CE's speech in delivering "The Chief Executive's 2022 Policy Address" to LegCo (4)

Develop Northern Metropolis as the New Engine for Growth

54. The Northern Metropolis is the foothold for Hong Kong's strategic development as well as the new engine for Hong Kong to scale new heights. The current-term Government will take forward the development of the Northern Metropolis in full steam. A number of major development projects in the area have already commenced. We will enhance quantity, speed, efficiency and quality in various aspects to vigorously compress the time required for turning pieces of "primitive land" into "spade-ready sites" for major projects by half from more than 10 years in the past.

55. The Government will establish a Steering Committee on the Northern Metropolis and an Advisory Committee on the Northern Metropolis to strengthen the governance system for the development of the area. The former will be led by the Chief Executive to provide high-level policy steer and supervision. The latter, to be chaired by the Financial Secretary and comprising experts and stakeholders in the community, will tender advice and suggestions. The HKSAR Government will collaborate closely with the Guangdong Provincial Government, with a view to enabling the Northern Metropolis to radiate beyond its geographical boundary and creating synergy with the Guangdong Province, the Shenzhen Municipality and the GBA. A department dedicated to the development of the Northern Metropolis will also be set up next year to steer various departments and co-ordinate their innovative efforts in pressing ahead with the development. Our target is to formulate a concrete plan and an action agenda for the Northern Metropolis within next year.

56. Upon completion, the Northern Metropolis will emerge as a "new international I&T city", integrating quality life, new economies, and culture and leisure. Innovative urban design will help promote home-job balance, green living and the co-existence of development and conservation. We will fully leverage the advantages of the Northern Metropolis's proximity to the hinterland to promote the comprehensive development of control point areas. On its west, the Hung Shui Kiu/Ha Tsuen New Development Area (NDA) will be the focus. With its geographical proximity to Qianhai, it will become a central business district with a catchment reaching Shenzhen and even the GBA. The central part, with the San Tin Technopole as its core, will pool I&T enterprises and create synergy with Shenzhen's I&T cluster just across the river, becoming a diversified test bed for innovation. Modern industries in the New Territories North New Town can also benefit from collaboration with Shenzhen. Endowed with rich natural and tourism resources, the east side is best placed for recreation and tourism development for Hong Kong and Shenzhen. We will:

(i) press ahead with land creation and housing construction – We will take forward in full swing major projects that have commenced in Kwu Tung North/Fanling North, Hung Shui Kiu/Ha Tsuen, Yuen Long South, etc. Planning for the majority of other development projects, including San Tin Technopole, has already commenced. Our target is to commence land resumption procedures for all development projects within five years, and to form 40% of the new development land and complete 40% of the new flats within 10 years;

(ii) increase development intensity – We will make the best use of the land resources in the Northern Metropolis by adopting higher plot ratios. As a guideline, the maximum plot ratio for residential sites will be 6.5 (higher than that of 5 for earlier generations of new towns like Sha Tin), while that for commercial sites will be 9.5;

(iii) make available sites for different industries – Sites will be made available gradually in the next five years to support the development of I&T and other industries. Three buildings are under construction in the Lok Ma Chau Loop in San Tin Technopole, and part of the land in the Loop will be ready for attracting businesses and investment from next year. The first batch of San Tin I&T sites outside the Loop will commence works in 2024, while the first batch of sites for development of industrial buildings in areas earmarked for logistics and emerging industries in Hung Shui Kiu and Yuen Long will be available from next year. Hung Shui Kiu/Ha Tsuen NDA is positioned as a modern service hub, and site formation works for the commercial sites near Hung Shui Kiu Station will also be completed in 2026;

(iv) construct landmark developments – We will plan for a number of landmark developments in the Northern Metropolis such as cluster of cultural facilities, post-secondary education institutions, major sports facilities, hospital networks and cluster of government facilities to facilitate development of the area and to provide a quality living environment. Certain government offices currently in central business districts with no specific location requirements will be relocated to the Northern Metropolis, including for example nearly 40% of the office floor area in the Queensway Government Offices, with a view to driving the development of the area and releasing the land in the central business districts;

(v) pursue proactive ecological conservation – Upon completion of the relevant study next year, we will implement a New Proactive Conservation Policy to gradually resume private wetlands and fish ponds with ecological value and develop a Wetland Conservation Parks System, with a view to increasing the environmental capacity for the development of the Northern Metropolis. Separately, we will initiate the statutory procedures for designating about 500 hectares of land in Robin's Nest as a country park in 2024, which will echo with the Shenzhen Wutong Mountain Scenic Area, creating a cross-border ecological corridor between Hong Kong and Shenzhen. We will gradually open up Sha Tau Kok (excluding Chung Ying Street) in 2024 for cultural and eco-tourism activities and will consult the local community early next year; and

(vi) foster cross-border interactions – With a favourable location in proximity to the hinterland, the Northern Metropolis can create synergy with the Mainland in areas such as industry development, land use and ecological conservation. Hong Kong and the Mainland have already set up task forces under the Guangdong-Hong Kong and Hong Kong-Shenzhen co-operation mechanisms to deliberate on cross-boundary integration proposals for creating greater value for the Northern Metropolis.

