Legislative Council

LC Paper No. CB(1) 1635/98-99
(These minutes have been seen
by the Administration)

Ref: CB1/PL/HG/1

Panel on Housing

Minutes of special meeting
held on Tuesday, 30 March 1999, at 11:45 am
in the Chamber of the Legislative Council Building

Members present :

Hon LEE Wing-tat (Chairman)
Hon Gary CHENG Kai-nam (Deputy Chairman)
Hon Edward HO Sing-tin, JP
Hon Albert HO Chun-yan
Hon LEE Cheuk-yan
Hon Fred LI Wah-ming
Hon NG Leung-sing
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon Ronald ARCULLI, JP
Hon James TO Kun-sun
Hon CHAN Yuen-han
Hon LEUNG Yiu-chung
Hon LAU Kong-wah
Hon Andrew CHENG Kar-foo
Hon Timothy FOK Tsun-ting, JP

Members absent :

Hon David CHU Yu-lin
Hon HO Sai-chu, JP
Hon CHAN Kam-lam
Hon Andrew WONG Wang-fat, JP
Dr Hon YEUNG Sum
Hon TAM Yiu-chung, JP

Public officers attending :

For Item I

Housing Bureau

Mr Andrew R WELLS, JP
Deputy Secretary for Housing (2)

Housing Department

Mr LAU Kai-hung
Business Director/Allocation and Marketing

Mr CHENG Yao-kong
Assistant Director/Applications and Home Ownership

For Item II

Housing Bureau

Mr Andrew R WELLS, JP
Deputy Secretary for Housing (2)

Housing Department

Mr LAU Kai-hung
Business Director/Allocation and Marketing

Miss Peggy CHAN
Chief Estate Surveyor/Rental Housing & Private Section Participation Scheme)

For Item III

Housing Bureau

Ms Eva TO
Principal Assistant Secretary for Housing (1)

For Item IV

Housing Bureau

Miss Sandy CHAN
Principal Assistant Secretary for Housing (2)

Housing Department

Mr LAU Kai-hung
Business Director/Allocation and Marketing

Mr LEE Chu-yin
Chief Housing Manager/Redevelopment

Attendance by invitation :

For Item III

Hong Kong Housing Society

Mr Victor SO
Executive Director

Mr Francis LAW
Director (Planning & Development)

Clerk in attendance :

Ms LEUNG Siu-kum
Chief Assistant Secretary (1)2

Staff in attendance :

Miss Becky YU
Senior Assistant Secretary (1)3

I The Majority Rule for allocation of public rental housing flats to Waiting List Applicants
(LC Paper Nos. CB(1) 691/98-99, 1060/98-99(03) and (04))

Members noted that under the existing seven-year residence rule, applicants on the Waiting List (WL) with local born children were given priority over those with Mainland-born children in the allocation of public rental housing (PRH) flats. In this respect, Mr James TO questioned if the residence rule was in conformity with the Hong Kong Bill of Rights Ordinance. Ms CHAN Yuen-han also pointed out that the residence rule might have contravened Articles 24 and 36 of the Basic Law which stipulated that children of permanent residents of Hong Kong born outside Hong Kong should have the same rights to social welfare, including public housing as those born locally.

2. In reply, the Business Director/Allocation and Marketing (BD/A&M) explained that the implementation of the seven-year residence rule in 1979 to accord priority to PRH applicants who were long-term residents in Hong Kong was to take account of the limitations on public housing resources. He stressed that there was no discrimination arising from the residence rule as it was inevitable that public housing would have to be operated according to certain priorities, such as the various priority housing schemes for elderly PRH applicants.

3. BD/A&M added that families which did not meet the residence requirement could still register on WL. Their turn for allocation of PRH would come when the majority of the family members had resided in Hong Kong for seven years. The difference in waiting time between these families and long-term residents was only six months given that the current waiting time for PRH was six-and-a-half years. BD/A&M further said that the need to review the requisite years of residence of seven years would depend on the future demand for PRH and whether the average waiting time for PRH could be reduced to three years in 2005 as pledged. As to whether the Task Force headed by the Chief Secretary to assess the impact of the Court of Final Appeal's judgment on 29 January 1999 would include in its study the seven-year residence rule, the Deputy Secretary for Housing (2) (DS for H (2)) said that he was not in a position to comment on the work of the Task Force. He however undertook to relay members' concerns to the Task Force for consideration.

4. On the legality of the seven-year residence rule, BD/A&M advised that legal advice had been sought and it was confirmed that the residence rule did not violate any existing legislation. He supplemented that the residence rule was a long-standing policy which had gained much public support. By way of illustration, over 80% of the respondents in a recent survey considered that the residence rule was a fair eligibility criterion for PRH.

