Investors shunned in old flats scheme

PUBLISHED : Tuesday, 26 July, 2011, 12:00am
UPDATED : Tuesday, 26 July, 2011, 12:00am


A pilot scheme that encourages flat owners in dilapidated buildings to invite the Urban Renewal Authority to redevelop the block will exclude buildings that have been dominated by investors or developers.

Flat owners evicting tenants in the hope of getting more compensation will not be entertained either.

Launching the scheme yesterday, executive director of the authority Iris Tam Siu-ying said the objective was to help small individual home owners living in buildings that were in multiple ownership.

'If a well-established company wants to sell on its properties to the URA just because it had made a wrong investment decision, we don't consider this a project worth our help,' Tam said.

But if a company looking for redevelopment opportunities had bought only about 10 per cent of ownerships, the remaining owners could still approach the URA if they had a two-thirds majority, she added.

Tam was explaining the additional vetting considerations of the so-called 'demand-led' scheme, which was announced earlier this year and accepts applications from today until October 31.

The pilot, covering only one or two projects this year, has drawn keen interest because many flat owners would prefer the URA to some private real estate agencies, which have been criticised for using dubious pressure tactics in persuading owners to sell.

Applications will be judged on building conditions and the urban planning benefits of a scheme to the local area, rather than profitability.

Another new consideration added to the application form is whether there is 'an abnormal spate of tenant eviction'.

Tam said: 'We don't wish to see flat owners chasing out their tenants. If this happens in the application process, we may consider turning the case down.'

In past URA projects some flat owners chased out their tenants and arranged for friends and relatives to move in, because only the last tenants before redevelopment are eligible for compensation.

Flat owners in Chun Tin Street, next to the URA's redevelopment of the collapsed tenement in Ma Tau Wai Road, To Kwa Wan, are prepared to make an application, according to district councillor Yam Kwok-tung.

But Yeung Chi-kan, a homeowner in the nearby 'Thirteen Streets' on the fringe of the former Kai Tak Airport, said he did not have high hopes for the scheme. The site of his block is smaller than the required minimum size of 400 square metres and it has been difficult to get a two-thirds majority from his neighbours, many of whom are out of reach after renting out the flats, he said.

Meanwhile, the authority said it was working out the financing arrangements for the Queen's Cube development in Wan Chai with co-developer Nam Fung Group. Nam Fung decided to buy the URA's share in the 96-flat development and may lower the sale price, after selling only nine flats in the past year.