MESSAGE

This year, I am happy to present the first Housing Policy Programme to be published by the Government of the Hong Kong Special Administrative Region. It is built on the foundation provided by the numerous pledges and commitments we have made since the establishment of the Housing Bureau (formerly Housing Branch) to achieve our objectives to help all households gain access to adequate and affordable housing, and to encourage home ownership in the community.

In his speech to celebrate the establishment of the HKSARG on 1 July 1997, the Chief Executive, the Honourable Tung Chee Hwa, emphasised the Government's determination to resolve our housing problems and set a target of achieving a home ownership rate of 70% in ten years. He pledged that the Administration would increase overall housing supply to at least 85 000 flats a year, and reduce the average waiting time for public rental housing to three years. This year's Policy Programme sets out how we intend to meet those commitments.

In January this year, we published for public consultation a review of our Long Term Housing Strategy, entitled "Homes for Hong Kong People: The Way Forward". This document contained a total of 41 specific recommendations designed to meet our housing objectives into the next decade. Public consultation ended on 31 May, and we have completed our analysis of views received. We will publish a White Paper within this year, taking into account our original recommendations, public views and the new initiatives in this Policy Programme document. Our intention is that the White Paper will serve as a blue-print for housing policy in the years ahead, to ensure that we can meet the goals set by the Chief Executive and satisfy the housing needs of our community.

(Dominic S.W. Wong)
Secretary for Housing

INTRODUCTION

The Hong Kong Special Administrative Region (HKSAR) Government is committed to ensuring that it is open and fully accountable to the people of Hong Kong. Policies, aims and programmes must be clear to all so that the Government can be accountable for their delivery. With greater clarity of purpose and accessibility, the public can better assess our performance and help us improve our quality of service.

The Policy Programmes, which underpin the Policy Address delivered by the Chief Executive in October 1997, explain the objectives and ongoing work of each Policy Bureau and its supporting departments, as well as Department of Justice, Office of the Judiciary Administrator, Independent Comission Against Corruption and the Administration Wing of the Chief Secretary for Administration's Office, and their proposed new commitments for the coming year. They are set out in three sections:

• Objectives state the overall objectives of the Government according to each programme area, in particular, responsibilities in relation to implementing the Basic Law are spelt out.

• Major Programme Areas list the aims and the important features of each programme area. An overview of the current situation and key performance indicators are given. This section also sets out the Government's new commitments for the coming year.

• Into the 21st Century describes the vision of the Government for a better Hong Kong as we enter the 21st Century and the plans we are making to meet our long-term needs.

Objectives

The Housing Bureau's objectives are:

• to help all households gain access to adequate and affordable housing; and

• to encourage home ownership in the community.

We seek to achieve these goals by:

• providing a sufficient supply of land, together with supporting infrastructure, for public and private housing;

• creating the conditions to enable the private sector to make the fullest possible contribution towards meeting the demand for housing;

• implementing subsidised housing schemes to enable those in the relevant income groups to buy their own homes;

• providing public housing at reasonable rents to people who cannot afford any other type of housing; and

• monitoring the private housing market and, where necessary, introducing measures to curb speculation.

These commitments are part of the Government's wider effort to meet the basic needs of the community and to improve the quality of life.

Implementing the Basic Law

The requirements of the relevant articles of the Basic Law, as listed at Annex, have been reflected in the Bureau's objectives. In particular, we are committed to promoting and co-ordinating the development of the real estate industry and to maintaining high standards in the professions directly involved in housing development.

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Major Programme Areas

The Housing Bureau is responsible for six major programme areas:

1. Public Rental Housing;

2. Subsidised Home Ownership;

3. Financial Assistance for Home Buyers;

4. Private Sector Housing;

5. Housing Demand and Flat Production; and

6. Long term Housing Strategy.

A. Public Rental Housing

Aims

The aims of the Bureau are to ensure that:

• sufficient public rental flats are provided to people who cannot afford any other type of housing; and

• public rental flats are allocated only to people in genuine need.

Overview

About 2.4 million people are living in public rental housing. Our immediate target is to build 141 000 public rental flats during the six-year planning period ending March 2001. We have allocated or earmarked sufficient sites to enable this target to be met.

We have implemented measures aimed at ensuring that public rental flats are allocated to people in genuine need. With effect from 1 April 1997, tenants with assets and income exceeding prescribed limits have been required to pay market rent.

