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LCQ 6: Allocation mechanism for public rental housing
     Following is a question by the Hon Lau Kwok-fan and a reply by the Secretary for Housing, Ms Winnie Ho, in the Legislative Council today (December 14):

     Public rental housing ("PRH") flats available for selection by PRH applicants are currently divided into four districts, namely Urban, Extended Urban, New Territories, and Islands. PRH flats are allocated by random computer batching in accordance with established criteria, and eligible applicants are entitled to three flat offers. I have received requests for assistance from quite a number of PRH applicants. For instance, some Tuen Mun residents were allocated flats in Queen's Hill Estate in the North District, while some North District residents were allocated flats in Ching Tin Estate in Tuen Mun. As the flats allocated were far away from their original living circles and would entail cross-district employment or schooling, some applicants turned down the housing offer and rather wait for another allocation. There are views that the aforesaid situation has slowed down the turnover of PRH flats. In this connection, will the Government inform this Council:

(1) of the respective numbers and percentages of PRH applicants who accepted the first, the second and the third flat allocation in the past five years; after an applicant had turned down an allocation, the average waiting time for the applicant to be given another allocation;

(2) whether it has plans to re-delineate the four districts available for selection by PRH applicants, e.g. by dividing New Territories into New Territories East and New Territories West, or by subdividing this district into Tuen Mun, Yuen Long, Tin Shui Wai, Sheung Shui, Fanling and Tai Po, so that allocation of PRH flats will be more targeted and PRH waiting time for members of the public will be shortened; if so, of the details; if not, the reasons for that; and

(3) whether it has considered ways to enhance the allocation mechanism for PRH flats, e.g. by using new technologies such as big data and artificial intelligence for arranging applicants to be allocated PRH flats within their original districts as far as possible, or by establishing a mechanism for exchanging PRH flats allocated to allow room for flat swapping among PRH applicants, thereby speeding up the turnover of PRH flats; if so, of the details; if not, the reasons for that?


     The Hong Kong Housing Authority (HA) has been expediting the allocation process and the turnover of public rental housing (PRH) flats in order to facilitate early intake of PRH by applicants through implementing enhancement measures and upgrading of computer systems. Although the number of PRH applications far exceeds the supply of PRH flats, considering that each applicant has different demand for PRH flats, the HA would give each eligible applicant a maximum of three housing offers. Applicants may decide whether to accept the offers in accordance with their individual preferences and circumstances. Such arrangement has struck a balance among applicants' demand for PRH flats, tight supply of PRH flats and the large number of PRH applicants. Regarding the question raised by the Hon Lau Kwok-fan, my reply is as follows:
     Allocation of PRH flats is an ongoing process. If an applicant is eligible for a further housing offer upon refusal of an offer, his/her application will be placed on the waiting queue again according to the order of the registration date of his/her application, pending the next offer.
     In the past five years (i.e. 2017/18 to 2021/22), on average around 47 per cent of general applicants accepted the first offer, around 27 per cent accepted the second offer and around 26 per cent accepted the third offer. The duration of waiting time between each offer varies. Depending on the PRH resources available in various districts and the priority status of the applicants concerned, the duration ranges from a few weeks to a few months. If a flat is not accepted by an applicant, we will immediately allocate it to another applicant. Therefore, the interval between allocations will not increase the average waiting time for PRH.
     In view of the supply and demand situation as well as the distribution of PRH flats, the HA had, on several occasions, reviewed and regrouped the geographical districts to speed up the allocation of suitable flats to applicants. Due to the uneven geographical distribution of PRH flat supply, the waiting time for different districts varies significantly. The smaller the district boundary, the more difficult it is to successfully allocate the flats. In this connection, the HA consolidated the number of PRH districts from 14 to eight in 1993, thereby enabling a decrease in the number of PRH applications with waiting time of seven years or more from 13 679 in 1993 to 5 709 in 1998, representing a major reduction of 58 per cent. This showed that reducing the number of districts could expedite the allocation process and enable early allocation of suitable flats to applicants.
     In tandem with urban development, the public transport links between districts have improved and travelling time between districts reduced significantly. To shorten the prolonged waiting time resulting from PRH applicants all choosing the more popular districts, the HA further reduced the number of PRH districts from eight to four in November 1998 to expedite flat allocation.
     We believe that the prevailing arrangement with four districts can optimise the effective management of the waiting queue, while the distribution of unit supply across districts can be more even, and avoid a large number of applicants from queuing up in certain districts. Based on past experience, the availability of PRH flats for allocation is subject to the supply of a district. Further demarcation of the districts will undermine the flexibility of the allocation process, which in turn will substantially lengthen the waiting time for applicants.
     In order to enable early intake for PRH applicants and expedite the turnover of PRH flats, the HA will further enhance the allocation mechanism by advancing the Modified Advance Allocation Scheme for new PRH estates. Flats will be allocated to PRH applicants six months before the Occupation Permit (OP) is issued, as compared with the existing practice of allocating flats from about three months before the issue of OP. If an applicant refuses the advance housing offer, the HA will immediately make an advance housing offer of that flat to another applicant. This enables an early completion of the allocation process prior to the intake of new flats and facilitate early allocation of flats to PRH applicants. Once the new flats are issued with OPs, all applicants who have accepted the advance housing offer can complete the intake formalities immediately, thereby enabling early intake of PRH flats by the applicants.

     We will continue to explore whether we can adopt various arrangements or new technologies to help enhance allocation efficiency. We appreciate the preference of PRH applicants for in-situ allocation of flats. However, in view of the uneven supply of PRH flats among districts, it will be difficult to cater for the requests of all applicants.
     The HA introduced the Mutual Exchange Scheme (MES) in 1976, under which PRH tenants could exchange accommodation with other tenants. Applicants were matched against each other based on their household size, choice of estates, flat size, date of registration, etc. As at 2002/03, the cumulative number of successfully exchanged cases accounted for merely about 8 per cent of the total number of registrations. Owing to the low success rate, the MES was terminated by the HA in early 2006.
     In implementing the above MES, the HA noticed that applicants had similar preferences for PRH flats. They include better locations, newer flats, larger flat size, more desirable floor levels and orientation, as well as better estate environments and facilities, etc. Successful matching was not easy. Also, the mutual exchange of flats will not expedite the turnover of PRH.
     The HA will continue to closely monitor the overall demand and supply of PRH resources, and keep in view if there is any room for adjustment to the district demarcation or making use of different technologies to enhance the allocation process, with a view to improving the turnover efficiency of PRH flats.

     Thank you, President.
Ends/Wednesday, December 14, 2022
Issued at HKT 17:30
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