New World Development

'Convert factories into flats for poor'

PUBLISHED : Tuesday, 26 June, 2012, 12:00am
UPDATED : Tuesday, 26 June, 2012, 12:00am

Property tycoon Henry Cheng Kar-shun - the only business representative on a new poverty task force - says developers could help solve housing problems by converting disused factory buildings into interim homes for people on the long waiting list for public housing.

This would enable developers to earn income from buildings that now lie idle while helping the government meet housing needs, he said.

Cheng, appointed by incoming chief executive Leung Chun-ying to help revive the scrapped Commission on Poverty, told the South China Morning Post: 'I have always wanted to narrow the wealth gap and to take a share of social responsibility.

'To help people lead a comfortable, stable life will bring about social harmony.'

Cheng - a late-joining supporter of Leung who took over from his father Cheng Yu-tung as chairman of New World Development Company earlier this year - was named last week as a member of the Preparatory Task Force on the Commission on Poverty, chaired by Leung.

He denied that helping the poor was an abrupt change for him, saying that he had made donations and sponsored charity projects over the years but had kept a low profile while doing so.

A visit to subdivided flats and cage homes in Sham Shui Po a few months ago had deepened his determination to take action, he said. He recalled four people crammed into a 50 sq ft flat. 'I saw there was such a huge gap in the living conditions of different people,' he said.

The revived Poverty Commission, which will advise on government policy, would be better than the current Community Care Fund, which he said provided 'piecemeal' solutions. The task force should work on several areas including housing, welfare and plans to improve social facilities in neighbourhoods, he said.

Under his suggested housing policy, developers could use their own resources to convert disused industrial buildings into flats, then rent the properties to the government, say on a 20-year-lease. The government would then allocate flats to those waiting for rental homes.

'But you cannot make businesses subsidise the government. You need ... incentives,' Cheng said. 'If they spend HK$10 million [on conversion of disused factories] and then earn hundreds of thousands of dollars in rental income, it is better than having no income at all.'

He stressed that his company held almost no industrial buildings and would not profit from the idea.

His group, New World, would be ready to provide more fare concessions for its bus and ferry services 'as long as it is within reason and does not affect shareholders' interests'.

Asked if he felt developers were to blame for creating a 'property hegemony', Cheng said the government was responsible for holding back land sales in the past few years.

'The government is the biggest landlord but it handed the initiative for selling land to developers,' he said in a reference to the application list system, under which developers can trigger auctions by making initial bids for land on the list.

Oxfam and Chinese University researchers meanwhile have proposed two new subsidy schemes to help alleviate poverty.

The two proposals are a modified version of the government's work incentive transport subsidy scheme - which awards with HK$600 a month - and a child or working income tax credit system.