Legislative Council

LC Paper No. CB(1) 683/98-99
(These minutes have been seen
by the Administration)

Ref: CB1/PL/HG/1

Panel on Housing

Minutes of meeting
held on Monday, 2 November 1998, at 4:30 pm
in the Chamber of the Legislative Council Building

Members present :

Hon LEE Wing-tat (Chairman)
Hon Gary CHENG Kai-nam (Deputy Chairman)
Hon David CHU Yu-lin
Hon HO Sai-chu, JP
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 James TO Kun-sun
Hon CHAN Yuen-han
Hon CHAN Kam-lam
Hon LEUNG Yiu-chung
Hon Andrew WONG Wang-fat, JP
Dr Hon YEUNG Sum
Hon LAU Kong-wah
Hon Andrew CHENG Kar-foo
Hon TAM Yiu-chung, JP

Members absent :

Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon Ronald ARCULLI, JP
Hon Christine LOH
Hon Timothy FOK Tsun-ting, JP

Public officers attending :

For item IV

Housing Bureau

Miss Sandy CHAN,
Principal Assistant Secretary

Housing Department

Business Director/Allocation and Marketing

Mr Andrew LAI,
Head of Corporate Strategy Unit (Acting)

For item V

Housing Bureau

Mr Andrew Wells,
Deputy Secretary for Housing

Housing Department

Business Director/Allocation and Marketing

Assistant Director (Applications & Home Ownership)

Mr Andrew LAI,
Head of Corporate Strategy Unit (Acting)
Clerk in attendance :

Ms LEUNG Siu-kum,
Chief Assistant Secretary (1)2
Staff in attendance :

Miss Becky YU,
Senior Assistant Secretary (1)3
I Confirmation of minutes of previous meeting
(LC Paper No. CB(1) 390/98-99)

The minutes of the meeting held on 16 September 1998 were confirmed.

II Information paper issued since last meeting

2. Members noted that no information papers had been issued since last meeting.

III Date of next meeting and items for discussion

3. The next regular meeting would be held on Monday, 7 December 1998, at 4:30 pm to discuss the following:

- Rent reduction for commercial premises in public housing estates; and

- Tenants Purchase Scheme.

(Post-meeting note: At the request of the Administration, an additional item on "Funding support for clearance of Temporary Housing Areas and Cottage Areas" was subsequently included in the agenda for the meeting.)

IV Policy on squatter areas
(LC Paper No. CB(1) 391/98-99(01))

Implications of the new income-cum-asset test

4. Members noted that apart from the no domestic property ownership rule, clearees in previous squatter clearance operations were not subject to any means test before admission to public rental housing (PRH). It was therefore unfair that existing squatters had to undergo the new income-cum-asset test to establish their eligibility for PRH upon clearance. The Business Director/Allocation and Marketing (BD/A&M) advised that as PRH was heavily subsidized by the community, it was essential to ensure that the limited public housing resources were only allocated to those in genuine need. The income-cum-asset test was therefore necessary to identify the housing needs of PRH applicants. The extension of the test to squatters was to ensure consistency in re-housing policy and to facilitate rational allocation of housing resources. Nevertheless, not all squatters were required to undergo the income-cum-asset test. Those who would be affected by clearance operations announced before the introduction of the income-cum-asset test on 11 September 1998 would be exempted from the test. A member however pointed out that despite such an exemption, those squatters displaced by clearance operations and re-housed to Temporary Housing Areas or Interim Housing would still have to undergo the income-cum-asset test before they were eligible for PRH.

5. Some members cautioned that the imposition of a cut-off date for exemption would create inequalities among squatters, in particular those living within the same squatter area where only part of the area was subject to clearance. The Principal Assistant Secretary for Housing (PAS for H) responded that although some people might not be able to benefit from the introduction of new policies, it did not mean that such policies were unfair. She stressed that the proposal of adopting a common set of eligibility criteria for PRH, including means testing, was covered in the Long Term Housing Strategy Review (LTHSR) consultative document which had undergone intensive public consultation. The majority of the public had expressed support to the proposal. Addressing a member's question on the number of squatters expected to become ineligible for PRH after the implementation of the income-cum-asset test, BD/A&M replied that HD did not have information on the assets owned by squatters. However, according to past experience, about 50% of squatters were not eligible for PRH at the time of detailed vetting. It was anticipated that more squatters would choose other forms of housing assistance in the event of clearance following the implementation of the test.