Key Indicators

In 1996-97,

• The average waiting time for public rental flats was 6.5 years, down from seven years in 1995-96 and on schedule to meet the target of less than five years by 2001.

• We redeveloped 30 older public housing blocks. We aim to redevelop all non-self-contained flats before 2001 and to complete the redevelopment programme by 2005.

• We reduced the average turnaround time for reallocation of refurbished public rental flats to under three months.

• We allocated over 90% of new flats to prospective tenants within three weeks of completion.

• We cleared all Temporary Housing Areas (THAs) built before 1984.

• We rehoused three-quarters of people already in temporary housing as at October 1992.

• We contracted out the management of five new rental estates to the private sector.

• We published a document entitled "Knowing Your Rights and Responsibilities" setting out the range of services provided by the Housing Authority and clients' reciprocal obligation to observe the Housing Authority's rules and regulations.

• We cleared the backlog of around 4 000 elderly single people on the Housing Authority's 1993 Waiting List.

• We allocated about 3 800 flats under various priority housing schemes to the elderly.

• We launched a publicity campaign to advertise existing priority housing schemes for the elderly and to encourage those eligible to apply for public housing.

• We spent about $4 billion on maintenance and repair work in public rental housing estates as well as on the refurbishment of vacant flats prior to reallocation.

• We rehoused about 7 300 families with existing living space below 5.5 m² per person to relieve overcrowding in public housing estates.

• We offered better-off tenants priority in the purchase of subsidised home ownership flats, in order to encourage them to vacate their public rental housing flats for use by more needy families. Over 670 families acquired flats under this scheme.

• We completed the installation of security facilities in all public housing estates in July 1997.

By the end of 1997,

• We will have made at least one rehousing offer to all households who were living in THAs in September 1995. So far, we have made such offers to 97% of the target population.

• We will extend the Estate Management Advisory Committee Scheme, which provides tenants the chance to discuss matters of concern with the management of public rental estates, to all public rental estates. It has so far been implemented in 149 estates, or 90% of all estates.

New Commitments

Reduction of average waiting time

1. We aim to reduce the average waiting time for public rental flats to under five years by 2001, to four years by 2003, and to three years by 2005 by increasing the number of flats sold and rented to Waiting List applicants.

2. We will increase the supply of public rental flats for families on the waiting list from an average of 14 000 flats to 20 000 flats beginning in 2000.

3. In 1998, we will introduce a means test, covering income and assets, for prospective Housing Authority tenants and for adult members of a family where the tenant and spouse are deceased to ensure that public rental housing flats are allocated to families in genuine need.

Public rental housing for eligible households in bedspace apartments

4. To provide decent accommodation to bedspace apartment lodgers, we will, by 2001, offer public housing, including interim housing, to all eligible persons displaced from bedspace apartments which do not meet the safety standards for licensing.

Rehousing of squatters on urban mixed lots

5. We will draw up a programme for clearance of squatter areas affected by new development for a public purpose in order to improve the living conditions of about 12 000 families.

Clearance of remaining Temporary Housing Areas

6. We will clear all remaining old-style Temporary Housing Areas (THAs) by 2000 by rehousing eligible clearees in public housing, including interim housing, in order to improve the living conditions of those affected and to free land for development.

7. The Housing Authority has developed plans to construct a new form of vertical interim housing on earmarked sites in the New Territories to tie in with the old-style THA clearance programme. We plan to build over 15 000 units of vertical interim housing between 2001 and 2005, as required.

Clearance of remaining Cottage Areas

8. We will clear the remaining five Cottage Areas by 2001 to provide a more satisfactory living environment to resettled households.

Assistance to Senior Citizens

9. We will review public housing allocation arrangements to encourage eligible family members to live with elderly members.

10. We will invite the Hong Kong Housing Society to undertake a pilot "Senior Citizen Residents Scheme" comprising 500 flats to be completed by 2001. The flats will be leased to elderly people in the middle income group to give them access to affordable, purpose-built accommodation with integrated care services.

11. We will expand our existing Housing for Senior Citizens Scheme to provide more specially designed rental housing units with warden service to able-bodied elderly persons not living with their families.

B. Subsidised Home Ownership

Aims

The aims of the Bureau are to ensure that:

• sufficient quality subsidised home ownership flats are provided to enable people in the relevant income groups to buy their own homes;

• sufficient incentives are in place to encourage public rental housing tenants to upgrade to home ownership; and

• a viable secondary market in subsidised home ownership flats is developed to provide more choice for home buyers.

