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Speeches

Speech by URA Chairman, Mr Barry Cheung, at the Planning and Development Conference 2011 of the Hong Kong Institute of Surveyors

Tackling the Problem of Urban Decay -

the New Urban Renewal Strategy and URA's Role

Thank you, Peter and Raymond, for inviting me to join the conference today, and good morning, ladies and gentlemen.

The URA and the HKIS are good partners. We rely on your members' help in providing the "7-year flat rate" valuation for all of our redevelopment projects. Your members also help us in estimating the market value of shops, and in establishing the selling price of our flats. Very soon, we will also ask you to provide unit rates for our "flat-for-flat" units.

Indeed, among all the professionals we work with, I think surveyors must know us best.

The theme of today's conference, "Housing Strategies for People in Limited Development Space" is timely as the housing issue has become a key focus of the community and the Government, and is likely to raise much debate in the coming CE election as well.

That, in turn, will create opportunities for fresh thinking, possibly new policies and, importantly, decisive action. We need to move ahead purposefully and responsibly.

The URA's primary mission, as you know, is not about flat supply. Although we do supply flats to the market through our redevelopment projects from time to time, these are a by-product of our core mission, which is to tackle the problem of urban decay.

Through our efforts in the past decade, we have developed  18,000 housing units, 74,000 square metres of GIC areas, and 37,000 square metres of public open space to the local community.

Urban decay - a quick update

In tackling urban decay we have two goals in mind: to improve the living conditions of residents in dilapidated urban areas, and to address the wider community's desire for an improved built environment in Hong Kong.

According to the URA's latest building condition study, , among the 9,020 buildings in Hong Kong over 30 years old that were surveyed, more than 40%, or 3,650, are below standard.

Some 4,000 of them are over 50 years' old. In other words, they have reached the limit of their designed life span. And of these, 65%, or 2,600 blocks, are in poor or varied condition.

We estimate that within 20 years, the number of old buildings over 50 years' old will grow fourfold, to 16,400, if Hong Kong does not act decisively. Without urgent intervention, even worse forms of urban decay will arise, and living conditions will become even more squalid.

It is a fact that many of our old buildings are poorly maintained and, in many instances, dangerous. Two incidents that occurred in Ma Tau Wai, in January 2010 and June 2011, killed eight residents. This week, another tragedy occurred in Jordan, in which one resident was killed and an eighteen-year old girl seriously injured.

In the search for increased rental yields from older buildings, owners have been known to sub-divide flats into smaller units. Some of these cubicles have become known as 'coffin homes' -- a term coined recently by a local magazine when it featured this latest abuse of slum dwellers in a cover story.

Our estimate is that around 110,000 families are living in dire conditions. And it is this large number that has galvanized the URA into urgent action, especially towards reducing the number of substandard buildings.

Although we have directly helped 34,000 families to improve their living conditions through our 54 redevelopment projects to date, and more than 80,000 more families through our rehabilitation schemes, we recognise that much more needs to be done.

There is also a need to involve the local community further and for us all to come to a lasting consensus on the best way forward.

New URS

You may be aware the Hong Kong Government held a two-year community engagement process during 2008 and 2010, in which the public was consulted on how the problem of urban decay should be tackled. The result was the Government's new Urban Renewal Strategy -- or URS -- which was published in February this year.

The URS calls for a 'people first, district-based and participatory approach'. Community involvement and engagement is clearly the intention. It sets the overall policy framework in which the URA operates, so I would like to share with you how we are now applying it to our thinking and work.

More assistance from surveyors required

The new URS clearly identifies redevelopment and rehabilitation as the URA's core business. We have been given a broader mandate to engage in, or respond to, schemes to help people in need. Our new "facilitating" and "demand-led" redevelopment schemes welcome requests from owners who want the URA to step in and help redevelop their buildings. I wish to thank HKIS as the Institute had provided very useful inputs in the design of these new schemes.

In fact, this has resulted in a rather surprising outcome.

By the end of last month, we had received a total of 25 applications from owners inviting us to help in this way. These came from six districts: Central & Western, Island East, Yautsimmong, Shamshuipo, Wong Tai Sin and Kowloon City. The number of buildings covered in these applications range from a single block to 21 blocks.

Since applicants have to convince 67% of owners to submit the application, we regard this as a very good response rate. So, although we had announced earlier that we intended to start work on only one to two of these demand-led projects in the coming financial year, given the positive response, we are now considering the possibility of doing more.

To you as members of the HKIS, this will mean more opportunity to partner with us, as we will need more help in valuing the properties affected.

Our facilitation service will also assist owners to assemble property interests for joint sale. Income from these joint sales will all go to the pockets of owners and the URA will only charge one percent on the total income as a service charge. You will be pleased to know that we have decided to invite surveyors to help in the process, so again it means more opportunities for members of the HKIS.

