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Hong Kong housing

Hong Kong MTR to explore ‘social responsibility’ of building public housing on top of new stations

MTR Corp to discuss idea with the government in move that would be seen as corporate social responsibility for firm that typically profits from luxury property projects at new sites

PUBLISHED : Tuesday, 05 June, 2018, 8:03am
UPDATED : Tuesday, 05 June, 2018, 3:25pm

Hong Kong’s railway operator is expected to discuss the idea of building public housing when developing property atop its stations with the government, in what would be a first for the city as it seeks to provide more affordable flats.

Multiple sources told the Post the government would ask the MTR Corporation to explore the option, which would be cast as a “social responsibility” for the company, which traditionally reaps profits from luxury property projects at its new stations.

Two possible sites on the radar are Siu Ho Wan depot in northern Lantau, and a public site near Tuen Mun town centre, originally expected to produce a total of 22,000 private flats in the medium to long term.

The Development Bureau and the Transport and Housing Bureau would hold negotiations with the MTR Corp to decide the financial viability and the right mix of public and private housing, two sources familiar with the situation said.

“The MTR Corp is open to the government’s proposal; it would be the government’s call,” one source said. “It can be considered as long as the number of private flats allowed can cover the costs of the railway projects.”

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The revelation comes as the government’s task force on land supply is consulting the public on options to identify sites to build more affordable homes and boost new economies.

Public housing would be uncharted territory for the MTR, which, as a listed company with global operations, has been maximising its profits by fully utilising its station sites for building private luxury flats.

“It can be seen as a social responsibility,” the source said.

The MTR announced earlier that the 30-hectare Siu Ho Wan Depot would accommodate at least 14,000 private flats, with the first phase to be completed in 2026. A public consultation on the draft Siu Ho Wan outline zoning plan ended last Tuesday.

The sources also revealed the MTR had proposed to build an additional station with a residential development of about 8,000 flats along the Tuen Mun South Extension, which will be up for public consultation this year.

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The proposal was submitted to the Transport and Housing Bureau in December 2016, but the previous administration did not get far with it.

It involves a site named Area 16, facing the Tuen Mun River Channel, where a public swimming pool will have to be rebuilt in the new development and a future sports ground will have to be downsized.

According to the bureau’s Railway Development Strategy 2014, the extension – estimated to cost about HK$5.5 billion in 2013 prices – will provide direct access to the existing West Rail service by connecting the Tuen Mun station with the Tuen Mun South station near the ferry pier.

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The implementation window will be from 2019 to 2022, and the extension is expected to be complete by 2031.

The Development Bureau would not rule out the possibility of designating part of the Siu Ho Wan depot site to build public housing flats – both for rent and sale.

“The project development details, including housing mix, are subject to further detailed study,” a spokeswoman said.

It is not clear whether the government will ask the MTR to reserve part of its private-flat quota for public housing, or grant the corporation a smaller site for building private flats and leave the rest for the Housing Authority to handle.

“It would be subject to negotiation,” another source familiar with the situation said.

The depot in Siu Ho Wan was granted by the government to the MTR in 1995 for maintenance and a railway workshop. The MTR Corp would need to pay an extra land premium if private residential and commercial developments were envisaged.

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On the issue of the Tuen Mun South Extension proposal, the Transport and Housing Bureau said it was still being evaluated with relevant departments.

The MTR had been asked to provide further information to ensure the proposal would be practically feasible and bring maximum benefits to the community, a spokeswoman said.

Asked whether the residential proposal for Area 16 would include public housing, the bureau said it would take into account all relevant considerations when deciding the mode of property development along the alignment of new railway projects.

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Kaizer Lau Ping-cheung, an independent non-executive MTR Corp director and former member of the long-term housing strategy steering committee, said in principle he would not object if the railway giant could help the government speed up housing supply.

“But we have to make sure the extra role will not affect the corporation’s image in the investment community,” he said. “The board may endorse the idea only if the corporation is guaranteed some profits.”

Land supply task force chairman Stanley Wong Yuen-fai, who also chairs the subsidised housing committee of the Housing Authority, expected the proposals to help shorten the waiting time for public flats.

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“These sites are readily available … putting densely populated public estates on top of railways can also resolve traffic issues,” he said.

The waiting time for public housing in Hong Kong is at its highest in almost two decades, with families in the queue for more than five years.

The government also admitted it would not meet its target of building 280,000 public flats by 2027, meaning an expected shortfall of 43,000.

An MTR spokeswoman had nothing to add at this stage, saying the company would work with the government on future railway projects.