Yu Lok Lane/Centre Street project begins property acquisition
The Yu Lok Lane/Centre Street project of the Urban Renewal
Authority (URA) in Sai Ying Pun will take a major step forward when
owners of some 80 property interests within the site boundary are
offered purchase proposals today (Monday).
Occupying an area of about 23,000 square feet, the site is presently occupied by 22 buildings mostly built in around 1950s. They are generally in a very poor condition and deemed to be beyond economic repair. Some of them do not even have toilet or basic sewage facility. The redevelopment will help improve the living conditions of about 80 households, comprising 270 residents, many of whom have long urged the URA to redevelop the area.
In addition to a new residential development above ground level, the URA intends to turn the long- dilapidated area into a heritage open space with a special design which will feature some of the local heritage and nostalgic features of Sai Ying Pun in past generations.
The total development cost of this project is estimated at $590 million, of which the acquisition and rehousing cost is about $240 million.
Affected owner-occupiers of domestic properties will be offered $6,063 per square foot of saleable floor area. The acquisition offers are based on the Government's Home Purchase Allowance (HPA) policy. HPA is the difference between the market value of a notional seven-year-old flat in a comparable quality building in a similar locality (commonly known as "seven-year rule") and that of the acquired property. In addition to the market value of the acquired properties, owner-occupiers will receive the full HPA amount whereas owners of tenanted and vacant domestic properties will receive a supplementary allowance up to half of the HPA.
"As in previous projects, the URA has appointed seven independent valuation firms for the valuation of the unit rate of the notional seven-year-old flat. The lowest and highest valuations will be eliminated before averaging the remaining five as the final unit rate for the offers," a spokesman for the URA said.
This broad-based and objective method of valuation has proved to be well accepted by most owners in previous projects, he added.
"The value of a seven-year-old notional flat is used solely for the basis for calculating the cash compensation offers. It does not necessarily imply that a ready current supply of seven-year-old flats of similar sizes is available for purchase in the locality. Owners have the sole discretion to decide how to use the cash compensation which they receive according to their personal needs and preferences," he explained.
"Based on feedback from owner-occupiers affected by previous projects, the current compensation framework provides ample flexibility to enable them to exercise their choices in accordance with their personal circumstances. Whilst some owner-occupiers might choose to locate themselves within the same areas, others might wish to live elsewhere in Hong Kong, possibly to be nearer their close relatives, or for other reasons. Some might even choose to retire and live in the mainland."
"Judging by URA's experience in previous projects, some owner-occupiers of domestic units may prefer to find replacement flats within the same locality so as to maintain their lifestyles and social networks. The URA will, as for other projects, provide them with as much assistance as it can to help them to find accommodation suitable for them and may, if appropriate, consider introducing new measures to further facilitate this to the extent practicable," the spokesman added.
For a building in single ownership, it is valued either on its existing use value plus relevant allowances for shops and domestic units in the building or on its redevelopment value plus an ex-gratia allowance of 5%, whichever is higher.
Affected owners will have ample time to consider URA's offers and to accept them within the next 60 days. In addition to the acquisition offers, owners will receive an incidental cost allowance (ICA), where applicable, as an incentive for them to accept the offers within the 60-day period. This allowance serves as a subsidy for the removal and various other expenses normally incurred in the purchase of a replacement flat.
The current ICA for owner-occupied domestic property is $106,400 or $95 per square foot ($1,025 per square metre) of saleable floor area, whichever is higher. For domestic property that is tenanted or vacant, the ICA is $83,600.
For non-domestic properties, the acquisition offers will include an ex-gratia allowance on top of the market value. The allowance for tenanted or vacant non-domestic property is 10 per cent of its market value or one time the government rateable value, whichever is higher. The allowance for owner-occupied non-domestic property is 35 per cent of its market value or four times its rateable value, whichever is higher.
Upon completion of the property acquisition, the URA will make compensation or rehousing arrangements for the tenants concerned, if eligible.
The URA will contact owners concerned and explain to them the URA's acquisition offers. Briefing sessions will be held for tenants on the compensation and rehousing arrangements. Residents can also contact the URA's Neighbourhood Centre at G/F 27A Gage Street, or call the URA hotline at 2588 2333 for any enquiry they may have.
The Authority has commissioned an urban renewal social service team staffed by professional social workers of the St James' Settlement to provide counseling service and practical assistance to residents who may encounter personal or family problems. Affected residents may also contact the social service team at 2857 1606 for assistance.