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Carrie Lam's policy address 2018

Scheme aims to encourage owners of Hong Kong’s unused industrial buildings to turn them into temporary social housing

Chief Executive Carrie Lam revives scheme that was scrapped in 2016 because of lack of interest in bid to help Hongkongers living in cramped and squalid conditions

PUBLISHED : Wednesday, 10 October, 2018, 9:30pm
UPDATED : Wednesday, 10 October, 2018, 11:49pm

Owners of industrial buildings will be allowed to be convert their properties into temporary, social housing to help those living in cramped, squalid conditions, after Hong Kong’s leader revived a scheme to make better use of industrial space.

In her second policy address on Wednesday, Chief Executive Carrie Lam Cheng Yuet-ngor said that for the first time, owners who wished to convert their buildings for non-industrial use could use their properties for this purpose.

A government source said such temporary use would be limited to five year periods, and subject to further renewal. However, according to the policy address, only buildings not in industrial zones are eligible for the scheme, and those can be used partially, or wholly, for transitional housing.

Although Hong Kong has some 1,400 industrial buildings, Lam did not say on how many buildings would fit the criteria.

“The scheme provides more floor area to meet Hong Kong’s changing social and economic needs, and makes better use of our valuable land resources,” Lam’s policy report read.

The new initiative would be part of a reactivated industrial building revitalisation scheme, first introduced by Lam in April 2010, when she was still head of the Development Bureau.

It allowed the single owner of a whole industrial building, or 100 per cent of the building’s co-owners, to refurbish the building for other purposes without having to pay a hefty premium, or the difference in property value after conversion.

New social housing in Hong Kong will be modern, airy and all colours of the rainbow

The scheme was shelved in 2016 due to lacklustre response from the industry, and by then the government had only approved 124 applications, 110 of them wholesale conversions, and 14 of them for redevelopment of aged industrial buildings.

A need for transitional, social housing has emerged at a time when the city’s housing shortage, and sky-high property prices, have forced some 210,000 people to live in cramped, squalid conditions while waiting for public rental housing.

Last year, the Hong Kong Council of Social Service (HKCSS), with partial funding from the government, launched an affordable shared housing project aiming to supply 500 flats for 1,000 poor households over three years.

They used flats belonging to charitable landlords, and rented them out to needy families at below market rates. So far, 138 families are living in shared flats under the scheme.

Transitional housing is seen as one of the short-term solutions that could alleviate their burden, but the government has been criticised for leaving this mostly to NGOs.

According to the plan, the government will also adopt a more flexible approach in handling planning and building design requirements.

For example, it would not require every unit to have an individual kitchen, while it would also allow some units to not have windows, a government source said.

The source added that such flexibility would only be allowed if the owners made sure communal areas had enough ventilation and natural light

Former president of the Institute of Surveyors, Vincent Ho Kui-yip, said the idea to allow transitional housing in industrial buildings was a “very good concept”, but believed there was not enough incentive for owners to do so.

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“There are a lot of technical difficulties to overcome to make sure industrial buildings are inhabitable, this scheme would rely on charitable landlords who are willing to use money to comply with strict rules, but would there really be that many good-hearted people?” Ho said.

He added that it would be more suitable for authorities to build transitional housing on public land allocated for temporary, government use.

Anthony Wong Kin-wai, HKCSS’ business director, agreed that one of the biggest obstacles was a lack of funding.

“The most important factors are funds and land,” Wong said. “Even if the NGOs wanted to do more, they can’t without money. The government should have designated funding of HK$1 billion (US$128 million) for such social housing projects.”

Under the relaunched revitalisation scheme announced in the policy address, owners who want to refurbish their industrial buildings for other uses, applicants would have to designate at least 10 per cent of the floor area for arts, cultural activities, or as co-working spaces.

To encourage owners to redevelop industrial buildings built before 1987, the government will relax the plot ratio by up to 20 per cent, allowing owners to build at a higher density.