Overview

About 230 000 flats have already been built under four subsidised home ownership schemes since 1978: the Home Ownership Scheme (HOS) and Private Sector Participation Scheme (PSPS) operated by the Housing Authority; and the Flats for Sale Scheme (FFS) and the Sandwich Class Housing Scheme (SCHS) operated by the Housing Society. Our immediate target is to help over 175 000 extra families buy their own homes during the six-year planning period ending March 2001 through these schemes. We have allocated or earmarked sufficient sites to enable this target to be met.

Key Indicators

In 1996-97,

• We built about 17 000 flats under the four subsidised home ownership schemes.

• We introduced legislation to relax the resale restrictions on HOS and PSPS flats. This will help increase market turnover to meet housing demand and free public rental housing flats for reallocation to those in genuine need. The legislation came into effect in June 1997.

• We raised the SCHS income limit from $50,000 to $60,000 a month to meet the aspirations of more middle-income families for home ownership.

New Commitments

HOS and PSPS

1. In 1998, we will invite the Housing Society to launch a "mixed development" scheme on a pilot basis, under which private developers will be required to make available at least 30% of flats in a development for sale under our subsidised home ownership programme. The pilot scheme will provide about 500 subsidised home ownership flats by 2001.

2. Beginning in 1998, we will offer all subsidised home ownership flats directly to families on the Waiting List when it comes to their turn for public rental flat allocation.

Sandwich Class Housing

3. In view of anticipated future demand and as a further effort to assist sandwich class families to purchase their own homes at affordable prices, we will build another 20 000 flats under the Sandwich Class Housing Scheme by 2005, in addition to the 30 000 flats we have pledged to build under the Scheme by 2003.

C. Financial Assistance to Home Buyers

Aim

The aim of the Bureau is to ensure that financial assistance is provided to eligible families to buy their own homes.

Overview

We have provided financial assistance to help over 22 500 families buy their own homes through the Home Purchase Loan Scheme under the Housing Authority since 1988 and the Sandwich Class Housing Loan Scheme under the Housing Society since 1993.

Key Indicators

In 1996-97,

• We provided interest-free loans and subsidies under the Home Purchase Loan Scheme to help about 5 800 families buy their own homes.

• We helped about 500 families buy their own homes under the Sandwich Class Housing Loan Scheme.

• We obtained the approval of the Finance Committee of the Legislative Council for a loan to the Housing Society of $1.38 billion to help a further 3 000 families buy their own homes under the Sandwich Class Housing Loan Scheme.

New Commitments

1. We will seek the Finance Committee's approval for funds to launch a new "Home Starter" loan scheme targeted at first time home buyers. Under this scheme, we will provide loans of $600,000 each to 6 000 eligible families in each of the next five years.

2. In 1998, we will explore with the Housing Authority the possibility of increasing the number of loans under the Home Purchase Loan Scheme.

D. Private Sector Housing

Aims

The aims of the Bureau are:

• to maximise the role of the private sector in meeting our housing production targets; and

• to monitor the private residential property market and, where necessary, introduce measures to curb speculation and to protect consumers' interest.

Overview

Housing supply

Over the past 20 years, the private sector has built about 560 000 flats. Private housing now accommodates about half of our population. Our immediate target is to facilitate the production of 195 000 private sector flats during the six-year planning period ending March 2001.

Anti-speculation

Property speculation and soaring prices have caused widespread community concern. We are determined to increase housing supply to meet demand and to tackle the problem of speculation.

Key Indicators

In 1996-97,

• We introduced effective anti-speculation measures in January 1997 and further measures in March 1997 to increase supply. Speculation through transfer of shell companies and ballot trading has practically ceased.

• We have devised a range of anti-speculation measures which can be introduced at short notice.

• We will establish an Estate Agents Authority in October 1997. The Authority will prepare rules and regulations for the issue of transitional estate agent licences towards the end of 1998. A new licensing and regulatory system will be fully operational in 2001, having allowed a two-year transitional period for the trade.

New Commitments

1. In 1997-98, we will dispose of about 260 Government quarters and three sites now used for staff quarters to boost the supply of larger flats in the market.

In 1998,

2. We will speed up the processing of land transactions and pre-sale consent applications so that the issue of pre-sale consents can be advanced from 12 months to 15 months before completion of a development.