5. Mr LEUNG Yiu-chung did not accept the Administration's explanation. He held the view that the seven-year residence rule was unfair, in particular to those clearees who became ineligible for re-housing to PRH because their family members had come from the Mainland, thus failing the residence rule. Given that clearees concerned were already eligible for re-housing to PRH before the addition of family members from the Mainland, there was no question queue-jumping. Mr LEUNG therefore urged the Administration to review the residence rule for clearees, including lowering the requisite years of residence of seven years and reducing the percentage of household members with the requisite years of residence. DS for H (2) explained that while Mr LEUNG's proposed changes in the residence rule might be of benefit to some individual households, applicants for PRH as a whole would be adversely affected since they would have to wait for a longer period of time for PRH. He also stressed that all PRH applicants should be well aware of the criteria such as monthly household income which would affect their eligibility for PRH.

6. Apart from clearees, Mr Albert HO was concerned about those single PRH applicants whose applications would be frozen from allocation as a result of addition of family members from the Mainland. He cautioned that some of these applicants might choose not to include their family members in their PRH applications with a view to retaining their position on WL. Upon allocation of PRH flats, these family members would become unauthorized occupants of the flats. To address the problem, Mr HO opined that the Administration should offer PRH flats to applicants concerned according to the number of family members fulfilling the residence rule in the initial application, regardless of the consequence of overcrowdedness. In reply, BD/A&M considered it inappropriate to allocate to PRH applicants a flat which was not commensurate with their family size. He added that families with special housing needs could apply for compassionate re-housing. The Chairman however pointed out that compassionate re-housing would only be considered under special circumstances upon recommendation of the Social Welfare Department.

7. Mr TO remained unconvinced of the Administration's explanation. He was of the view that families aggrieved by the seven-year residence rule should take their cases to the Court. At members' request, the Administration undertook to consider the legal position on the seven-year residence rule, with regard to the Hong Kong Bill of Rights Ordinance as well as Articles 24 and 36 of the Basic Law.

    (Post-meeting note: The Administration's response was circulated vide LC Paper No. CB(1) 1466/98-99 on 8 June 1999.)

II Mixed development concept for the redevelopment of public housing estates
(LC Paper No. CB(1) 1060/98-99(05))

8. BD/A&M advised that the concept of mixed development was first introduced in the Long Term Housing Strategy White Paper released in February 1998. The objective was to encourage private sector involvement in the subsidized housing programme so as to improve the quality, design and standard of management of the flats concerned. Furthermore, in view of the impending completion of the Comprehensive Redevelopment Programme in 2005, the Administration had to explore other means to improve the quality of public housing flats and mixed development was a possible alternative.

9. Messrs LEUNG Yiu-chung and Albert HO asked if the decision to redevelop PRH estates by way of mixed development was made on the basis of financial return or tenants' aspiration. DS for H (2) clarified that although the concept of mixed development was well supported by the Housing Authority (HA), it was still at a conceptual stage. The feasibility of mixed development had yet to be confirmed subject to the results of the two pilot schemes in Ap Lei Chau and West Kowloon Reclamation. He assured members that if HA decided to redevelop PRH estates by way of mixed development in the future, the interests of the tenants as well as the community at large would be taken into consideration.

10. As regards the use of the site of San Fat Estate (SFE) upon demolition, BD/A&M advised that a public transport interchange would be built on the site for the future West Rail Tuen Mun Centre Station. Mr LEE Cheuk-yan asked if HA had ever urged the Administration to develop PRH estates above the interchange. BD/A&M explained that it would not be cost effective to use the site for PRH having regard to the substantial cost incurred in developing the site. Moreover, the Administration had already identified sufficient land in Tuen Mun and Tin Shui Wai districts for the development of PRH to meet demand. Mr LEE expressed reservations at the Administration's proposal on redevelopment of PRH estates on prime sites into subsidized home ownership flats rather than PRH flats.

III Sandwich Class Housing Scheme
(LC Paper No. CB(1) 1063/98-99(01))

11. At the invitation of the Chairman, the Executive Director/Housing Society (ED/HS) briefed members on the latest development of the two Sandwich Class Housing Scheme (SCHS) projects in Tseung Kwang O (the Pinnacle) and Kwai Chung (Highland Park).

The Pinnacle

12. On the allegation that HS was unable to deliver the flats for occupation before 31 March 1999 as pledged, ED/HS clarified that the date referred to was only the latest date upon which HS should obtain the Occupation Permit (OP) for the project. In fact, HS had already acquired the requisite OP in September 1998. He added that there was no express provisions under the Agreement for Sale and Purchase governing the time within which flats should be delivered after the issue of OP. The Director (Planning & Development)/HS (D(P&D)/HS) supplemented that HS would start issuing Completion Notices to invite purchasers in five batches to complete assignment of the property. The first batch of 150 notices would be issued on 31 March 1999 and the remaining batches within April 1999. In addition, special arrangements had been made to enable purchasers to view their own flats before completion of assignment. They would be given 14 days from the second working day after the date of issue of the Completion Notice to view their flats and complete the assignment. D(P&D)/HS also took note of Mr LAU Kong-wah's suggestion of preparing a list showing the number of batches of buyers having invited to complete assignment so that buyers could make necessary arrangements.

