Bureau considers plan to hasten clearance of slums

PUBLISHED : Wednesday, 19 January, 2005, 12:00am
UPDATED : Wednesday, 19 January, 2005, 12:00am

The ownership threshold may be lowered to trigger compulsory sale of a building

Legislation could be relaxed to make it easier for private developers to acquire properties for redevelopment under a revised government plan to accelerate the clearance of city slums.

The Housing, Planning and Lands Bureau said it was considering lowering the ownership threshold to as little as 80 per cent from 90 per cent to trigger the compulsory sale of a property and expedite urban redevelopment.

In his policy address last week, Chief Executive Tung Chee-hwa highlighted the growing problem of urban decay and set out a four-pronged strategy to curb it - redevelopment, rehabilitation, revital- isation and preservation.

Mr Tung also said last week the Housing Society would allocate $3billion over the next 10 years to help flat owners maintain their ageing blocks.

'To expedite urban renewal, we are now working on a comprehensive review of the urban regeneration policy, including a review of the urban renewal strategy and an examination of ways to facilitate private sector participation in urban renewal work,' the Housing, Planning and Lands Bureau said.

'One focus of our study ... is to consider the specification of certain classes of lots for a lower compulsory sale threshold of up to 80 per cent under the Land [Compulsory Sale for Redevelopment] Ordinance,' the bureau said.

A bureau spokeswoman said a study was under way and the government would consider various options.

The land-assembly process has been a major hurdle in urban renewal. The Land (Compulsory Sale for Redevelopment) Ordinance, enacted in 1998, allows a developer who has secured 90 per cent ownership of a property to buy the rest.

The Real Estate Developers Association (Reda) has long wanted the law to be amended, saying the 90 per cent level is a major hurdle to land assembly.

According to Reda, the ordinance is difficult to apply and only two applications have been successful: the Melbourne Industrial Building by Swire Properties and the Garley Building in Jordan.

Knight Frank valuation director Anthony Lau Chun-kuen supported the lowering of the compulsory sale threshold.

'Multi-ownership problems in which a developer has to deal with individual owners one by one to buy their properties can be a major deterrent. In some low-rise, pre-war blocks where you have only five or six owners in a lot, acquiring 90 per cent ownership shares can be a mission impossible. If developers can acquire properties more easily, it will certainly help speed up urban redevelopment,' Mr Lau said.

Mr Lau also urged the government to allow the Housing Society to play a bigger role in relocating residents affected by redevelopment.

Jones Lang LaSalle regional director Lau Chun-kong said the Housing Society's support would be important.

'Urban renewal is not only about knocking down buildings. It is also about maintaining old buildings. The government may also take this opportunity to redefine the roles of the Housing Society and Urban Renewal Authority so the society could do more about rehabilitation while the authority focuses more on redevelopment.'

But he said the $3 billion earmarked for the next 10 years was too little.

A society supervisory board member said the sum might sound inadequate.

'Let's see how it works first and we might review it after two years. It is possible that bigger loans can be granted.'

According to initial ideas by the society, interest-free loans will be offered to homeowners to carry out repair or maintenance work. There will also be other incentive programmes to encourage the formation of owners' corporations and maintenance of old buildings.

It is hoped about 800 buildings will benefit from the scheme every year.

Secretary for Housing, Planning and Lands Michael Suen Ming-yeung said last week many property owners had accepted that they should be responsible for the maintenance of their properties.

A similar scheme by the Urban Renewal Authority was under way, but that only covered blocks in its projects.

'Not many property owners can benefit from [the Urban Renewal Authority] scheme, so we are considering pulling in the assistance of the Housing Society,' Mr Suen said.