6. Mr Fred LI considered it unfair that some squatters registered in the 1984/85 Squatter Occupancy Survey had been re-housed to PRH while those registered in the 1982 Squatter Control Survey were still waiting for resettlement and were subject to the income-cum-asset test. He was of the view that in order to ensure impartiality, the older the squatter area, the earlier the Administration should carry out clearance operations. In response, BD/A&M clarified that the objective of the 1982 Squatter Control Survey was to control illegal occupation of unleased and undeveloped government land or leased agricultural land. Structures registered in the survey were temporarily tolerated until such time when removal was deemed necessary. In planning clearance operations, priority would be given to clear squatter areas where the sites were required for urgent development purposes or where the safety of the structures were at stake. The length of existence of squatter areas was not a consideration factor for clearance. BD/A&M added that squatters must be registered in both surveys and means tested to establish their eligibility for PRH upon clearance to ensure that public housing resources were allocated on the basis of genuine need. Nevertheless, as it was the Government's policy that no one would be rendered homeless as a result of clearance operations, displaced squatters who were not covered by the surveys would be offered Interim Housing in accordance with the prevailing eligibility criteria.

7. Members remained unconvinced that squatters should be required to undergo the income-cum-asset test. Some members considered the offer of re-housing to PRH was in fact a form of compensation to squatters for resumption of land for clearance. They urged the Administration to review the overall re-housing policy in order to minimize the resistance from squatters. BD/A&M replied that the majority of clearees were satisfied with the re-housing arrangements, under which their living conditions could be significantly improved. Furthermore, squatter clearance had made available substantial amount of land for development.

8. As to whether persons in private premises who were involved in fires or natural disasters were required to undergo the income-cum-asset test to establish their eligibility for PRH, BD/A&M advised that victims in need would be arranged to stay in temporary shelters or transit centres. Their eligibilities for re-housing would be investigated by staff of HD. Those who had been registered on the Waiting List (WL) and whose turn for allocation would come up within 12 months would be re-housed to PRH, subject to the income-cum-asset test.

Squatters on government land, private land and mixed lots

9. Since not all residents of squatter areas would favour clearance, such as those of the Telegraph Bay Village in Pokfulam, a member asked if the Administration would consider not to clear these squatter areas unless clearance was deemed necessary on safety ground. This would help to save the re-housing resources for allocation to other committed categories. PAS for H took note of the member's concern but advised that the current squatter clearance programme was drawn up in accordance with the clearance policy stated in the LTHSR White Paper. It was anticipated that some 12,000 families would be re-housed over the next five years through the programme. In the case of Telegraph Bay Village, BD/A&M advised that this was built on government land. As pledged in the 1992 Policy Commitments, the Administration had to offer re-housing to all urban squatters on government land by March 1996. The majority of residents of Telegraph Bay Village had accepted the re-housing offers except some 45 households were permitted to remain. Nevertheless, the Administration would consider it necessary to clear the squatter area if it was required to develop the area for a public purpose or for safety reasons.

10. As regards squatter areas on private land, BD/A&M advised that these would only be cleared after the land had been resumed for a public purpose and subject to the availability of re-housing resources. Under such circumstances, the Government would ensure that the owners of the land and properties were fully compensated. A member however pointed out that squatters who were not owners of the properties would not be eligible for compensation. In reply, BD/A&M assured the member that they would be treated as if they were squatters on government land.

11. Noting that clearance of squatter areas on mixed lots would not be initiated unless there was a plan for the land to be resumed for a public purpose, members expressed concern that the Administration would make use of such a provision and adjust the clearance boundary to procrastinate clearance operations in the event of insufficient re-housing resources. At members' request, the Administration undertook to provide the following information:

- the respective squatter population on government land, private land and mixed lots;

- the basis upon which the clearance boundary of mixed lots was arrived at; and

- the ratio between government and private land for each of the squatter area on mixed lots involved in past clearance operations.

BD/A&M advised that there were at present about 20,000 urban squatters on mixed lots.

(Post-meeting note: The required information was circulated to members vide LC Paper No. CB(1) 578/98-99 on 7 December 1998.)

Squatter clearance programme

12. As to how the Administration could ensure confidentiality of the squatter clearance programme, BD/A&M explained that at the management level, only officers of Senior Housing Manager rank and above could have access to information on formal clearance. At the operational level, pre-clearance survey would be completed within the same day to prevent people from moving into the clearance zones.

13. A member asked if the Administration would notify squatters not included in the current clearance programme the estimated clearance time-frame of their squatter areas so that they could make necessary arrangements, such as renovation to ensure safety of the structures. BD/A&M advised that reference could be drawn to the handbook for repair and rebuilding of squatter structures which had been issued to all squatters.