13. As regards the top-up mortgage loan provided by HS, D(P&D)/HS advised that there was no deadline for application of the loan, except that owners concerned should allow 10 working days for HS to complete the approval process after they entered into any mortgage agreement with the banking institutions.

14. Mr Andrew CHENG expressed concern about the construction quality of the flats and asked if HS would consider extending the defects liability period from the current six months to one year. ED/HS affirmed that HS would take prompt action to rectify all the defects of the flats. Project consultants and an extra team of independent Building Surveyors would inspect every unit before they were handed over to purchasers. Furthermore, as HS would be responsible for the management of the Pinnacle, it would follow up and make good any latent defects reported by the owners at a later stage.

15. Noting that HS had to spend $20 million on rectification and improvement works, Ms CHAN Yuen-han asked if HS would recover the cost incurred from contractors concerned. In reply, ED/HS clarified that the majority of the $20 million had been used to install false ceilings in the kitchens as part of the improvement works initiated by HS. For making good of the defects, it was the contractual responsibility of the contractors who should bear the cost.

Highland Park

16. Mr LEUNG Yiu-chung considered it unfair to previous purchasers if HS lowered the sale prices of the remaining flats in Highland Park. ED/HS explained that HS would take into account buyers' affordability and property prices in both the public and the private sectors before reaching a decision on the sale prices of the remaining flats in Highland Park. The final price package had to be approved by the Housing Bureau. The Chairman however pointed out that according to a press report, HS had undertaken that it would not lower the sale prices of the remaining flats in Highland Park. D(P&D)/HS stressed that the only pledge made by HS was that the sale prices of the flats would not be lowered during the pre-sale period. The Chairman considered that HS should clarify the issue if this was not the case.

17. As to whether HS was aware of the construction of Government quarters near Highland Park, ED/HS replied that HS had not been informed nor consulted on the proposed project and HS had no knowledge of the construction of Government quarters. The information was therefore not included in the sales brochures of Highland Park. Given that the site of the Government quarters was quite far away from Highland Park, this should not pose a significant impact on the view of Highland Park. The Chairman was not convinced of ED/HS' response. He said that although HS might not be aware of the proposed project at the outset, it had the responsibility to look into the matter, in particular after the proposal had been submitted for consultation by the Kwai Tsing Provisional District Board. HS should have informed buyers concerned of the project before they signed the Sale and Purchase Agreements.

IV Re-housing policy for clearees of Temporary Areas
(LC Paper Nos. CB(1) 1060/98-99(01) and (02))

18. On the eligibility of unauthorized residents in Temporary Housing Areas (THAs) for PRH, the Chief Housing Manager/Redevelopment (CHM/R) explained that when the prevailing re-housing policy for clearance of THA was endorsed on 23 September 1995, the former Management and Operations Committee of HA decided that a more lenient approach should be applied to all unauthorized residents in THAs who could provide evidence on their continuous residence before the announcement of clearance of their THAs. They were assumed to be eligible for the allocation of THA space and would therefore be given direct offer of PRH after moving into another THA. Such an arrangement was to take account of the inconvenience caused to these residents as a result of the implementation of the policy. For other unauthorized residents who moved in THAs after the announcement of clearance, they were required to register on WL in order to be eligible for PRH. CHM/R advised that WL was the main stream for people to gain access to PRH, and the re-housing policy was to eliminate the possibility of queue jumping and to ensure equity in the allocation of public housing resources. In reply to the Chairman's question, CHM/R confirmed that the aforesaid arrangements were approved as part of the re-housing policy. To facilitate a better understanding, CHM/R undertook to provide a copy of the relevant supporting documents for members' reference.

    (Post-meeting note: The required information was circulated vide LC Paper No. CB(1) 1223/98-99.)

