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LCQ15: Supply of public housing
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     Following is a question by the Hon Wu Chi-wai and a written reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (Jun 21):
 
Question´╝Ü
 
     Units put up for sale in recent years under the Home Ownership Scheme (HOS) and the Green Form Home Ownership Pilot Scheme (GFHOPS) have both recorded over-subscription, and De Novo, a subsidised housing project implemented by the Urban Renewal Authority (URA), has also been very well-received. On the other hand, the Government promulgated the Long Term Housing Strategy (LTHS) on December 16, 2014, setting a supply target for public and private housing in the coming decade at 480 000 units, with a public-private housing split of 60:40. Regarding the supply of public housing, will the Government inform this Council:
 
(1) in each of the two periods from the promulgation of LTHS to now and from now to 2024,
 
(i) of the respective numbers of public and private housing units completed/expected to be completed and their relative ratios (set out in a table such information by year and District Council (DC) district);
 
(ii) among the public housing units completed/expected to be completed, of the respective numbers and percentages of those which are (a) public rental housing units, (b) HOS units, (c) GFHOPS units, (d) subsidised housing units built by the Hong Kong Housing Society, and (e) subsidised housing units built by URA (set out in a table such information by DC district); and
 
(iii) of the respective areas and relative ratios of lands that were used/expected to be used for building public and private housing (set out in a table such information by year and DC district);
 
(2) whether it has assessed if there is any imbalance between the supply of and demand for various types of subsidised housing; if it has assessed and the outcome is in the affirmative, of the corresponding measures, including whether the Government will (i) set a target on the number of subsidised housing units to be built, (ii) formulate a concrete proposal to increase the supply of subsidised housing, (iii) revise the current public-private housing split, and (iv) revise the current ratio of areas of the lands used for building public and private housing each year, so as to increase the public housing production;

(3) given that quite a number of people in the sandwich class who aspire to acquire home ownership can neither afford the down payments for private housing nor be eligible for applying for HOS, whether the authorities will invite URA or other relevant organisations to offer subsidised housing similar to that under the Sandwich Class Housing Scheme; if not, of the measures the Government has in place to assist such people in acquiring home ownership;
 
(4) of the total number of sites which have been rezoned from private housing use to public housing use since 2014; the following information regarding each site: (i) the location, (ii) the date of rezoning, (iii) the type of public housing built/expected to be built on the site, (iv) the number of units to be provided by the public housing project concerned and (v) the date of completion of such units; and
 
(5) whether it has assessed, among the sites in the Land Sale Programme for this year, the number of private housing sites (in particular those which have not been sold over the years) that are suitable for rezoning to public housing use; whether the Government will formulate objective criteria for rezoning; if so, of the details; if not, the reasons for that?

Reply:
 
President,
 
     After consulting the Development Bureau (DEVB), my consolidated reply to various parts of the question raised by the Hon Wu Chi-wai is as follows:
 
     The Government announced the Long Term Housing Strategy (LTHS) in December 2014. Adopting the supply-led and flexible principles, the LTHS advocates increasing the supply of public rental housing (PRH) units and subsidised sale flats (SSFs); facilitating market circulation of existing SSFs; and rebuilding the housing ladder. The Government reviews the long term housing demand projection annually in order to capture social, economic and market changes over time, and presents a rolling ten-year housing supply target which serves as a planning guide for the Government to identify land for housing development.
 
     The total housing supply target for the ten-year period from 2017-18 to 2026-27 is 460 000 units with a public/private split of 60:40. This comprises 200 000 PRH units and 80 000 SSFs to balance the continued demand of the grassroots for PRH and the home ownership aspirations of low-to-middle income families; whereas the private housing supply target is 180 000 units. The adoption of the public/private split of 60:40 for the supply of new housing units is to underline the Government's commitment in increasing public housing supply while ensuring the stable and healthy development of the private market. As land supply is limited, further enlarging the proportion of public housing out of the total new housing supply will inevitably reduce the supply of private housing. This will exert pressure on prices and rents in the private residential market and render private flats unaffordable to even more people. Therefore, we must strike a careful balance between public housing and private housing development.
 
     According to the latest projection, the estimated public housing production for the five-year period from 2016-17 is 94 600 units, comprising 71 900 PRH units and 22 700 SSFs. Since the resumption of the Home Ownership Scheme (HOS) in 2014, the Hong Kong Housing Authority (HA) and the Hong Kong Housing Society have sold about 4 800 and 1 000 units of new HOS flats/SSFs respectively. At the same time, HA launched two rounds of the Interim Scheme of Extending the HOS Secondary Market to White Form (WF) Buyers in 2013 and 2015 respectively and enabled over 4 000 WF Buyers to purchase flats in the Secondary Market. In addition, HA launched the first "Green Form Subsidised Home Ownership Pilot Scheme" project at San Po Kong in October 2016 and sold all 857 flats. HA will review the above two schemes to decide on their way forward.
               