V Waiting List for allocation of public housing rental flats
(LC Paper No. CB(1) 391/98-99(02) and (03))

14. On eligibilities, Mr Albert HO considered the PRH eligibility criteria discriminatory since under the majority rule, PRH applicants with local born children were given priority over those with Mainland-born children in the allocation of PRH. He questioned if such an arrangement was in conformity with the Hong Kong Bill of Rights Ordinance since according to Article 24 of the Basic Law, children of permanent residents of Hong Kong born outside Hong Kong should have the same rights as those born locally. BD/A&M replied that the Administration had sought legal advice in this respect which confirmed that the majority rule did not contravene any existing legislation. Besides, families which did not meet the requirement could still register on WL. Their turn for allocation of PRH would come up when the majority of the family members had resided in Hong Kong for seven years. Mr CHAN Kam-lam asked if the Administration would consider relaxing the majority rule having regard to the large number of Mainland immigrants coming to Hong Kong in recent years. He cautioned that as most of these immigrants were low income families and had an urgent need for PRH, they would tend to give birth to more children in Hong Kong in order to meet the majority rule. While acknowledging the member's concern, the Deputy Secretary for Housing (DS for H) emphasized that it had been the Government's policy to allocate PRH to local born people with priority. Any change to this would inevitably affect the average waiting time for PRH and would be unfair to the existing applicants on WL.

15. On applications from single-person applicants, DS for H advised that the current average waiting time for single-person PRH flats was eight to nine years. The long waiting time was attributable to the limited supply of these flats. Moreover, as elderly persons were given priority in the allocation of single-person PRH flats, other applicants would have to wait longer. At present, allocation would be made within two years if the elderly persons agreed to share a flat with another related or unrelated elderly person or three years if they chose to live on their own. BD/A&M supplemented that efforts had been made to increase the supply of these flats over the next few years. These included reviewing the flat mix in new PRH estates and converting small PRH flats to single-person flats. The ultimate goal was to reduce the average waiting time for all categories of PRH applicants to three years by 2005. Members however anticipated that the waiting time for single-person flats would be above average.

16. On allocation, BD/A&M advised that under the Compassionate Quota, 2,000 PRH flats had been earmarked for compassionate re-housing. Applicants with compassionate grounds could be re-housed to these flats within four weeks, subject to recommendations from the Director of Social Welfare. In reply to a related question, BD/A&M confirmed that PRH applicants displaced by clearance and redevelopment programmes would be given priority in re-housing if their applications were due for allocation within the coming 12 months.

17. On average waiting time for PRH, members were not optimistic that the Administration could reduce the average waiting time to three years by 2005 in view of the large number of 140,795 applicants on WL. The situation would be further aggravated having regard to the annual addition of some 30,000 new applications to WL which had far exceeded the annual provision of 20,000 PRH flats under the pledge. DS for H explained that as there were no restrictions for registration on WL, this gave rise to a distorted picture on the number of families in genuine need. According to past experience, only 40 to 50% of applicants were eligible for PRH upon detailed vetting. Moreover, as some WL applicants would have been re-housed to PRH through other categories during the course, the annual provision of 20,000 PRH flats should be sufficient to meet the demand. Coupled with the reduction in production time for PRH and the impending completion of the Comprehensive Redevelopment Programme, DS for H was confident that the supply of PRH over the next five years would be substantially increased, and that the average waiting time for PRH could be reduced as pledged. To ascertain the supply and demand of PRH flats, the Administration was requested to provide information on the changes of WL over the past few years. BD/A&M replied that these figures might not be reliable in view of the low flat production rate over the period.

18. A member was of the view that the Administration was using the income-cum-asset test to drive out WL applicants in order to reduce the average waiting time. DS for H reiterated that the objective of the test was to ensure equity, rather than to reduce the waiting time by an arbitrary amount. Furthermore, the Administration would not know how many WL applicants would fail the test as it did not have information on the assets owned by applicants.

19. As to whether the Administration had taken into account demographic changes, such as the increase in Mainland immigrants, in assessing housing demand, DS for H assured members that all projections derived from the computerized housing demand model would be under regular review and adjustments in the light of changing circumstances, such as demographic changes. Furthermore, a Survey of Housing Aspirations of Households would be conducted in 1999 with a view to deriving new projections on housing demand. Apart from the measures pledged under LTHSR to ensure sufficient supply of flats to meet demand, the Steering Committee on Supply of Land for Housing would continue to identify suitable land for the land bank and to monitor the land supply in the market. A site-specific approach had also been adopted to monitor the progress of each housing site to ensure timely delivery of flats.

20. As any underestimation in housing demand would affect the entire flat production programme, the Chairman considered that sufficient information should be obtained from the Administration so that the Panel could monitor the flat production programme at an early stage. He remarked that members who wished to seek further information on WL were requested to forward their concerns to the Secretariat for onward transmission to the Administration.

(Post-meeting note: A letter enlisting members' concerns was issued to the Administration on 11 November 1998.)

VI Any other business

Re-housing of bedspace apartment dwellers

21. To follow up on the issue, the Clerk was requested to prepare a research paper on the subject for members' discussion at a future meeting. Clerk

22. There being no other business, the meeting ended at 6:35 pm.

Legislative Council Secretariat
28 December 1998