisition process may need to be delayed for a period of two years or more. It is learnt that some owners have queried that URA has replanned the redevelopment project, ostensibly for improving the traffic and pedestrian access of the redevelopment project in the future, but in actual fact to increase revenue by doubling the number of flats that may be built under the project from 150 to 310. In this connection, will the Government inform this Council:

(1) given that as the owners concerned will not be entitled to the special HPA in the event that TPB ultimately does not approve the redevelopment project, those owners consider the special measures tantamount to requiring them to share the risk of the project with URA, whether the authorities knew and agreed to beforehand the implementation of the special measures by URA; if so, of the justifications for that;

(2) whether it knows if URA adopted similar special measures for its redevelopment projects in the past; if URA did, of the details;

(3) whether it will require URA to consider giving up implementing the special measures for the redevelopment project and reverting to the usual practice of employing surveyors to estimate the value of a notional replacement flat which is defined as a seven-year old flat of comparable size, situated in a similar locality and located at the middle floor with average orientation, and using the relevant estimated average price per square foot to calculate the amount of HPA payable for disbursing that allowance in one go to the owners concerned when making offer to purchase the relevant properties; and

(4) given that URA will rehouse the tenants affected by the redevelopment project only after the project has been approved by TPB, whether there is any discrepancy between such an arrangement and the existing policy; whether the authorities have assessed if such an arrangement is reasonable; if they have assessed and the outcome is in the affirmative, of the justifications for that?



     With a view to improving the roads and pedestrian environment within the district and having considered the relevant planning merits and benefits to the community, the Urban Renewal Authority (URA) announced on May 6, 2016 (the commencement date) in a gazette notice in accordance with the Urban Renewal Authority Ordinance (the Ordinance) (Cap 563) the commencement of the Chun Tin Street/Sung Chi Street redevelopment project KC-008(A) (the development scheme), which would include Chun Tin Street in the scope of redevelopment. Concurrently, the URA withdrew and terminated the project KC-008 commenced earlier on January 16, 2015 covering the same buildings (the original project). Based on the URA's preliminary proposal, the development scheme will provide about 310 small to medium-sized residential units, approximately two times the number of residential units proposed in the original project, with commercial and retail facilities on the lower floors.

     On the basis of the information provided by the URA, my reply to the four-part question is as follows:

(1) Under normal circumstances, when the URA commences a development scheme in accordance with section 25 of the Ordinance, acquisition offers will only be made to owners after approval is given to the project concerned upon completion of the town planning procedures. Also, according to the URA's established acquisition and compensation policies, the acquisition offer will comprise the market value of the property concerned and a special allowance.

     In view of the special circumstances of the development scheme, the URA Board has approved that one-off special measures be offered to the residents affected by the development scheme. Under the relevant arrangements, in consideration of their own circumstances and needs, the property owners may opt to sell their properties to the URA either in about three months' time after the commencement date of the project concerned (i.e. May 6, 2016) without having to wait for the relevant project approval, or after the development scheme concerned is approved in accordance with the Town Planning Ordinance (the approval date).

     In addition, the URA will pay after the approval date a special allowance to each owner who has sold his/her property to the URA. The amount of the special allowance is the total sum of the market value of the property and the applicable allowance(s) evaluated on the commencement date or the approval date of the development scheme, whichever is the higher, less the market value of the property already paid to the owner.

     Under the arrangements of the above one-off special measures, whether the property owner chooses to sell his property in advance or after relevant approval of the development scheme is obtained, the total acquisition price will be the same regardless of the owner's choice. The special measures will guard against any changes in the total acquisition price arising from fluctuations in the property market between the commencement date and the approval date of the development scheme.

(2) It is the first time that the URA, after considering the relevant planning merits and benefits to the community, withdrew and terminated a redevelopment project launched earlier and commenced at the same time a new development scheme covering the same buildings. In view of the special circumstances of the said development scheme/project, the URA has formulated these appropriate one-off special measures, which will give the affected residents an alternative option to sell their properties before approval of the development scheme is obtained. The said special measures will apply only to this development scheme and should not be treated as a precedent that can be applied to any other existing or future URA redevelopment projects/development schemes.

(3) In view of the special circumstances of the project, the above one-off special measures are offered to the affected owners as an alternative allowing them to receive the market value of their properties earlier, but not as a replacement of the established acquisition and compensation policy or the calculation method of Home Purchase Allowance.

(4) The URA can only handle the compensation and rehousing matters for tenants after all the acquisition procedures are completed and the relevant property titles are obtained. Under the development scheme, compensation and rehousing arrangements for tenants will still be made in accordance with the existing policy.

     After promulgation of the development scheme, the URA has conducted briefing sessions to explain to the affected residents the development scheme and the related compensation arrangements, including the above one-off special measures. The URA will maintain close liaison with them to ease their concerns.

Ends/Wednesday, June 1, 2016
Issued at HKT 14:34


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