     As for the Urban Renewal Authority (URA), in response to the Chief Executive's suggestion in the 2015 Policy Address, URA converted some of the units in its Kai Tak Development into SSFs and sold 322 flats. The sale of SSFs in the Kai Tak Development was a one-off measure and URA currently has no plan to implement other SSF projects.
 
     Development of land and housing requires substantial amount of public resources, including land, financial and manpower resources. With limited resources and the serious demand-supply imbalance in housing, the Government will accord priorities to house PRH applicants to PRH and to assist low to middle-income families to attain home ownership through various schemes such as HOS. In the most recent pre-sale of HOS flats, the income limit of WF family applicants is $52,000 per month.
 
     On private housing, as at end-March 2017, the projected supply from the first-hand private residential property market for the coming three to four years is approximately 96 000 units, a record high since the first release of the quarterly statistics on the supply of first-hand private flats in September 2004, representing an increase of 48 per cent comparing with the figure when the current-term Government assumed office in July 2012. Steady increase in housing land supply and implementation of appropriate demand-side management measures help stabilise property price and rental levels, which will in turn benefit people from all walks of life who intend to attain home ownership. Owing to the persistent global environment of low interest rates and easy credit, the local residential property market has been exuberant with an increasing home purchase affordability ratio. The Government thus adopts a two-pronged approach to increase housing land supply on the one hand, and implement appropriate demand-side management measures on the other, with a view to reducing the risk of a property market bubble and ensuring steady and healthy development of the market. Given the still tight housing supply, we have no plan to launch measures such as home purchase subsidy lest this would lead to an even more buoyant market and push up property prices.
 
     On land supply, DEVB and the Planning Department (PlanD) have been identifying suitable housing sites in accordance with the ten-year housing supply target set under the LTHS. For example, some 210 housing sites are being rezoned progressively to increase housing supply in the short to medium term and they could provide over 310 000 housing units, with over 70 per cent (about 219 000 units) for public housing. As at early June 2017, 96 sites have been zoned or rezoned for housing development, and are estimated to provide a total of about 117 100 housing units (about 69 900 public housing and 47 200 private housing units). Another 19 sites had their statutory rezoning procedures initiated and if completed, they are estimated to provide a total of about 13 000 housing units (about 11 300 public housing and 1 700 private housing units). In the medium to long term, the proportion of public housing in the new development areas (NDAs) and new town extensions (including the Kwu Tung North and Fanling North NDAs, Tung Chung New Town Extension, Hung Shui Kiu NDA and Yuen Long South Development) ranges from 50 per cent to 60 per cent, so as to provide sufficient housing land to support the housing supply target. In short, the Government will make reference to the prevailing housing policy and the housing supply target with public/private split of 60:40 as recommended under the LTHS, and consider the circumstances of individual districts and sites when allocating land for public and private housing developments.
 
     DEVB and PlanD have been working closely with the Transport and Housing Bureau and the Housing Department to identify and provide suitable land to HA for developing public housing. The Government also maintains a certain number of sites in the Land Sale Programme in order to provide the market with a steady supply of sites for private residential development and to respond to the community's housing needs. The Government reviews the situation from time to time to determine the most suitable use of sites. Where appropriate, sites originally planned for private housing will be re-allocated for public housing. In planning for the most suitable land uses, a series of factors have to be considered, including local characteristics, surrounding environment, visual impact, air ventilation, traffic impact, noise impact, community facilities, and infrastructural capacities (e.g. water supply, drainage and road) of the area concerned, etc.
 
     In order to increase public housing production, the Government has been sparing no effort in identifying suitable sites and exploring the feasibility of increasing the development density of developed areas, rezoning existing land and developing new development areas, as well as optimising the development potential of each site in order to maximise public housing production where planning and infrastructure terms permit. We will not underestimate the challenges arising from the planning process and from the community, hence it may require a longer time to implement measures for increasing land and housing supply. We hope the society as a whole will collaborate to accord priority to addressing the pressing housing needs of the general public and accept the necessary trade-offs.
 
     The information about the number of public and private housing completion in Hong Kong as enquired in Parts (1)(i) and (ii) of the question is at Annex 1. The information about the areas of sites for public and private housing construction as enquired in Part (1)(iii) of the question is at Annex 2.
 
     The information about sites transferred from private housing to public housing sites from 2014 up till now as enquired in Part (4) of the question is at Annex 3.
 
Ends/Wednesday, June 21, 2017
Issued at HKT 16:55
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