LCQ18: Supply of residential units and sites for residential developments

Following is a question by the Hon Tanya Chan and a written reply by the Secretary for Development, Mr Michael Wong, in the Legislative Council today (November 29):

Question:
 
Regarding the supply of residential units and sites for residential developments in Hong Kong, will the Government inform this Council:
 
(1) of the respective numbers of units of (i) public rental housing (PRH), (ii) subsidised sale housing and (iii) private residential developments, which were completed in each of the past five financial years and which are expected to be completed in the current and each of the next four financial years (set out in Table 1 and Table 2); whether it knows the respective numbers of vacant units of those three categories of residential units at present;

Table 1

(2) in respect of each of the 210 sites which the Government has identified as having housing development potential, of (i) its area, (ii) its existing use, (iii) the latest progress of amending the relevant statutory plan, and (iv) whether the new use proposed for it is (a) the development of subsidised housing (including PRH, as well as the Home Ownership Scheme, the Green Form Subsidised Home Ownership Scheme and the "Starter Homes" Scheme for Hong Kong Residents) or (b) private residential developments (set out in Table 3 by location of each site);

Table 3

(7) of (i) the amount of funds injected/to be injected by the Government into the Housing Reserve (the Reserve), and (ii) the actual/estimated expenditure involved in managing the Reserve (including the expenditure items), each year since its establishment in 2014 and in the current and each of the next four financial years (set out in Table 9 and Table 10); the latest arrangements regarding the Government using the Reserve for supporting HA to develop public housing, and its plan on allocation of funds from the Reserve to HA in the coming decade; and
          
Table 9

(8) whether it has plans to introduce additional categories of subsidised housing, including re-launching the Sandwich Class Housing Scheme; if so, of the details; if not, the reasons for that?

Reply:
 
President,
 
Having consulted the Transport and Housing Bureau, my reply to various parts of the question is as follows:
 
(1) In the past five years, the number of completed public rental housing (PRH) units, subsidised sale flats (SSFs) and private residential units is as follows:

Public Housing (Note 1)

Note 1: Figures include the completed PRH units and SSFs under the Hong Kong Housing Authority (HA) and the Hong Kong Housing Society (HKHS), but do not include the 322 SSFs provided by the Urban Renewal Authority on a one-off basis in 2015/16.

Private Residential Units (Note 2)

Note 2: On private residential units, the Rating and Valuation Department (RVD) publishes the above figures in calendar year on a regular basis.  According to the "Hong Kong Property Review 2017" published by the RVD in April 2017, private residential unit is defined as independent dwellings with separate cooking facilities and bathroom (and/or lavatory). It does not include village houses, rental estates built by HA and HKHS, units sold under the Tenants Purchase Scheme, SSFs and Government-owned quarters.

The estimated number of PRH units, SSFs and private residential units to be completed in future years is as follows:

Public Housing (Note 3)

Note 4: On private housing, the RVD publishes the above figures in calendar year on a regular basis. The Government has not compiled annual statistics of forecast completion figures for private residential units in 2019 and beyond. According to the "Hong Kong Property Review 2017" published by the RVD in April 2017, private residential unit is defined as independent dwellings with separate cooking facilities and bathroom (and/or lavatory). It does not include village houses, rental estates built by HA and HKHS, units sold under the Tenants Purchase Scheme, SSFs and Government-owned quarters.

As at end-September 2017, the number of vacant lettable PRH flats under the HA was about 3 700 and the vacancy rate (Note 5) was around 0.5%. HA does not have information on the number of vacant SSFs.

Note 5: Vacancy rate refers to the percentage of "lettable vacant flats" (excluding those flats which have been offered for PRH applicants' consideration and are expected to be let out in the short term) out of the total lettable PRH stock.
 
At the third quarter of 2017, there were 230 vacant lettable PRH units (Note 6) under the HKHS. HKHS does not have information on the number of vacant SSFs.

Note 6: Lettable vacant units exclude units that have been offered for applicants' consideration and are expected to be let out in the short term.
 
According to the "Hong Kong Property Review 2017", there were 43 657 vacant private residential units as at end-2016, accounting for around 3.8% of the total stock in 2016.
 
(2) The information of the some 210 sites with housing development potential are set out at Annex. For the sites already zoned or rezoned for housing development, the relevant information including land area and flat number are set out in the relevant public documents of the Town Planning Board (TPB) (for details, please visit TPB's website: www.info.gov.hk/tpb/index.html). As at early November 2017, among the some 210 sites, 103 had been zoned or rezoned for housing development, estimated to provide a total of about 122 200 flats (including about 74 900 public housing flats and about 47 300 private housing flats). Another 41 sites have their statutory rezoning procedures initiated, and subject to completion of the rezoning, these sites are estimated to provide a total of about 74 100 flats (including about 69 100 public housing flats and about 5 000 private housing flats). As for the remaining sites, pending the completion of technical studies, we will consult the District Councils and relevant stakeholders on the rezoning proposals setting out the relevant development details including land area and flat number, in accordance with the established procedures prior to submitting the proposals for TPB's consideration.
 
