Provisional Legislative Council

PLC Paper No. CB(1) 146
(These minutes have been
seen by the Administration)

Ref : CB1/PL/HG/1,

Panel on Housing and
Panel on Planning, Lands and Works

Minutes of joint meeting held on Thursday, 24 July 1997,
at 10:45 am in the Chamber of the Legislative Council Building

Members present :

Members of Housing Panel

Hon CHAN Yuen-han (Chairman)
Hon WONG Siu-yee
*Hon HO Sai-chu, JP
Hon Edward HO Sing-tin, JP
Hon Mrs Selina CHOW, JP
Hon CHEUNG Hon-chung
*Hon LEUNG Chun-ying, JP
Hon HUI Yin-fat, JP
Hon CHAN Kam-lam
Hon Kennedy WONG Ying-ho
*Dr Hon Charles YEUNG Chun-kam
Hon LAU Kong-wah
*Hon CHOY Kan-pui, JP
Dr Hon TANG Siu-tong, JP
*Hon Timothy FOK Tsun-ting

Members of Planning, Lands and Works Panel

Hon Edward HO Sing-tin, JP (Chairman)
Hon KAN Fook-yee (Deputy Chairman)
Dr Hon Raymond HO Chung-tai, JP

Members absent :

Members of Housing Panel

Hon Frederick FUNG Kin-kee (Deputy Chairman)
Hon David CHU Yu-lin
*Hon Ronald ARCULLI, JP
Hon CHAN Choi-hi
*Hon CHENG Kai-nam
Hon Andrew WONG Wang-fat, JP
Hon Bruce LIU Sing-lee
Hon TAM Yiu-chung, JP

Members of Planning, Lands and Works Panel

Hon IP Kwok-him
Hon LAU Wong-fat, JP
Hon NGAN Kam-chuen

* Also members of the Planning, Lands and Works Panel

Public officers attending :

Housing Bureau

Mr Andrew Wells,
Deputy Secretary for Housing

Principal Assistant Secretary (Housing Strategy) (Acting)

Planning, Environment and Lands Bureau

Mr Patrick LAU,
Deputy Secretary for Planning, Environment and Lands (Lands and Planning)

Mr Francis NG,
Principal Assistant Secretary for Planning, Environment and Lands (Special Duty)
Lands Department

Mr Iain MacNaughton,
Government Land Agent/Headquarters (Acting)

Planning Department

Mr Sit Ming LAU,
Assistant Director of Planning (Housing and Land Supply)

Clerk in attendance :

Mrs Vivian KAM,
Chief Assistant Secretary (1)2

Staff in attendance :

Mr Matthew LOO,
Senior Assistant Secretary (1)4 (Atg)

I.Election of Chairman

Hon CHAN Yuen-han was elected Chairman of the joint-Panel meeting.

II.Land Supply for the Next Five Years

2.The Chairman welcomed members and representatives from the Administration to the joint-meeting which was called to discuss the subject of 'land supply for the next five years' in the light of recent announcements by the Administration. The subject was also related to the agenda item of 'Pledge for annual provision of 85,000 flats' scheduled for discussion by the Housing Panel immediately following the joint-meeting. She thanked the Administration for the brief information notes on the terms of reference, membership and areas of priority of the Steering Committee on Land Supply for Housing, and the Land Disposal Programme tabled at the meeting.

(Post-meeting note: The information notes were issued after the meeting to members vide PLC Paper No. CB(1) 87.)

3.At the Chairman's invitation, the Deputy Secretary for Planning, Environment and Lands (DS for PEL) advised that, with a view to increasing transparency, the Administration had released the Five Year Land Disposal Programme which comprised of the land sales programme for the 21-month period between July 1997 and March 1999, and the forecast of land supply for the following three years between April 1999 and March 2002. Members then deliberated on the following issues.

Readiness of land

4.In response to Hon CHAN Kam-lam on the degree of readiness for development of the 157 hectares (ha) and 276 ha of land listed in the Land Disposal Programme, the Principal Assistant Secretary for Planning, Environment and Lands (PAS for PEL) explained that some of these were serviced land while others would require site formation. To safeguard the schedule for completion, the Government would specify in the conditions for land grant a period of three to four years for completion of the superstructure. Failure to comply with such requirements would attract building fines on an incremental basis based on the value of the land; for serious offences, the Government could retrieve the piece of land altogether.