3. We will enhance our ability to monitor the market by improved data co-ordination and computerisation.

4. We will monitor the property market closely and implement appropriate anti-speculation measures as and when the situation so requires.

5. We will review the provisions of building covenants for sites under development to help ensure that completed flats are put onto the market speedily.

E. Housing Demand and Flat Production

Aims

The aims of the Bureau are:

• to regularly and accurately assess future demand for housing, in both the private and public sectors; and

• to ensure a sufficient supply of suitable land, together with supporting infrastructure, for production of public and private housing.

Overview

Housing demand

The Working Group on Housing Demand is operated by the Planning Department under the direction of the Housing Bureau to assess overall housing demand. The Group has constructed a housing demand model which is capable of responding to changes in working assumptions such as Government policies and the latest available statistics. Its latest projection is for a requirement of 80 000 new flats on average each year over the next ten years. For the purpose of land use planning, we are committed to providing a minimum of 85 000 new flats beginning in 1999-2000. This represents a "safety margin" of about 5 000 flats, or 6% of the current forecast of housing demand.

Land production

For the period up to March 2001, sufficient land has been allocated or identified (based upon past trends for private sector production) to meet our announced production target of 85 000 flats a year for both public and private housing. For the period from April 2001 to March 2006, our land requirements can be met by the development of sites already reserved for residential purpose on current town plans, the redevelopment of existing sites in the public and private housing sectors, the development of new strategic growth areas, rezoning and increasing density of development.

Accelerating flat production

We have set up a Housing Project Action Team to monitor, facilitate and accelerate the progress of major housing projects (defined as those producing 200 or more flats each). We have earmarked extra funds to finance infrastructural projects needed to support housing production. We have also set up an integrated housing information system to assist us in the formulation and review of housing policies and targets.

A Steering Committee on Land Supply for Housing (HOUSCOM) has been set up under the chairmanship of the Financial Secretary to provide a high level forum within the Government for setting priorities and making decisions on land supply for housing. The Committee will produce a rolling programme of land supply and flat production to meet the Chief Executive's target of providing not less than 85 000 flats a year.

Key Indicators

In 1996-97,

• We disposed of 91 hectares of land for producing flats in the public and private sectors.

• We fast-tracked the production of 68 housing projects in the private sector, advancing the production of over 144 000 flats.

• We invested $128 million in six housing-related infrastructure projects.

• We expanded the remit of the Housing Project Action Team (HPAT), chaired by the Secretary for Housing to fast-track housing development, to cover projects yielding 200 or more flats each.

In 1997,

• We completed an inventory of all housing developments in Hong Kong.

New Commitments

In 1998,

1. We will monitor our inventory of housing developments on a site by site basis to detect and remedy potential shortfalls in flat production speedily.

2. We will allocate specific responsibilities to individual departments so that every step in the flat production process is properly accounted for.

3. We will put in place a well-structured mechanism to resolve problems in housing projects speedily at both central and district levels.

4. We will adopt a streamlined process for public housing production under which the average planning and development time will be reduced from 62 months to 47 months for the Housing Authority and from 52 months to 46 months for the Housing Society.

5. We will seek approval from the Finance Committee for funds to enable detailed design of housing-related site formation and other infrastructure work to be carried out in parallel with statutory procedures.

6. We will allow tenders to be invited for housing-related site formation and other infrastructure work in parallel with seeking approval from the Finance Committee for upgrading projects to Category A status.

7. We will review our land use policy to allow rezoning of existing land, including agricultural land, where infrastructural capacity and environmental considerations permit. We will also increase the density of development in selected locations where there is spare infrastructural capacity.

8. We will increase the development density of Housing Authority estates by improving supporting infrastructure and exercising flexibility in the application of planning guidelines where this is difficult to achieve in the short term.

9. HOUSCOM will complete its review of housing development procedures to increase the efficiency of housing production.

10. We will entrust housing-related infrastructure works to the private sector where appropriate.

Over the next five years,

11. We will make available about 285 hectares of land for public housing development and about 405 hectares of land for private housing development.

12. We will spend about $11 billion to accelerate 61 housing-related infrastructure projects, including waterworks, sewage, land formation and schools.

F. Long Term Housing Strategy Review

Aims

The aims of the Bureau are to formulate, implement and keep under review our ten year Long Term Housing Strategy so as:

• to help all households gain access to adequate and affordable housing; and

• to encourage home ownership in the community.

