Letters | How redevelopment of old Hong Kong buildings can be made fairer for minority owners

Readers discuss the importance of minority owners in buildings under consideration for redevelopment being well represented, and Hong Kong Science and Technology Parks Corporation’s supervision of tenants

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Pedestrians cross a street in Causeway Bay near a building subject to a compulsory sale on May 30. Photo: Nora Tam

Published: 11:30am, 10 Nov 2022

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Mike Rowse raised multiple issues in his column, “Redevelopment of Hong Kong’s older buildings must be handled fairly, or we risk social unrest” (October 23), the first being the unfair omission of the condition of the building for the law to apply. His concern is unnecessary, since during Lands Tribunal hearings under the Land (Compulsory Sale for Redevelopment) Ordinance (Cap 545), the developer must show that the building is dilapidated, and not economically viable for refurbishment.

Building surveyor and structural engineering reports are usually prepared and filed in the Lands Tribunal as part of the application for an order for sale.

Further, the condition of each unit being acquired should be reflected in its existing use valuation, prepared by independent valuers acting for the owner and developer. Two are vital, since values can vary enormously, in my years of experience as a surveyor. However, mutually beneficial acquisition terms can often be agreed, provided flat owners are well represented.

The other issues Rowse raised are more fundamental: what ownership ratio should trigger an acquisition, and what to do if the developer’s offers are rejected? Hong Kong desperately needs more housing, and the Urban Renewal Authority has limited funds.

The private sector has the funds, and expertise, to undertake the redevelopment of old housing stock. Lowering of ownership thresholds to trigger these sales, as proposed by the chief executive, is a sensible way to speed up the replacement of old tenements.

The compensation formula in the ordinance is not unreasonable – each owner obtains their full fair share of site value, which is usually well over existing use value. However, the process is complex, and needs seasoned professionals acting for minority owners to advise them, and protect their interests. That incurs costs, and here procedural improvements are necessary.