5.Hon HUI Yin-fat was of the view that the penalty was not of sufficient deterrent effect as most developers would treat this as part of the operation costs. The important point was to ensure the sale of flats in the market immediately upon completion. PAS for PEL said in response that the sale of flats was a commercial decision. He further pointed out that developers withholding such sales would have to bear resultant financial costs such as interest, management and maintenance costs, rates and Government rent.

6.Hon CHEUNG Hon-chung also stressed the importance of sufficient transport and infrastructural facilities for land to be disposed, and made reference to criticisms by the Housing Authority (HA) on the lack of such facilities for land approved for the HA. As low density residential areas constituted 42% of the areas shown in the Programme and yet could only generate about 10% of the total number of flats, he enquired if consideration had been given to increasing and optimizing the plot ratio, including re-designating low density areas at the fringe of new towns as higher densities.

7.The Assistant Director of Planning (Housing and Land Supply) (AD of P) briefly explained the principles of town planning. Residential areas had different density zonings - high, medium and low. Some areas could not sustain high density development owing to inadequate transport, infrastructure and community facilities. As regards planning for new towns, town centres would normally comprise high density areas and the development densities gradually decreased towards the fringe. The above factors, together with the housing aspiration of residents, would usually be taken into consideration in assessing the intensity of housing development.

8.DS for H drew attention to the availability of funds under the Capital Works Reserve Fund for providing necessary support facilities to land which had been identified as being suitable for housing development. DS for PEL added that the Secretary for Housing (S for H) had written to the LegCo Panel on Housing in May 1997 to explain that land for the HA were not necessarily fully formed and that this should help the HA to expedite rather than inhibit flat production as this would minimize the interfacing problems of planning and preparatory work, and construction of basic infrastructure. The same also applied to land disposed to the private sector.

Lead time for construction of flats

9.In referring to the estimated flat production listed in the Land Disposal Programme, Hon Edward HO highlighted the fact that this had not reflected the lead time of at least three years for construction of flats. A breakdown of the annual number of flats to be completed between now and 2004/05 would be necessary to give a realistic picture on the availability of flats. DS for PEL undertook to provide the information in writing. He added that land disposed of between 1994/95 and 1996/97 together with redevelopment during this period would be sufficient to generate 231,000 units between 1997/98 and 1999/2000, while land disposal and redevelopment between 1997/98 and 2001/02 would generate 526,000 units between 2000/01 and 2004/05. This would make up an estimated number of 757,000 public and private sector flats between now and 2004/05.Admin

10.In response to Hon Edward HO on the estimated supply of 231,000 flats between 1997 and 2000, the Deputy Secretary for Housing (DS for H) said that this accorded with targets of the HA and the Housing Society (HS) already announced. As regards the capacity estimate of 100,000 flats quoted by the Financial Secretary (FS), a breakdown would roughly be 50,000 public rental housing (PRH) /Home Ownership Scheme (HOS) units, 10,000 Private Sector Participation Scheme (PSPS) units, 36,000 private sector flats (20,000 from new lease, 16,000 from redevelopment and lease modification) and some 5,000 Sandwich Class Housing (SCH) units. The Administration was fully confident that the specific target announced by the Chief Executive of building a total of at least 85,000 flats a year (beginning in 1999-2000) would be achieved.

Steering Committee on Land Supply for Housing

11.Hon Mrs Selina CHOW was also concerned about the lead time for construction of flats, and requested the Administration to provide a detailed list on the lead time taken for construction of flats in the past three years setting out the time taken for complying with requirements by different departments from the planning, transport, infrastructure, environment and other angles, as well as a forecast of the lead time in the future to make possible a like with like comparison. She further enquired about courses of actions for minimizing delays caused by competing requirements of departments concerned.Admin

12.DS for PEL explained that a lead time of three years was assumed for construction of flats after the execution of the land grant. As regards requirements of different departments, the FS had announced at the press briefing following the meeting of the Steering Committee on Land Supply for Housing on 16 July 1997 that the Committee was determined to eliminate all obstacles in order to achieve the production target. On whether the Committee would take into account views of the private sector, DS for PEL advised that the Secretary for Planning, Environment and Lands had met with all relevant professional bodies including the Real Estate Developers Association in early 1997 prior to the formation of the Steering Committee and consulted them on the subject. Their views had been duly incorporated in papers for the Committee prepared by the Planning, Environment and Lands (PEL) Bureau.