Overview

The Long Term Housing Strategy (LTHS) was first formulated in 1987 for the period up to March 2001. In the 1995 Policy Address, we announced our intention to review the LTHS. The goals of the review were to take stock of what we had achieved and what we expected to achieve by 2001, and to set an overall direction for the period up to March 2006. A consultative document setting out our conclusions and recommendations was published in January 1997.

Comments on the conclusions and recommendations made in the consultative document were received from the public until the end of May 1997. We have now completed an analysis of comments received, and are working towards the publication of a White Paper taking into account our original recommendations, public views, as well as the vision set out by the Chief Executive in his speech on 1 July 1997.

Key Indicators

In 1997,

• We published the LTHS Review Consultative Document.

• We gave over 110 briefings on the LTHS Review Consultative Document to Legislative Council members, District Boards, the Housing Authority and the Housing Society, political parties, professional bodies, private developers, academics, housing concern groups and the media.

• We received some 450 individual written submissions.

New Commitments

1. We will publish a White Paper within 1997 setting out a new ten-year LTHS for the provision of adequate and affordable housing to the community into the next century.

2. We aim to increase the overall home ownership rate to 70% by 2007.

3. In addition to increasing the production of subsidised home ownership flats and facilitating the role of the private sector, as described earlier in this document, we will achieve this goal by providing the opportunity over the next ten years for at least 250 000 families living in public rental housing to buy their flats at reasonable and affordable prices, taking into account the age and location of the flats as well as other relevant factors. Flexible mortgage arrangements will be negotiated with financial institutions, the condition of flats will be checked and essential renovation work carried out before sale; a structural guarantee will be provided, maintenance funds will be established, partly with contributions from sale proceeds, and reasonable re-sale conditions will be set. We expect to receive details of such a scheme from the Housing Authority in time for the Government to take a decision by the end of this year, so that the first batch of about 25 000 flats can be sold early in 1998.

4. We will establish within 1997 a LTHS Advisory Committee to be serviced by the Housing Bureau.




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Into the 21st Century

We are fully committed to solving the housing problems of Hong Kong; to achieving our key housing goals of helping all households gain access to adequate and affordable housing and encouraging home ownership in the community; and to fulfilling the specific pledges made by the Chief Executive in his speech on 1 July 1997 as well as in this Policy Programme document.

Three of our commitments should be highlighted:

• Our pledge to achieve a home ownership rate of 70% by 2007. The key to achieving this will be a major expansion of our existing subsidised home ownership schemes combined with a scheme to sell public rental flats to existing tenants.

• Our pledge to build at least 85 000 flats a year (public and private sectors), starting from 1999-2000. To achieve this, we will need a sufficient and steady supply of land. To achieve this, we have set up an effective mechanism to fast-track critical housing projects and related infrastructure, to cut red tape and to resolve inter-departmental disputes which can delay or frustrate housing production.

• Our pledges to help people in genuine need by reducing the average waiting time for public rental flats to three years by 2005, and to rehouse residents of Temporary Housing Areas, Cottage Areas, bedspace apartments and squatter areas affected by development for a public purpose.

All these objectives and initiatives must be brought together in a single, comprehensive "blue-print" for housing. This will be provided in the form of a LTHS White Paper, to be published soon.

It is equally important that we keep our strategy under regular review, so that we can respond quickly and appropriately to changing circumstances. The LTHS Advisory Committee to be set up in 1997 will help the Secretary for Housing in this important task, which will ensure that we achieve our housing goals well into the 21st Century.




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Annex : Relevant Articles of the Basic Law




Chapter V: Economy

Section 1: Public Finance, Monetary Affairs, Trade, Industry and Commerce

Article 119

The Government of the Hong Kong Special Administrative Region shall formulate appropriate policies to promote and co-ordinate the development of various trades such as manufacturing, commerce, tourism, real estate, transport, public utilities, services, agriculture and fisheries, and pay regard to the protection of environment.




Note

In addition, all Bureaux/Departments, as well as Department of Justice, Office of the Judiciary Administrator, Independent Commission Against Corruption and the Administration Wing of the Chief Secretary for Administration's Office, have joint responsibility for the implementation of the following articles :

Articles 11 (first paragraph), 16, 56 (second paragraph),62(1) and (2), 64, 142, 148, 149, 150, 151, 152 and 153.




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Policy Programme