Bid to increase HK housing supply by making factory conversions easier

PUBLISHED : Saturday, 08 September, 2012, 12:00am
UPDATED : Saturday, 08 September, 2012, 2:50am


Related topics

The government will relax the building and town planning rules to make it possible to convert old private industrial buildings into "transitional accommodation" to help the housing supply.

These dwellings will be for rent and not for sale for at least 10 years.

Elaborating on one of the 10 short-term measures announced last week, Chief Secretary Carrie Lam Cheng Yuet-ngor said yesterday that an existing incentive scheme to encourage factory building owners to convert their properties into offices or hotels would be extended to cover a change to residential use.

"We are trying to clear the obstacles to turning factories into homes under the existing legislation. If it works, they can be turned into small homes, say of about 300 square feet each," Lam said after visiting a factory building in Kwai Hing.

Lam said the idea came from members of the Poverty Commission, which has been seeking ways to help those living in subdivided flats or cubicle homes.

One of the obstacles Lam referred to was Town Planning guidelines that do not allow residential use, except gpt hotels, on sites zoned as "other specified uses (business)", on which 700 industrial blocks now stand. A regulation under the Buildings Ordinance also prevents conversion because the plot ratio of an industrial block is usually higher than the maximum allowed for residential use.

After the rules have been changed, owners opting for conversion can benefit from an incentive scheme launched in 2010 that will exempt them from the land premium usually charged for a change of use.

The operator of the transitional accommodation will have to exercise central management of the property. While sales are not allowed, there is no control on the rents to be charged or who the flats can be let to.

"We are not using private property to provide subsidised housing. We have no plans to restrict the leasing target and rent level," Lam said.

She said it would take six to 12 months to get the amended rules past the Town Planning Board and Legislative Council.

Eddie Li Sau-hung, an industrialist who owns four factory buildings, said he found the transitional accommodation provision "not very attractive" compared to incentives for converting such properties into hotels.

"The initial capital for converting the block into homes is higher than that for a hotel, although a hotel will have a higher operational cost to provide services. I can only decide after making calculations," Li said.

He also said not all blocks could be efficiently reused as homes, because some blocks that stood between other buildings may not meet ventilation and natural-light requirements.

The CCL property index recorded by Centaline Property every Friday, again hit a record yesterday, at 107.99. It has been setting records for seven weeks.