13.Hon Edward HO asked for the work schedule of the Steering Committee, and on whether the Committee would make known its recommendations for simplifying the construction process and expediting lead time, and also publish interim progress reports. He added that he had written to the FS previously but had not received a reply. DS for PEL clarified that the Committee was serviced by a secretariat independent of PEL Bureau, and any views which members or the public might have on the work of the Committee could be forwarded to the secretariat. According to his understanding, the Committee had not set any time limit for completing its tasks but would deal with problems as they arose. The Committee would report on its progress of work and conclusions through the Policy Address of the Chief Executive in October 1997, and the S for H would take over chairmanship of the Committee in early 1998. At Hon Edward HO's request, DS for PEL undertook to relay his request to FS for the Committee to report progress to Provisional Legislative Council (PLC) Members.Admin

Land Disposal Programme

14.In referring to the Land Disposal Programme, Hon KAN Fook-yee pointed out that the list did not include lease modification cases and conversion of farmland to residential sites, and suggested that these should also be included upon planning approval being given in the future. He enquired if the Lands Department had a performance pledge for processing applications for lease modifications and change of land use, and if the Administration would conduct a review for simplifying environmental and town planning processes.

15.On the first point, AD of P explained that the Planning Department had prepared many rural outline zoning plans to guide development in rural areas. If developers wanted to modify the land use to suit their projects, they would always be welcomed to discuss with the Planning Department. With regard to the processing of development applications, there was a statutory requirement under section 16 of the Town Planning Ordinance for the Department to submit both an application and the Department's assessments within two months after receipt of the application. When considering such applications, the Town Planning Board might request additional information from developers the preparation of which would take time. On the second point on performance pledge, PAS for PEL said that the issues were complex and the parties and legal documents involved were many; furthermore, consultation was often necessary. As such, it was not possible to give specific performance pledges as suggested. He supplemented that straightforward cases normally took one year to complete, but longer time would be required for complicated cases such as those involving calculation of land value. DS for PEL undertook to address the member's concern and convey his views to the Steering Committee.Admin

16.Hon Kennedy WONG enquired if flexibility would be provided in the Programme and if contingency plans were available to cope with changes in housing demand as a result of increase in returning immigrants, which totalled over 100,000 in 1995, as well as well-off households from mainland China. In response, DS for PEL said that land was not a commodity that could be produced readily and its supply was understandably restricted. He advised that the FS had undertaken to announce annually a five-year rolling supply programme and this would take into account factors such as changes in population and housing aspirations.

Forecast of supply of flats

17.Dr Hon TANG Siu-tong was concerned that the forecast in supply of 146,000 flats in five years would be insufficient to meet the Chief Executive's pledge for an annual provision of 85,000 flats. Hon CHAN Kam-lam also pointed out that notwithstanding the Administration's forecast of the supply of flats over the eight-year period between 1997/98 and 2004/05 of 757,000, the Programme showed that flats to be generated from sale of Government land between July 1997 and March 2002 would only number 146,000. He requested the Administration to provide in writing details to reconcile the differences so as to assure members that sufficient land would be provided for flat production purpose; such details should include lease modification cases and flats to be produced from land banks currently in the hands of developers. He was of the view that such information should be available as Government should already be processing applications for development from some developers. Admin

18.DS for PEL undertook to provide the requisite information and highlighted the fact that the 433 ha of land quoted in the Programme referred only to sale of Government land. Some land held by developers might not be ready for development and developers would need to seek the necessary planning approval. Hon LEUNG Chun-ying supplemented that flats to be provided by private developers would account for the difference between the demand and estimated supply of flats.

19.In view of slippages in the housing production target in recent years, Dr Hon Charles YEUNG requested the Administration to provide details on the original targets for public rental housing, subsidized housing as well as private sector flats in the past five years; how far these were achieved in each of the five years together with the reasons for slippages; and on how the deficiencies would be made up for in the coming five years.Admin

20.In response, DS for H updated members on relevant data and undertook to provide more details in writing. The Administration had made performance pledges between 1994-1996 to provide 141,000 public rental housing, 75,000 subsidized housing, and 24,000 Sandwich Class Housing flats by the year 2001. The Administration was confident of meeting these targets. Details of the production targets had been announced in the Public Housing Development Programme. Applicants on the waiting list for public rental housing currently had to wait for about six-and-a-half years for a flat, although it was estimated that only about 80,000 of the 150,000 applicants on the waiting list were qualified. The Administration had made a performance pledge to reduce the waiting time to below five years, and the Chief Executive had pledged to further reduce this to three years. These were developments in the right direction.

