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LCQ1: The Duty of the HA to provide amenities ancillary to housing
     Following is a question by the Hon Jeremy Tam and a reply by the Acting Secretary for Transport and Housing, Dr Raymond So Wai-man, in the Legislative Council today (December 6):


     In 2005, the Court of Final Appeal handed down its judgement in the case of Lo Siu Lan v. Hong Kong Housing Authority that pursuant to section 4(1) of the Housing Ordinance, the Hong Kong Housing Authority (HA) has the duty to "secure the provision of" amenities ancillary to housing as HA thinks fit.  Subsequently, HA divested the retail and carpark facilities in its public rental housing (PRH) estates to The Link Real Estate Investment Trust (now known as Link Real Estate Investment Trust (Link REIT)).  Link REIT announced on the 28th of last month that it had signed an agreement to sell 17 shopping centres an overwhelming majority of which are shopping centres previously divested by HA.  Quite a number of PRH residents have expressed concerns that the new owners of the shopping centres will substantially raise the shop rentals, causing replacement of shops selling daily necessities by those selling luxury goods, which will result in the residents having to travel to other districts to buy daily necessities.  In this connection, will the Government inform this Council:

(1) whether it has taken the initiative to gain an understanding from Link REIT about the details of the sale of the shopping centres, and assessed the impact of the matter on the daily living of PRH residents; if so, of the details; if not, whether it will do so expeditiously;

(2) which government department is currently responsible for conducting regular reviews on whether HA has fulfilled its duty under the law to secure the provision of the facilities concerned; whether it has put in place, for the situation where it finds HA has not fully fulfilled such duty caused by the divested shopping centres not providing adequate facilities, a mechanism under which it can provide the facilities lacking in the estates concerned; and

(3) as the Chief Executive told the media during her election campaign that Link REIT was one of the "three big mountains" that the Government was facing but improvements could be made by formulating the relevant policies, whether the Government has formulated policies to lessen the impacts of Link REIT selling the shopping centres on the daily living of the residents; if so, of the details and the implementation timetable of such policies; if not, the reasons for that?



     After consulting the relevant policy bureaux, I set out my consolidated reply to various parts of the question raised by Hon Jeremy Tam as follows.

     In 2005, the Hong Kong Housing Authority (HA) divested 180 non-residential properties through The Link REIT (The Link) (renamed as Link now).  This enables HA to focus on its core function of providing subsidised public housing and improves HA's financial position in the short-to-medium term with proceeds from divestment.  Also, the efficiency of the commercial facilities would be enhanced under the operation of a private entity in accordance with commercial principles.

     When handing down its judgement in 2005 on a judicial review case regarding the aforesaid sale of properties, the Court of Final Appeal (CFA) affirmed that the divestment plan by HA was consistent with HA's objective, as laid down in section 4(1) of the Housing Ordinance.  Section 4(1) requires HA "to secure the provision of housing and such amenities ancillary thereto as the Authority thinks fit" for persons concerned.  CFA ruled that this did not mean that HA needed to be the direct provider itself, but HA secured the provision of such facilities so long as such facilities were available, even though they were not provided by HA but by a third party.  In reaching its conclusions, CFA already noted that The Link would adopt a market-oriented commercial approach in operating the retail and carparking facilities concerned, whereas HA's then approach may not always be in line with private sector practice, and that after the listing of The Link, there may be changes in relation to the operation of the relevant facilities, including, for example, the tenant trade mix.

     Since its listing, Link has been a private entity.  The Government and HA do not hold any units of Link.  The business direction and day-to-day operation of Link is entirely independent of the Government and HA.  Just like other private property owners, Link and owners of other divested properties are governed by relevant laws and conditions of land leases.  For example, uses of properties shall comply with the statutory plans prepared and published by the Town Planning Board under the Town Planning Ordinance; addition and alteration works shall be approved in accordance with the Buildings Ordinance, etc.  In respect of the restrictions under land lease, in general, the lease conditions will specify the land uses of the relevant lots, including the requirement that certain floor areas shall be used for providing commercial, residential, educational, social services facilities, etc., as well as the number of parking spaces to be provided.  Owners (including new owners of the disposed properties) must comply with the conditions as stipulated in the respective land leases, unless they have applied and obtained approval for a waiver of the relevant clause.