Uplift the Productivity of the Construction Industry

57. In the next few years, the Government's annual capital works expenditure will exceed $100 billion. The DEVB will establish a cross-departmental steering committee for co-ordinating the development of high productivity construction methods such as Modular Integrated Construction (MiC) and the streamlining of related approval processes to remove barriers for the industry. The steering committee will formulate measures next year to strengthen the MiC supply chain, including making available land in the Northern Metropolis for manufacturing and storage of modules by the industry, and fostering collaboration with the GBA. In addition to expediting housing supply, these measures will strengthen the leading regional position of Hong Kong's construction industry in the adoption of MiC.

Support Local Tourism

58. We will continue to promote characteristic local tourism by allocating $600 million for a three-year Cultural and Heritage Sites Local Tour Incentive Scheme to encourage the tourism industry to develop products with cultural and heritage elements. In addition, the Hong Kong Tourism Board (HKTB) will launch a new round of Spend-to-Redeem Local Tours and Staycation Delights with increased quotas to enhance local ambience and consumption. To re-establish Hong Kong's position as the region's premier destination for meetings, incentive travels, conventions and exhibitions (MICE), the HKTB will enhance its support for MICE tourism in light of the epidemic development so as to attract more high value-added overnight visitors to Hong Kong.

Promote the Sustainable Development of the Agriculture and Fisheries Industry

59. The Environment and Ecology Bureau (EEB) will work hand in hand with the agriculture and fisheries industry to formulate a blueprint for the sustainable development of agriculture and fisheries to promote the upgrading and transformation, modernisation and sustainable development of the industry. An array of measures covering finance, infrastructure, land and technical support will be rolled out in phases by the EEB to raise the quality and value of local produces, as well as the productivity of the industry.

V. Earnestly Address People's Concerns and Difficulties in Daily Life

Land and Housing as the Top Priority

Policy Belief

60. Solving the housing problem tops the agenda of the current-term Government. To deal with the problem of inadequate accommodation including sub-divided flats, we need breakthroughs in housing supply and solutions to address the long-term problem of housing shortage. The objective is to let people see the hope of getting on the housing ladder earlier and having more decent housing.

Current Situation and Challenges

61. According to the final report of the Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030 (the Hong Kong 2030+), the overall land supply in the coming 30 years (from 2019 to 2048) will be over 7 000 hectares, exceeding the demand of some 6 000 hectares by about 1 000 hectares. Based on the Long Term Housing Strategy (LTHS), the projected demand for public housing in the next 10 years will be 301 000 units. While we have identified sufficient land to build about 360 000 units, the distribution of public housing production in the coming decade will be uneven. Only about one-third of the units will be completed during the first five-year period (from 2023‑24 to 2027‑28), while the remaining two-thirds will be completed in the second five-year period (from 2028‑29 to 2032‑33). The waiting time for public rental housing (PRH) is thus very long.

62. We must overcome constraints to create supply and address short-term public housing shortage, and ensure a steady private housing supply at the same time. We will enhance quantity, speed, efficiency, and quality in land production, staying on top of things and putting in place a long-term plan to steadily increase supply.

Key Strategies and Targets

63. The Steering Committee on Land and Housing Supply and the Task Force on Public Housing Projects, chaired by the Financial Secretary and the Deputy Financial Secretary respectively, have submitted to me the first 100-day reports. After considering the proposals in the two reports, I have decided to set the following key strategies and targets:

(i) introduce the new Light Public Housing (LPH), with about 30 000 units to be built in the coming five years;

(ii) increase the overall public housing production substantially by about 50% in the coming five years (from 2023-24 to 2027-28) as compared to the previous five‑year period (from 2022-23 to 2026-27), taking into account LPH and traditional PRH;

(iii) cap the waiting time for PRH immediately. Taking into account the total supply of LPH and traditional PRH, the target is to cap the waiting time at the existing level of about 6 years and shorten it to about 4.5 years in four years’ time (i.e. in 2026-27);

(iv) set a minimum size for newly-built flats. The saleable area of all subsidised sale flats completed from 2026-27 onward will be no less than 26 square metres in general, and the internal floor area of all newly-built PRH units (except for single-person and two-person units) will be no less than the equivalent threshold level in general (Note);

(v) deliver sufficient land for private housing development in the next five years to meet the projected demand in the LTHS and stabilise supply for private housing;

(vi) compress land production procedures such that the time required for turning "primitive land" into "spade-ready sites" can be reduced by around one-third to half;

(vii) make use of market forces by enhancing public-private partnership. A pilot scheme will be introduced to encourage the participation of private developers in building subsidised sale flats; and

(viii) expedite land production, build up a land reserve in the long run, and assume a leading role in land supply, so that the Government will stay on top of things instead of catching up with the demand.

