Residents offered flat-for-flat compensation at the Pak Tai Street redevelopment project will have to opt for a new but smaller apartment, details unveiled yesterday by the Urban Renewal Authority (URA) show.
Two-thirds of flats being built by the authority on the Ma Tau Kok site and at Kai Tak would be cheap enough to be covered by owners' cash compensation; some owners might have cash left over.
Owner-occupiers choosing a larger flat on one of the higher levels would have to pay an additional HK$370,000 to HK$1.3 million, according to the valuation commissioned by the authority for its first flat-for-flat project.
However, while most of the existing flats in the Pak Tai Street project are about 620 sq ft in saleable area, most flats made available by the authority in Kai Tak and the existing site will be smaller. The sizes range from 248 sq ft to 669 sq ft.
The smaller size and the modest design allow the authority's flats to be more affordable than other developers'. But owners will have to find temporary housing until their flats are ready. The Kai Tak flats should become available by 2016 and those at Pak Tai Street by 2018.
'The no-frills flats will not have extravagant clubhouse facilities or a huge lobby designed with expensive materials,' William Wan, the authority's property and land director, said.
Wan said the value of the flats was assessed by two independent surveying firms. The valuation took account of the prices at new developments nearby, including The Latitude, Prince Ritz and Grand Waterfront, but also the lack of facilities and cheaper construction materials used in the project's flats, which led to reductions of 2 to 8 per cent.
While residents selling their flat to the authority will receive compensation of HK$8,939 per square foot of saleable area, the no-frills flats are priced between HK$9,003 and HK10,358 per square foot.
The owner of an existing flat with 626 sq ft of saleable area will save more than HK$1 million if he or she chooses to buy a 465 sq ft flat in Kai Tak, the authority's figures show.
It said the 40 owner-occupiers will be given 60 days to consider the offer. They will be able to choose from 50 flats in Kai Tak and 49 flats at the existing site.
Mrs Ma, 80, who bought her flat in the 1970s, said she would opt for cash instead of a smaller flat, as she has a family of 10. 'The new flat would be too small for my family,' she said. 'I'd rather live with my son and daughter-in-law' as she now does.
Kowloon City district councillor Wong Yun-cheong, said the prices announced yesterday would calm residents' fears that they would have to pay more to get a new flat.
But he said the option was still unattractive to most owner-occupiers, who are elderly. 'They would rather take the cash and buy an old flat in the same area. This is their home, and they just want to stay.'
The government has advocated the building of such flats since 2010 in a bid to curb property prices. Developers must build no-frills flats in some projects tendered by the government. Both the authority and the Housing Society pledged to supply more modestly designed flats, but no clear definition has been given.
URA chief Iris Tam Siu-ying said the authority had conducted a poll to gauge residents' views on the design of no-frills flats. Advice from the Hong Kong Institute of Architects was also sought.
'In Kai Tak, we won't have special units with extravagant renovations on the top floor. Instead, there will be open space and a few facilities there so that more residents can enjoy the view,' Tam said.
According to the design, the development facing the plaza in front of Kai Tak MTR Station will comprise three high-rises of 21 to 22 storeys and a low-rise of five storeys. The top floor and rooftop of the three buildings will be connected and will feature a garden, and facilities such as a library and sports room.
The low-rise flats are designed for elderly people, with bigger kitchens and showers instead of baths. Modest yet durable materials will be used and the smaller flats will not have balconies. Only three-bedroom flats will have two bathrooms.
The area will have 30 per cent green coverage, and living rooms and lift lobbies will have windows.
They would rather take the cash and buy an old flat in the same area.