LCQ5: Provision of public housing facilities
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Question:
In 2005, the Hong Kong Housing Authority (HA) divested 180 non-residential properties to The Link Real Estate Investment Trust (The Link). The Link was subsequently renamed as Link Real Estate Investment Trust (Link REIT). Many members of the public have relayed that shop tenants have been constantly subject to rental increases imposed by Link REIT despite its poor management, and that a number of commercial facilities in public rental housing (PRH) estates and subsidized housing estates have been divested by Link REIT since 2014, and the management conditions of these divested facilities have further worsened. For example, shops in shopping centres have often been left vacant, and play equipment has not been maintained or has been abandoned for years. Some shopping centres have even been almost entirely converted into schools. Such changes have aroused grave dissatisfaction among local residents. In this connection, will the Government inform this Council:
(1) given that the judgement handed down by the Court of Final Appeal in 2005 on a judicial review case regarding the aforesaid sale of properties by HA pointed out that, even though the Housing Ordinance did not, expressly or impliedly, require HA to retain and control the amenities in PRH estates, HA still had a responsibility to secure the provision of amenities ancillary to housing as HA thought fit for residents, whether it has compiled statistics on the number of cases, since 2014, involving amenities ancillary to PRH estates and subsidized housing estates, which are owned by a third party over whom HA has no control, and are lacking timely maintenance or are being abandoned (with a breakdown by District Council districts), and of the information on the actions taken by the authorities as well as the latest progress of each case;
(2) whether it knows the latest ownership status of the 180 non-residential properties sold to Link REIT; if so, set out in a table the respective properties currently still owned by Link REIT and those resold, as well as the information about the owners of the resold properties; if not, how the authorities can, in the absence of such key information, fulfil the requirement under the Housing Ordinance regarding the responsibility to secure the provision of amenities ancillary to housing for residents; and
(3) whether it has summed up the effectiveness and deficiencies of the facilitation efforts made by the fifth-term SAR Government in resolving the problems relating to commercial facilities in PRH estates and subsidized housing estates?
Reply:
President,
Our consolidated reply to the question raised by the Hon Lai Tung-kwok is as follows:
The Hong Kong Housing Authority (HA) divested 180 properties in 2005 through The Link Real Estate Investment Trust (now known as Link Real Estate Investment Trust (Link REIT)) in order to focus on its core function of providing subsidised public housing and improve its financial position. It was considered that the efficiency of the commercial facilities would also be enhanced under the operation of a private entity in accordance with commercial principles.
Under section 4(1) of the Housing Ordinance, HA is required to secure the provision of housing and "such amenities ancillary thereto as the Authority thinks fit" for the persons concerned. When handing down its Judgement in 2005 on a judicial review case on HA’s divested properties, the Court of Final Appeal (CFA) affirmed that the divestment plan by HA was consistent with the objectives as laid down in section 4(1) above. According to CFA, it was not stipulated in the Housing Ordinance that tenants of public rental housing (PRH) had any statutory right to the continued retention and control by HA of the facilities while the tenants were still using the facilities. HA had already secured the provision of such facilities as long as the facilities were provided for use by the tenants, even if they were provided by a third party over whom HA had no control.
In reaching its conclusions, CFA noted that a market-oriented commercial approach would be adopted in operating the divested properties, whereas HA’s approach at that time might not be in line with private sector practice. CFA also noted that the operation mode of the relevant facilities might change.
As at June 2022, among the 180 properties divested by HA, Link REIT remains the owner of 123 properties. The names of these properties are provided at Annex I. For the other 56 (Note) properties that have been sold to other owners, the names of these properties and their respective owners are provided at Annex II.
As with other private property owners, divested property owners are governed by laws, land lease conditions and Deeds of Mutual Covenant (DMCs). The assignment deeds between HA and divested property owners also contain, on a case by case basis, certain restrictive covenants. Provided that the owners concerned comply with the legal requirements, land lease conditions, and the covenants with HA, the Government and HA cannot and will not interfere with their day-to-day operations and commercial decisions, including disposal of properties, letting arrangements, etc. However, if it is confirmed that the owner concerned is in breach of any laws, land lease conditions or covenants with HA, the relevant Government departments and HA will certainly pursue the matter seriously and take appropriate actions.
In respect of the management and maintenance matters of common areas and recreational facilities in housing estates/ courts, there are provisions under the DMCs which stipulate that the owners concerned shall discharge their responsibilities. For instance, in accordance with the provisions under some DMCs, owners are obliged to make available the recreational facilities situated in the commercial facilities for use by residents of the housing estates/courts, as well as to manage and maintain such facilities in a proper manner. As the DMC manager of some housing estates/courts, HA may, in accordance with DMC provisions, require the owners to comply with the relevant provisions. According to records, during the period from January 1, 2017 to May 31, 2022, there were 32 cases involving the maintenance of recreational facilities at the divested properties in PRH estates. All the repairs of the recreational facilities had been completed and reopened for residents’ use. Details of these repair works are set out at Annex III. For Home Ownership Scheme and Tenants Purchase Scheme, Incorporated Owners (IOs) and its property management company can refer cases to relevant divested property owners through the DMC manager for follow-up action. HA has no central record on the maintenance works concerned.
The Government encourages various stakeholders to offer their views to divested property owners, thus enabling them to have a better grasp of the concerns of the residents and the public when formulating their business strategies. In view of the fact that these properties are located in PRH estates and that their residents are major service targets, the Government encourages divested property owners to shoulder their corporate social responsibilities by strengthening communication with various stakeholders in their day-to-day operation. The Government has been meeting the management of individual divested property owners regularly to understand their development direction, as well as to relay to them the concerns of various sectors of the community.
As one of the stakeholders, HA also maintains communication with divested property owners and refer cases to IOs, their property management companies or relevant Government departments for follow-up actions in a timely manner. For example, in 2018, HA referred the concerns of tenants on the noise nuisance arising from the loading and unloading of goods in Tai Wo Hau Shopping Center to the property management company and the incident has been properly handled after the referral. In 2018, HA also sent a letter to the divested property owner in relation to the enclosure of part of the carpark at Yat Tung Estate and referred the case to the Lands Department for follow-up. After the follow-up, the relevant part was reopened later.
In fact, it is noted that divested property owners have been striving to fulfill their corporate social responsibilities through various means in recent years. An example is that a divested property owner has co-operated with non-government organisations to carry out food recycling in its fresh markets and shopping centres and assisted the production of meals and food packs for families in need. In addition, in response to the COVID-2019 epidemic, measures such as fee waivers or rent concessions were provided to tenants. I hope that divested property owners will continue to respond to the concerns of PRH residents for improving the quality of life while enhancing the operational efficiency.
Note: In 2017, Link REIT combined two properties (i.e. On Ting Commercial Complex and Yau Oi Commercial Complex at Tuen Mun), which were named as H.A.N.D.S. The two properties were counted as one in the above figures.
Ends/Wednesday, July 6, 2022
Issued at HKT 17:44
Issued at HKT 17:44
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