Housing: Enhancing Quantity, Speed, Efficiency and Quality

Public Housing Supply

64. We will work closely with the Hong Kong Housing Authority (HKHA) and the Hong Kong Housing Society (HKHS) to increase public housing supply in the first five-year period by enhancing quantity, speed, efficiency and quality, thereby shortening the waiting time for PRH. We will:

(i) introduce the new LPH – The Government will make use of government and private land with no development plan in the near future, and adopt standardised simple design and the MiC approach to build LPH units expeditiously. About 30 000 units will be completed in five years, increasing the overall public housing supply by about 25%. Those on the waiting list for traditional PRH for three years or more may apply for LPH for earlier allocation of units, and priority will be given to family applicants. Tenants may retain their position in the queue for traditional PRH and can move into traditional PRH later on. LPH units will be provided with basic facilities of traditional PRH units. The rent of LPH will be lower than traditional PRH in the same district. We will seek LegCo's approval for dedicated funding to build and operate LPH. At the same time, we will continue to provide about 20 000 transitional housing units through partnership with the community.

Taking into account the some 30 000 LPH units, overall public housing production will increase to around 158 000 units in the next five years (from 2023-24 to 2027-28), including the 12 000 PRH units provided under the PRH Advance Allocation Scheme (refer to item (ii) below for details). This represents a significant increase of some 50% compared to 105 000 units in the previous five-year period (from 2022-23 to 2026-27).

We will introduce a new index of Composite Waiting Time for Subsidised Rental Housing to reflect applicants' composite waiting time for both traditional PRH and LPH. On the basis that the number of newly registered applicants and the quantity of recovered PRH units will remain unchanged at the current level, the target is to reduce the Composite Waiting Time for Subsidised Rental Housing from 6 years to about 4.5 years in four years' time (i.e. in 2026-27);

(ii) implement the PRH Advance Allocation Scheme – The Government will adopt a phased approach to expedite the completion of some PRH units. It is expected that about 12 000 units will be available in next five years for advance allocation of about 3 to 18 months;

(iii) enhance speed by adopting the MiC approach – We suggest that the HKHA require all public housing projects scheduled for completion in the first five-year period to adopt the Design for Manufacture and Assembly (DfMA) approach, with the adoption of the MiC approach in suitable projects. In the second five-year period, no less than 50% of the projects will adopt the MiC approach. HKHS will also adopt the MiC approach in more public housing projects;
(iv) enhance public-private partnership – We will introduce a new Pilot Scheme on Private Developer Participation in Subsidised Housing Development. From the next financial year, three sites will be put up for tender in batches for developers to build subsidised sale flats which will be sold to eligible persons at a specified discount rate from the market price. Under the pilot scheme, developers are also encouraged to apply for rezoning of their own private land for subsidised sale flat development; and

(v) accelerate housing production by adopting the "Design and Build" model – We suggest that the HKHA require at least half of the flats scheduled for completion in the second five-year period to adopt the "Design and Build" contract model for construction to enhance speed, efficiency and quality.

65. To enhance quality, we will provide better public space, facilities and estate environment for public housing residents. The Secretary for Housing will chair an action group to develop "Well-Being" design guidelines for new public housing projects. We also suggest that the HKHA select five existing PRH estates as pilot projects for phased study and implementation of enhancement measures within five years, with a view to creating a living environment with a greater sense of well-being.

Private Housing Supply

66. Based on the latest projection in the LTHS, the demand for private housing in the next 10 years will be 129 000 units. We will work to achieve this basic target and get sufficient land ready for providing no less than 72 000 residential units in the next five years. Such land may be put forward for land sale or railway property developments. Together with the development projects of the Urban Renewal Authority and other private development projects, the overall supply will exceed projected demand.

67. On building the housing ladder, in addition to stabilising the supply of private housing, the Government will make available subsidised sale flats such as those under the Home Ownership Scheme, Green Form Subsidised Home Ownership Scheme and Starter Homes for Hong Kong Residents (Starter Homes) projects to meet the home ownership aspirations of the public.

Note: The internal floor area of newly-built PRH units (except for single‑person and two‑person units) will be no less than 21 square metres, which is roughly equivalent to the threshold level for subsidised sale flats of no less than 26 square metres in saleable area.

(To be continued.)

Ends/Wednesday, October 19, 2022
Issued at HKT 12:27