LCQ5: Gross floor area concessions

Following is a question by the Hon Kam Nai-wai and a reply by the Secretary for Development, Mrs Carrie Lam, in the Legislative Council today (November 11):

Question:

In recent years, the community is very concerned about the granting of gross floor area (GFA) concessions to developers in their property developments and the accuracy of the information (including the floor areas of the properties concerned, their transacted prices and the number of transactions) provided by the developers during the sale of properties.  In this connection, will the Government inform this Council:

(a) of the total number of private residential projects completed up to the end of 2008 since 2001, when the various GFA concession measures were introduced; in respect of each of these projects, the name, whether it is a single block project or a housing estate project, the total area of GFA concessions (commonly known as "inflated area") (including the exempted gross floor area, disregarded gross floor area and bonus gross floor area), the respective percentages of such area in the gross floor area of the project concerned and in the gross floor area set out in the land lease concerned, as well as the value of the total area of GFA concessions based on the average price of the projects in the year in which the project concerned was completed; the total area of GFA concessions granted during these eight years, and its respective percentages in the total gross floor area of all the projects concerned and in the total gross floor area set out in all the land leases concerned;

(b) of the breakdown of the area of GFA concessions in (a) by the source of land (i.e. sale of land by private treaty, acquisition of land through the Application List system and integration of sites by the developers themselves), and the impact of such area on the planning of public facilities by the authorities in the districts concerned; and

(c) how the Government verifies whether developers have released false transaction information for the purpose of creating the impression of a robust market by talking up property prices and sales, and how it ensures the flow of accurate information in the market to avoid the public being misled and housing demand affected as a result?

Reply:

President,

Since its establishment in July 2007, the Development Bureau has always been advocating the enhancement of transparency in implementing its policies, and endeavouring to strengthen the release of information to facilitate the community's understanding and monitoring of our work.  The arrangement to release systematically information on public facilities in private developments in the past one to two years is an example. Nevertheless, if certain information is not regularly collated and recorded by departments, we will be unable to provide such within a short period of time. Information regarding gross floor area (GFA) concessions of buildings granted pursuant to buildings regulations or relevant arrangements as enquired in the Hon Kam's question falls exactly under such category.

According to the current requirements of the Buildings Department (BD), Authorised Persons only have to specify on the building plans submitted to the Building Authority for approval the exempted areas of those facilities which are subject to a cap on GFA concessions (such as balconies, wider common corridors and lift lobbies, recreational facilities, etc) to facilitate audit check. The GFA of other facilities granted concessions after approval or for practical needs (such as car parks and plant rooms), however, need not be specified on the plans. The BD does not specifically maintain any statistics or a database of the various GFA concessions granted for building projects.

Under the aforesaid constraints and the limited time for preparing the response, I now reply to the three-part question as follows:

(a) The initiative on GFA concessions implemented since 2001 relates to green and innovative building design as stipulated in Joint Practice Notes (JPNs) No. 1 and 2. From 2001 to 2008, the BD issued a total of 1,670 occupation permits (OPs) for completed building projects. A breakdown for each year and the GFA involved are at Annex A.  During that period, a total of 216 completed building projects were granted with "exempted GFA" for their green and innovative building designs in accordance with JPNs No. 1 and 2.

As mentioned earlier, since the BD does not specifically maintain a database for various GFA concessions granted for building projects, it is impossible for us, within a short time, to provide a breakdown of the GFA concessions granted for individual projects mentioned above.  To collect and collate the relevant information, it is necessary to put in a great deal of time and manpower, including reviewing building plans, measuring and calculating technical parameters on approved building plans, etc. Furthermore, the estimated value of the total GFA concessions based on the average price of the projects in the year in which the project concerned was completed, as enquired by the Hon Kam, is not within the scope of building plans.

However, for the preparation of the review and public engagement exercise on the policy of GFA concessions, the BD conducted a sample study in 2006 on GFA concessions granted for building development projects the result of which, to a certain extent, dovetails with the information requested in the Hon Kam's question. Such information is at Annex B for reference. I hope it can answer the Hon Kam's question to a certain extent. Please note that there are two annexes in our reply and we have to use 20 pages to contain all the information.

In view of the public's concern over the subject of GFA concessions, the BD has decided to examine the issue in collaboration with the industry, and consider requiring Authorised Persons to specify the areas of various GFA concessions when submitting building plans in future so as to facilitate public inspection. Moreover, the Department will consider publicising information on GFA concessions granted for newly-constructed buildings regularly. For example, summary of information on the GFA concessions of such buildings will be publicised on the BD's website after the issuance of OPs.

(b) A total of 84 building projects issued with OPs were involved in the sample study mentioned in part (a). The types of land grant for such projects are set out at Annex B.

As regards the impact of GFA concessions on district planning, the Planning Department will, in carrying out its planning work such as reviewing the building height restrictions on an outline zoning plan (OZP) and assessing individual planning proposals, incorporate a series of assumptions in its estimate of the building height and bulk. Development restrictions set out on an OZP (e.g. plot ratio/GFA, building height and site coverage) and ancillary facilities for which GFA concessions may be granted (e.g. recreational facilities, car parks and plant rooms) will be taken into account. Separately, given the comparatively low impact of GFA concessions on population growth, it is rare that additional residential units will be created. The Planning Department therefore will not specifically assess the impact on the provision of public facilities resulting from GFA concessions.

(c) At present, under the Lands Department's Consent Scheme, developers are required to register the duly signed Agreements for Sale and Purchase of uncompleted first-hand residential properties in the Land Registry (LR) within one month from signing the Provisional Agreements for Sale and Purchase. Upon receipt of the agreement for sale and purchase for registration, the LR will, in the evening of the same day, input the particulars on the Memorial to its Integrated Registration Information System, compile the Memorial Day Book and update the Land Register concerned. The record of transaction concerned will be available for public inspection in the morning of the following day.

The Government is deeply concerned about some of the recent sales tactics in the first-hand residential market and the confusing market information. The Transport and Housing Bureau will examine feasible measures and explore with the Real Estate Developers Association of Hong Kong soon on possible means to further enhance the transparency of transactions of uncompleted first-hand residential properties and the clarity of property information.

Ends/Wednesday, November 11, 2009
Issued at HKT 17:56

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