19. On the eligibility of former occupants of unauthorized rooftop structures and squatter areas for PRH, CHM/R advised that only those who were affected by clearance operations with clearance date announced on or before 23 September 1995 and subsequently re-housed to THA were eligible for direct offer of PRH. Other occupants of squatter areas and unauthorized rooftop structures who moved in THAs as a result of clearance announced after that date were required to register on WL for PRH. Mr LEUNG Yiu-chung questioned if the eligibility for PRH could base on the duration within which the occupants lived in the squatter areas or rooftop structures. BD/A&M clarified that not all squatters were eligible for re-housing to PRH upon clearance. Only those who had been registered in the Squatter Control Occupancy Survey carried out by the Housing Department (HD) in 1984/85 would be eligible for direct offer of PRH in the event of clearance. A pre-clearance survey would be conducted to register the squatters on the date when the survey notice was put up. Likewise, HD would conduct pre-clearance freezing survey on the day when the Building Department (BD) served a Notice of Intention (NOI) to occupants of unauthorized rooftop structures. Affected clearees would be re-housed to PRH or interim housing (IH) according to their eligibility.

20. Mr LEUNG considered it unfair that HD should take the date of NOI as the clearance announcement date for squatter areas and unauthorized rooftop structures. He was of the view that HD should take the date of the earliest Statutory Order served by BD as the clearance announcement date. BD/A&M explained that as the Statutory Order was only a reminder to the owners of the unauthorized structures to demolish the structures and to remove the affected occupants, the date upon which such Statutory Order was served should not be taken as the clearance announcement date. To facilitate members' understanding, BD/A&M tabled a few samples of Orders issued by BD under the Building Ordinance.

    (Post-meeting note: The samples of Orders were subsequently circulated vide LC Paper No. CB(1) 1073/98-99(07).)

21. BD/A&M stressed that the objective of the prevailing re-housing policy was to prevent people from building illegal rooftop structures or squatter huts indiscriminately as a short-cut for re-housing to THAs and later to PRH upon THA clearance. CHM/R added that if the re-housing policy was not in place, households moving in THAs as a result of clearance of unauthorized rooftop structures or natural disasters would be directly re-housed to PRH when all THAs were demolished by mid-2000. It would not be fair to applicants on WL if these households could be re-housed to PRH by virtue of clearance albeit a short waiting time. He assured members that HA had explained clearly to all households before admission into THAs their re-housing eligibility upon future clearance. At the time of intake, the households were requested to sign a declaration form reminding them that they had to register on WL and would only be allocated PRH flats when their WL applications matured. If their WL applications had not yet matured at the time of clearance of THAs, they would only be re-housed to IH. Mr LEE Cheuk-yan expressed concern about the inconvenience caused by "double moves" if THA residents were required to move to IH upon clearance of THAs and later to PRH within a short time. He asked if the Administration would consider offering PRH to THA residents direct taking into account the fact that most of THA residents had been previously affected by clearance operations. BD/A&M took note of Mr LEE's concern and advised that PRH flats would be allocated to residents whose WL applications would be matured within 12 months upon clearance of their THAs. On IH, Mr LEUNG expressed worries that the remote locations of IH would cause undue disruptions to clearees' livelihood. BD/A&M responded that IH was only a transient accommodation. Residents moving to these blocks, which were all quality high-rise blocks, could enjoy a better living environment than that in THAs.

22. Given the limited number of 1,800 THA households which were not eligible for direct offer of PRH, Ms CHAN Yuen-han considered that the Administration should adopt a more lenient approach on these households taking into account their individual circumstances under which they were admitted to THAs. Moreover, there might be cases where some households had lost their eligibility for PRH as a result of the misleading information provided by HD. CHM/R advised that of the 1,800 households referred to, some 200 were former occupants of unauthorized rooftop structures, others were victims of natural disasters, unauthorized PRH occupants and former PRH tenants displaced as a result of divorce or splitting of tenancy etc. They were admitted to THAs because they were not eligible for PRH. He stressed that these households had signed a declaration form printed in Chinese confirming their understanding that they were not eligible for direct offer of PRH except through WL. It was therefore unreasonable for households concerned to overturn their confirmation now. Ms CHAN remained of the view that the same lenient approach applicable to those unauthorized THA residents who could provide evidence on their continuous residence before the announcement of clearance of their THAs should similarly apply to these 1,800 households. BD/A&M cautioned about the far-reaching implications if the Administration were to offer preferential re-housing arrangements to some of these households. By way of illustration, illegal squatting would be expected to increase if those who were former occupants of unauthorized rooftop structures or squatter areas were given direct offer of PRH upon clearance of their THAs. Mr LEUNG was not convinced of the Administration's explanation. Given that discretionary arrangement had already been made for THA residents to move to PRH if their WL applications matured within 12 months, he insisted that the Administration should adopt a lenient approach and re-consider the re-housing arrangements for the 1,800 households taking into account their individual circumstances.

23. The Chairman remarked that HD's action on the implementation of the policy approved on 23 September 1995 had created inequalities among THA residents. He urged that the Administration should explore more feasible means to re-house THA residents to PRH given that some of these residents might have been living in THAs for a very long time.

V Any other business

24. There being no other business, the meeting ended at 1:25 pm.

Legislative Council Secretariat
2 July 1999