     The assignment deeds of the relevant properties also contain certain restrictive covenants.  These covenants stipulate that, under specific circumstances, the commercial and car-parking facilities shall not be disposed of except as a whole.  The covenants also require the owners concerned to let out certain designated units to non-profit-making organisations nominated by Education Bureau, Social Welfare Department or other designated institutions at concessionary rent or 50 per cent of market rent as assessed by HA for operating education, welfare or community facilities.  Owners shall not charge any additional management fee, otherwise HA will regard such acts as breaches of the covenants.

     As long as the relevant statutory requirements and land lease conditions are complied with, the Government cannot interfere with the owners' lawful right to use their properties.  Likewise, as long as owners concerned do not breach the aforementioned covenants with HA, HA cannot and will not interfere with their day-to-day operation and commercial decisions, including disposal of properties, leasing arrangements, etc.  However, if an owner concerned is in breach of any laws, land lease conditions or covenants with HA, the relevant Government departments and HA will certainly take appropriate actions and hold the owners accountable.

     The Government has, in various occasions, reminded Link of its legal responsibilities.  Besides its own obligation to comply with the restrictive covenants, when disposing of these divested properties, Link should also explain such restrictions to buyers properly and ensure that the restrictive covenants are incorporated in the relevant assignment deeds or other legal documents.

     As members of the general public, residents of public housing have their needs for shopping, carparking, social services, etc. fulfilled via different means, including facilities provided by various public and private organisations.  As aforesaid, as long as the relevant statutory requirements and land lease conditions are complied with, the Government cannot interfere with the owners' lawful right to use their properties and their commercial decisions.

     Regarding public markets, the Government will study the need and feasibility of new ones in districts where relevant facilities are alleged to be insufficient.

     As regards demand for carparking, as set out in the Policy Address, the Government will implement a series of short to medium to long-term measures to increase parking spaces in various districts having regard to the local situation.  The Government's current policy in the provision of parking spaces is to accord priority to considering and meeting the demand of commercial vehicles, and to provide an appropriate number of parking spaces if the overall development permits.  At present, the Transport Department mainly requires private developments or redevelopment projects to construct the necessary number of parking spaces and identifies suitable government land for use as short-term tenancy carparks so as to meet the demands for parking spaces in individual districts.  The Hong Kong Planning Standard and Guidelines (HKPSG) provides guidelines on the standards and guidance for the number of parking spaces to be provided in various developments having regard to the respective parking requirements arising from those developments.  At present, project proponents (including HA and private developers) are required to provide parking spaces for the projects' own use in accordance with the guidelines stipulated in the HKPSG.

     As to the planning of social welfare services and facilities, in general, the Social Welfare Department will take into account the needs of the local community, the overall demand for welfare services, the floor area requirements of different welfare facilities, the location and accessibility of the site, development parameters, limitations (including environmental issues such as noise and air quality), views from local community, etc. in drawing up an appropriate mix of welfare facilities to meet the local demand for such services, and cater for the wider community demand.

     On the other hand, in developing new public housing estates, HA will take into account relevant government policies and planning requirements to plan for the retail and carparking facilities in the estates.  Factors such as the scales of the estates under planning and the provision of shopping centres, retail and carparking facilities in the vicinity will also be considered during the process.  Relevant organisations, such as District Councils, will be consulted.  If necessary, HA will commission consultants to carry out retail facilities studies in the planning stage to determine appropriate retail facilities for new estates, and will also take into consideration the operational and financial viability and suitability, etc.  As at the end of September 2017, there are some 1.74 million square metres of non-domestic facilities under HA, among which over 60 per cent are welfare and community facilities, as well as shops and market stalls.  In addition, there are 151 carparks under HA providing a total of around 30 000 parking spaces.  Given the limited spaces in PRH estates and on the premise of ensuring adequate open space for residents' access and leisure, HA would endeavor to balance residents' needs for various facilities; and consider increasing the provision of non-domestic facilities where feasible, with a view to providing residents with various community, educational, welfare and retail facilities.
Ends/Wednesday, December 6, 2017
Issued at HKT 17:18
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