Property prices

21.On the pledge for providing 85,000 flats annually, Hon WONG Siu-yee enquired about the basis of the estimate and questioned if the Administration had made any assessments on its effects in reducing property prices. He quoted the example of prices for Home Ownership Schemes and cautioned the Government against taking the lead in property speculation. DS for H emphasized that the property market in Hong Kong was a free market. The Administration would aim to stabilize property prices without interfere directly with price levels. As regards the pledge of 85,000 units, this was related to the forecast flat production requirement of 80,000 generated from the housing demand model prepared by the Working Group on Housing Demand led by the Planning Department. He said that the Government was not taking any part whatever in property speculation. The major principle in setting prices for Home Ownership Schemes was the consideration of applicants' affordability.

Role of legislators

22.Hon LEUNG Chun-ying said that housing was a high priority area of the Chief Executive. He recalled that he had suggested discussion of the agenda item at the first joint-meeting after the establishment of the Hong Kong Special Administrative Region as he was hopeful that the three related Panels of Housing, Planning, Lands and Works, and Environmental Affairs would join efforts in the subject of 'built environment'. He held the view that the legislative body should be assuming a different role than before. In accordance with provisions in the Basic Law, the Executive and the Legislature should regulate each other and co-ordinate each other's activities, with the emphasis on the latter. As such, the Legislature should co-ordinate with the Executive in working out a schedule for lands, works and housing programmes in the remaining nine to ten months of the PLC.

23.In continuing, Hon LEUNG Chun-ying said that the establishment of many panels and regular meetings were in his view unnecessary. Furthermore, the proceedings of the meetings should not be in the form of questioning Government officials nor seeking data and clarifications. Instead, panel meetings should be held for the purpose of enabling the Executive to brief the Legislature on necessary legislative amendments and to solicit support from the Legislature on issues such as harbour reclamation and urban renewal programmes. He saw a need for a review of the practices and procedures for panels.

24.The Chairman advised that members of the Environmental Affairs Panel had been informed of the joint-Panel meeting. She stressed that PLC Members had a monitoring role and it was for the Executive to brief Members on the legislative time-table, and legislative and financial proposals, although support of the Legislature might not always be forthcoming depending on the merits of the cases. Where issues of major concern were raised, these could either be dealt with by subcommittees of panels or through joint-panel meetings. As regards the suggestion on panels and their proceedings, the Chairman advised Hon LEUNG Chun-ying to raise it with the House Committee.

25.Hon Mrs Selina CHOW said that Hon LEUNG Chun-ying being the Chief Executive's adviser on housing policy might be more knowledgeable on the subject than Panel members. It was necessary for PLC Members to ask questions to obtain information in order to co-ordinate with the Executive and to effectively discharge Members' monitoring duties. She hoped that Hon LEUNG Chun-ying was not suggesting that Members should perform a rubber-stamping role. She added that the Rules of Procedure provided for joint-panel meetings which were appropriate avenues for discussing issues of major and common concern and other interested panel members could also be invited to join in the discussions. Where the topics were peculiar to a particular panel, these could be taken up by the respective panel.

26.Expressing similar concerns, Hon CHAN Kam-lam emphasized that Members had no intention whatsoever to put pressure on Government officials. Panel meetings served multi-purposes of enabling Members to seek information, ascertain progress, convey views and monitor developments. If the Executive were expedient in providing the requisite information, it would facilitate co-ordination and co-operation between the Executive and the Legislature.

27.In response, Hon LEUNG Chun-ying said that the format of discussion of joint-panel or single-panel meeting was not important; the crux was the content of the discussion, mutual understanding and the work schedule for the coming months. He also urged Members to be more forward looking.

28.Pointing out that many criticisms were unjustified, Hon Edward HO said that panels had had good relationships with the Administration all along. Panels would normally suggest items for discussion and consult the Administration on whether the items were ready for discussion; examples included town planning issues and harbour reclamation. As PLC Panels were only formed two days ago on 22 July 1997, time did not allow the drawing up of a schedule of programme. He re-iterated that there had been mutual understanding between the Executive and the Legislature in the past, and felt that the practices were neither wrong nor was there a need for change.

29.Hon Mrs Selina CHOW said that the discussions affirmed the need for panels. Public interest was a common objective and was as important as urgent proposals from the Administration. The dual roles of PLC Members in co-ordinating and monitoring Government policies and activities should co-exist. The Administration had to accept that Members would not always agree with its recommendations. If Members disagreed with grounds certain objectives of the Administration, discussions would always be necessary.

III.Any other business

30.Members agreed that the two Panels would follow-up on the subject of land supply in another joint-meeting to be arranged after consultation with the two Chairmen and Panel members.

31.The meeting ended at 12:40 pm and was followed immediately by a meeting of the Housing Panel.

Provisional Legislative Council Secretariat
14 August 1997