(3) As at mid-November 2017, information on sites granted by way of short-term tenancy (STT) is as follows:

Note 7: Including an STT let to the Airport Authority Hong Kong for land formation and related works of the Three-Runway System (1 640 ha) and an STT let to the Kadoorie Farm and Botanic Garden for water conservation and agricultural use (55 ha).
 
As indicated in previously promulgated information, sites granted by STT are used to support various different uses, including mainly works areas/sites required for public rental housing/Home Ownership Scheme/railway development projects/the airport Three-Runway System/public utilities, religious/community/other non-profit making uses, and open storage, container storage and temporary fee-paying carparks.  Regarding the STT sites granted for works areas/works sites for long-term development uses, upon completion of the construction works, a land lease for the long-term development use will be granted by the Lands Department, and the sites for infrastructure uses will then be handed over to the responsible organisations or departments for management and operation of the facilities concerned. In other words, these STTs were in fact issued as a transitional arrangement so that works can commence to implement the long-term development uses of the sites. Moreover, not all land is suitable for housing development.
 
There is no so-called "idle residential land" at present. If according to land use review results certain sites are identified to be suitable for housing development, we will handle these sites with priority, e.g. carrying out rezoning or incorporating them in new development area projects, in order to release their housing development potential. If these sites cannot be developed into housing development within a short timeframe due to various factors such as the time required for technical studies, statutory procedures, resumption and clearance or infrastructure works, we will continue to arrange to put these sites to temporary use through STT or temporary government land allocation.
 
(4) and (5) It is the Government's general practice to compile and announce the annual Land Sale Programme before the commencement of a financial year. When compiling Land Sale Programmes, the Government takes into account various factors, including the private housing supply target of the Government, market conditions, progress of various procedures required (such as termination of STTs, infrastructure works, amendments to outline zoning plans, etc.), size and location of sites, estimated flat numbers that could be produced by the sites, projections on other sources of private housing supply, etc. Through the annual Land Sale Programme, we set out the relevant basic site information in advance, which provides the market with transparency of land supply and facilitates the necessary preparations by the market.
 
Subsequently, the Government then announces quarterly Land Sale Programmes, mainly taking into account the latest market conditions, the progress of readying the relevant sites, latest situation of overall supply, etc.

After purchasing a residential site through government land sale or completing lease modification for residential development, the developer is required to complete the construction of a minimum gross floor area specified in the conditions of sale or the conditions of the lease modification, and obtain an occupation permit from the Building Authority within the Building Covenant (BC) period specified under the conditions. In general, the BC period for residential developments varies from 48 to 72 months. The Government sets an appropriate BC period for each development project by taking into account the actual circumstances of each project, including relevant factors such as its development scale and complexity.
 
(6) For the past five years, the actual surplus and closing cash and investment balance for HA are as follows:

Note 8: After deduction of construction expenditure.

Based on the 2016/17 to 2020/21 budgets and forecasts endorsed by HA in January 2017, the projected Surplus and Closing Cash and Investment Balance for the coming years are as follows:

(7) The Housing Reserve and its accumulated investment return will be used to support the public housing development programme and related infrastructure. The Government set aside $27 billion and $45 billion for the Housing Reserve in 2014/15 and 2015/16 respectively. The two injections and the interest accrued measure a total of about $77 billion. The Government has no plan for further injection to the Housing Reserve at the moment.
 
There is no imminent need for the HA to request Government's injection at this stage. When the Government and HA have reached consensus on the quantum and timing of funding injection, the Government will seek approval from the Finance Committee of Legislative Council at an appropriate time for funding to be drawn from the Housing Reserve to support HA’s public housing development programmes. The Government has yet to incur or plan to incur any expenditure involved in the management of the Housing Reserve.
 
(8) SSFs have been an important rung of the housing ladder. The 2017 Policy Address has put forth a series of measures to strive to build a housing ladder. Apart from the continued support to HA and HKHS' SSFs projects including Home Ownership Scheme (HOS) projects, the Government proposes that HA regularise the Green Form Subsidised Home Ownership Scheme (Note 9) and the Interim Scheme to Extend the HOS Secondary Market to White Form Puyers (Note 10), in order to assist low to middle-income families to move up the housing ladder. In addition, the Government will introduce the "Starter Homes" Pilot Scheme, with a view to re-igniting the hopes of families with higher income of owning a home in the face of hiking property prices. Details of the Pilot Scheme will be finalised for announcement in mid-2018.
 
Note 9: To further assist Green Formers (mainly current PRH tenants) to achieve home ownership and improve the housing ladder, HA introduced the Green Form Subsidised Home Ownership Scheme in 2016. Suitable flats among PRH developments under construction are identified for sale to Green Formers in the form of a pilot scheme, with prices lower than those of HOS flats.

Note 10: In response to the home ownership aspirations of low to middle-income families, HA introduced two rounds of Interim Scheme in 2013 and 2015 respectively to allow White Formers to purchase SSFs with premium unpaid in the HOS Secondary Market.

Ends/Wednesday, November 29, 2017
Issued at HKT 18:33

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• LCQ18 Annex