LCQ10: Promoting the redevelopment of old buildings
16.11.2022

âFollowing is a question by Dr the Hon Priscilla Leung and a written reply by the Secretary for Development, Ms Bernadette Linn, in the Legislative Council today (November 16): Question: As at the end of last year, there were more than 9 100 buildings aged 50 or above in Hong Kong, and the number of buildings reaching such age is increasing by 600 on average each year. Moreover, as at least 5 000 of the existing "three-nil buildings" in Hong Kong are dilapidated, not only the minority owners have to shoulder heavy burdens of maintenance costs, but also the residents face deplorable living environment and safety problems. In this connection, will the Government inform this Council if it knows: (1) whether the Urban Renewal Authority (URA) has plans to conduct a large-scale issuance of bonds to resolve the cash flow problem, thereby speeding up the pace of redevelopment of old buildings; if so, of the details; if not, the reasons for that; (2) of the number of buildings aged 50 or above which the URA redeveloped in each of the past five years; (3) whether the URA has projected the number of buildings reaching the age of 50 or above in 10 years' time; and (4) whether the URA has formulated any timetable for the redevelopment of old buildings and set short, medium and long-term redevelopment targets (e.g. redeveloping 20 per cent of the old buildings within five years and 50 per cent of the old buildings within 10 years); if so, of the details; if not, the reasons for that? Reply: President, Regarding Dr the Hon Priscilla Leung's question, in consultation with the Urban Renewal Authority (URA), I would like to reply as follows: (1) As the URA is the Government's important partner in urban renewal works, the Government will ensure that the URA has adequate resources to fulfill its statutory mission as well as to carry out the tasks entrusted by the Government. In this regard, the Government has all along been providing various forms of financial support to the URA, including the $10 billion capital injection upon its establishment and land premium waiver for its redevelopment projects with the amount of land premium waived reaching $20.8 billion in total as of March 31, 2022. In recent years, the URA has also in its suitable redevelopment projects consolidated "Government, Institution or Community" sites in the vicinity to reprovision and upgrade relevant facilities. This will increase the overall development potential of the redevelopment projects, which is also a form of financial support rendered to the URA by the Government. We understand that in the coming years, the URA will need more cashflow to undertake a number of large-scale "planning-led" and "district-based" redevelopment projects. With a long-term credit rating of AA+ by Standard and Poor's and its stable outlook, the URA is well-equipped to raise funds. We are therefore confident that the URA will be able to continue to meet its liquidity needs through borrowing. To this end, the Chief Executive recently announced in his 2022 Policy Address that the Government will raise the borrowing limit of the URA by phases with regard to its financial situation and the market environment, with a view to supporting the URA's preparation for fundraising. The URA has appointed a financial consultant to conduct a comprehensive study on the detailed funding arrangements for its future urban renewal works. The URA will include proposal of uplifting its borrowing limit in its draft 5-Year (2023-24 to 2027-28) Corporate Plan to be submitted to the Financial Secretary by the end of this year. (2) During the period from January 2018 to October 2022, the numbers of buildings aged 50 or above (at the time of project commencement) involved in the redevelopment projects commenced by the URA in each year are as follows: Year Number of buildings aged 50 or above 2018 42 2019 23 2020 113 2021 122 2022 (up to October) 167 (3) According to the Buildings Department's record, the number of private buildings (Note 1) aged 50 or above as of end 2020 was 8 700. The number is projected to be around 13 900 in 2030. (4) For short- and medium-term goals, according to the URA's 5-Year Corporate Plan (2022-23 to 2026-27), the new redevelopment projects to be commenced during such period are expected to involve about 650 buildings. Three of these redeveloped projects were commenced in the current financial year. As for medium- and long-term goals, the URA will identify projects with restructuring and re-planning potential from its district studies (including the District Study for Yau Ma Tei and Mong Kok completed in 2021, and the district studies respectively for Sham Shui Po and Tsuen Wan commenced in this financial year) for inclusion in its project reserve for further planning. Nonetheless, urban renewal works cannot be taken up solely by the URA, participation from the private market is also required. In this connection, the Government is studying measures to update and streamline the compulsory sale regime under the Land (Compulsory Sale for Redevelopment) Ordinance (Cap. 545) to help encourage greater participation by private land owners in urban renewal. We will soon consult the Legislative Council (LegCo) Panel on Development and the relevant stakeholders of the detailed proposals, and plan to introduce an amendment bill into the LegCo in the second half of 2023. Lastly, although it is an undeniable fact that buildings are ageing, if they are structurally sound, proper maintenance can help prolong their life span and safeguard building and public safety. The Government has allocated over $19 billion in the past five years to the URA for implementing various subsidy schemes (Note 2) to support owners in need to properly maintain their properties. We will continue with our rehabilitation-cum-redevelopment strategy. Note 1: Excluding New Territories Exempted Houses, Government buildings and buildings of Hong Kong Housing Authority. Note 2: Subsidy schemes include the Operation Building Bright 2.0 ($6 billion), Fire Safety Improvement Works Subsidy Scheme ($5.5 billion), Lift Modernisation Subsidy Scheme ($4.5 billion), Building Maintenance Grant Scheme for Needy Owners ($2 billion) and Building Drainage System Repair Subsidy Scheme ($1 billion).