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Urban planning

Enact law making Hong Kong property owners pay monthly fee to maintain ageing buildings, Urban Renewal Authority says

Plan aims to conserve resources in land-scarce city, but faces concerns over adding to burden of residents in world’s least affordable property market

PUBLISHED : Saturday, 08 September, 2018, 5:01pm
UPDATED : Saturday, 08 September, 2018, 10:59pm

A law should be introduced under which property owners must contribute monthly to a building maintenance fund to sustain Hong Kong’s ageing neighbourhoods, the head of the city’s Urban Renewal Authority has said.

In an interview with the Post, authority managing director Wai Chi-sing said the self-financing statutory body had been studying the feasibility of the arrangement, with a monthly owner fee of between HK$2,500 and HK$4,000 (US$500) for a project in To Kwa Wan.

The Ma Tau Wai Road development by the authority, expected to provide 493 flats around the end of the year, was originally planned to test the set-up of such a fund, Wai said. He has been leading the authority for more than two years.

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But Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor then announced the project would be the pilot in the “starter home” scheme for families who did not qualify for subsidised flats but were too poor to afford private homes. As a result, Wai said the authority would now look for another development to implement the fund.

“If Hong Kong has better building maintenance, steel and concrete structures can easily last up to more than 100 years,” Wai said. “But now we are demolishing buildings that are about 50 years old. From an environmental protection standpoint, we’re wasting a lot of resources.”

From an environmental protection standpoint, we’re wasting a lot of resources
Wai Chi-sing, Urban Renewal Authority

Wai believed the easiest way to introduce the fund would be through legislation, as has been done in other countries.

In Singapore, for example, the Building Control Act requires property owners to contribute to building maintenance, and a review is done regularly to assess if the amount is sufficient, Wai added.

He said in Japan, transparency was so high that potential property buyers could not only see flat prices but also how much they would need to pay to the maintenance funds.

Regarding worries that the fund could add to the financial burden of flat buyers in the world’s least affordable property market, Wai said the focus was on setting up a sustainable building maintenance system or else risk redevelopment falling behind the pace at which buildings aged.

He said the authority would submit to the government its study on the fund for further policy consideration.

There are about 30,000 buildings aged 50 years or older in Hong Kong, and the number is set to multiply over the next three years. A government planning study estimated that by 2046, there would be 326,000 flats aged 70 years or older.

Joe Lam Yat-ming, chairman of the owners’ committee of Sceneway Garden in Lam Tin, said the estate management had in the past discussed the possibility of setting up a maintenance fund several times, but eventually decided against it.

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He argued the benefit of a regular contribution was that owners would not need to chip in a hefty sum when major maintenance works came up.

But he noted owners were concerned that when they sold their properties they could not recoup their contributions, and that the money left in the fund might be misused. Lam suggested that the fund be put in low-risk investments for owners when not used for building works.