Flat supply

The new mode of redevelopment will also have implications for flat supply in the years to come.

In the next five years, we estimate that the projects we have already commenced will provide an additional 3,400 flats to the market. If we take on more demand-led projects in addition to these projects, we will be able to provide more flats to the market in the following five years.

Last but not least, the new URS also endorses the URA's plan to undertake larger redevelopment projects. Over the coming five years, the URA intends to initiate projects with site areas larger than 1,000 square metres.

Of course, we are aware that taking on more responsibilities in redevelopment will create new challenges. As you may aware, the URA compensates not only owners but also the tens of thousands of tenants living in sub-divided units in our project areas. To accommodate these people as we redevelop, more public rehousing units in the urban areas will be needed. And strong leadership and decisive action will be required to increase the supply of public rental housing units.

URA's housing strategies

Through our extensive and regular consultations, I believe we have built up a good understanding of the needs of the community. We now constantly factor in the social aspirations of Hong Kong people, in our development strategy.

For example, in response to the rising demand for more small-to-medium sized flats, the URA plans to provide more such units to the market. Among the 3,400 housing units that the URA will develop over the next five years, over 50% will be smaller than 500 square feet in saleable area, and they will all be located in urban areas.

We have also been responding to the desire for more choice in compensation. Our flat-for-flat compensation scheme achieves this. But it also means we have to tackle the difficult problem of how to provide them with an equivalent flat when we undertake the redevelopment of their building.

And again, the numbers are not small. According to the new URS, the URA will need to build five blocks of buildings in Kai Tak in order to provide one thousand replacement flats for owners affected by our projects.

To make sure we get things right, we have taken great care to incorporate the views of professionals, and of the public. 

In June this year we held a workshop for professionals. There were some very fruitful discussions, from which we obtained useful guidelines. We then turned these guidelines into a questionnaire and conducted an opinion survey involving more than 1,000 residents in old urban areas. We found out that the owners, who are mostly elderly, prefer modestly designed units of good quality, and that are preferably close to their community.

The bottom-line of this process is that the views of both professionals and residents have become key elements in the design of the flat-for-flat scheme, which kicks off at a site in Kai Tak.

User-oriented, environmentally friendly

We hope our Kai Tak flat-for-flat project can set a useful benchmark for what is a new category of residential housing in Hong Kong; one which is user-oriented, rather than marketing-oriented. The buildings will be more modestly designed, and won't have five-star hotel-style lobbies or clubs. All facilities will be designed to cater to the needs of users and there will also be a strong "green" element.

Here, I'm also pleased to report that the URA has injected elements of its comprehensive environmentally-friendly policy into the design and construction of its Kai Tak project. It will be the second such major URA project. The first was our Lee Tung Street redevelopment, which is now under construction. We estimate that by applying all of our green features, including energy-saving, water recycling, greening and the use of environmentally friendly materials, the building's greenhouse emissions will be cut by 23%.

In addition to redevelopment, the URA now also assists owners to halt the process of dilapidation through adequate repair and maintenance programmes.

For example, in April 2011, we launched a one-stop service that helps owners to revive their buildings through a comprehensive rehabilitation scheme.

The URA will also provide useful support to owners who need to inspect their buildings and windows under two new items of legislation, the Mandatory Building Inspection Scheme and Mandatory Windows Inspection Scheme, which are to be discussed in the LegCo soon.

Fundamentally, our approach is to be as user-friendly as possible.

Yet another example is a service centre that will be in operation at Tai Kok Tsui in early 2012. This venue will be a convenient place for professionals like you to meet with owners who need expert advice on redevelopment and rehabilitation. I look forward to giving you a quick tour of the centre once it is ready.

Finally, the new URS reaffirms the URA's preferred strategy of organizing our redevelopment programmes on a district-based approach.

Under the new URS, district urban renewal forums will be established in old urban areas to solicit the views of local residents. The first such forum has already been established in Kowloon City. Here too, I have no doubt that surveyors will play a significant role in providing advice - not just for this forum but also for others that will be set up.

Conclusion

In overall terms, I see much hope for the future. And I remain optimistic.

The community is engaged with the urban renewal process. There is a sense of drive, purpose and responsibility.

Urban renewal is seen as offering real and lasting benefit to the community, and money spent on redevelopment is money well spent.

At the URA, we remain determined to do all that we can to meet the goals set for us by the Government and by the people of Hong Kong.

And working well with professionals such as surveyors will make our task easier, and our goals much more readily achievable.

I feel sure that we can continue to count on your support to help us fulfill our mandate in the years to come.

Thank you.

(ENDS)