Source: Hong Kong Government special administrative region
Following is a question by the Hon Yang Wing-kit and a written reply by the Secretary for Development, Ms Bernadette Linn, in the Legislative Council today (July 15):
Question:
There are views that the problem of ageing buildings in Hong Kong is becoming increasingly acute, and that the Government should actively promote building rehabilitation and accelerate the pace of redevelopment in old districts, so as to facilitate the replanning of such districts and improve the living environment of the public. In this connection, will the Government inform this Council:
(1) given that the Urban Renewal Authority (URA) adopts a “dynamic management” strategy to appropriately adjust the planning and pace of implementation of different projects in the light of market situations and building conditions, whether the Government knows the specific assumptions adopted by the URA when conducting financial stress tests to maintain its financial soundness, as well as the respective objective quantitative indicators (e.g. the projected amount of loss, the minimum cash flow threshold or the rate of decline in the property price index) used for assessing whether projects should be deferred or scaled down;
(2) in respect of large-scale redevelopment projects with high acquisition costs, such as the “13 Streets” project in To Kwa Wan, whether the Government knows if the URA will consider co-investing with developers for joint participation in such projects and flexibly adjusting tender conditions (including lowering upfront costs and optimising the profit-sharing ratio), and whether the Government will expedite the implementation of, and expand the application of the new planning guidelines on plot ratio transfer to large-scale urban redevelopment projects, so as to increase market incentives for participation in redevelopment;
(3) given that the Government currently relies on various non-recurrent schemes to promote building maintenance, whether the authorities will study the establishment of a permanent building rehabilitation fund that will receive capital injections from the Government and operate on a sustainable basis, with a view to promoting the transition from corrective maintenance to preventive maintenance; if so, of the details; if not, the reasons for that;
(4) whether the authorities will update the Hong Kong Planning Standards and Guidelines to cater for the redevelopment of old districts, including updating the requirements for parking spaces and electric vehicle charging facilities applicable to residential and retail uses, and mandating a proportional increase in community care facilities for the elderly and public green spaces in large-scale redevelopment projects, so as to address population ageing; if so, of the details; if not, the reasons for that; and
(5) given that the promotion of smart communities and models such as “single site, multiple use” involves multiple departments and complicated approval procedures, whether the Government will consider establishing a higher-level, cross-departmental steering committee to be led by an official at the Secretary of Department level and tasked with the specific responsibility of rationalising the approval processes for redevelopment and rehabilitation in old districts; if so, of the details; if not, the reasons for that?
Reply:
President,
The Government has all along been adopting a two-pronged strategy of rehabilitation and redevelopment to arrest urban decay, and the Urban Renewal Authority (URA) is our important partner in the urban renewal work. The URA has been taking forward the urban renewal work under the “planning-led and district-based” approach as promulgated under the Urban Renewal Strategy. The URA will re-plan the traffic routes, pedestrian facilities as well as greening and leisure areas, etc, within the district when implementing urban redevelopment projects, with a view to enhancing the planning benefits of the projects. Meanwhile, for building rehabilitation, the Government has allocated a total of $19 billion since 2018 for the URA to implement various building rehabilitation support schemes.
Having consulted the URA, our reply to various parts of the Hon Yang Wing-kit’s question is as follows:
(1) Under the Urban Renewal Authority Ordinance (Cap. 563), the URA is required to exercise due care and diligence in handling its finances, thereby maintaining a sound and healthy financial position in the long run. To cope with the challenges posed by the economic environment and property market situations on sustaining urban renewal, the URA will adopt a dynamic management approach to review, from time to time, the redevelopment projects which have commenced and/or are planned to commence the relevant redevelopment procedures and suitably adjust the planning and implementation pace of different projects to cope with the market situations and building conditions so as to allocate resources in a flexible manner. The URA will take into account a basket of factors, including its cash flow and financial conditions, global economic conditions, local property market trends, and the complexity and scale of the projects, etc, in assessing whether to adjust the pace of implementation of different projects, with an aim to striking a balance among maintaining its financial stability, effectively promoting the regeneration of old districts and addressing the expectations of the local community, to achieve its mission of carrying out urban renewal in a sustainable and orderly manner.
While the URA Board and its management are responsible for the URA’s day-to-day operational and financial management, the Government would oversee and provide steer over the URA’s work through means such as appointment to its Board, approval of the annual business plan/five-year corporate plan, and regular high-level liaison meetings with the URA. To maintain the momentum for urban redevelopment, the Government has been providing financial support to the URA, such as granting land resources to the URA at nominal land premium (the total amount of land premium forgone by the Government arising from this measure since the URA’s establishment is over $25 billion); granting Government, Institution or Community sites in the vicinity of suitable URA redevelopment projects to increase the overall development potential of the redevelopment project; as well as granting two sites at Bailey Street, Hung Hom and in Tseung Kwan O Area 137 to the URA by private treaty at nominal premium last year to help finance the redevelopment projects, etc.
(2) Upon title consolidation, the URA in general will put the redevelopment sites to the market for bidding by developers, so as to take forward the redevelopment projects in collaboration with the private sector. Before new projects are put to tender, the URA will, via the Development Facilitation Services, enhance the information transparency and communication with the market in a two-way manner. The URA can flexibly adjust the tender terms where necessary so as to enhance the project arrangements and increase the confidence of developers in submitting bids, such as introducing staged payment arrangement for tender amount, etc.
As for the planning tool of transfer of plot ratio, the Town Planning Board promulgated relevant planning guidelines for the pilot scheme in the districts of Yau Ma Tei and Mong Kok in July 2023, allowing the transfer of plot ratio between sites within the same district to provide incentives to the market to expedite the pace of urban redevelopment projects. The URA also adopted the concept of transfer of plot ratio in its Sai Yee Street/Flower Market Road Development Scheme in Mong Kok, which was commenced in 2024, by consolidating and transferring the development potential of several small and scattered sites to a larger site for mixed development, so as to enhance the planning gains and the commercial viability of the project. The Chief Executive’s 2025 Policy Address has also stated that in order to further incentivise the market to make use of the planning tool of transfer of plot ratio to expedite urban renewal, the Government will relax the existing arrangement to allow cross-district transfer of plot ratio and relax various arrangements under the original scheme, and this proposal will also apply to the URA’s projects. The Government has conducted consultation on this Policy Address’ proposal, during which relevant stakeholders’ views were collected, including the URA Board, professional bodies and industry associations, etc. Relevant stakeholders in general supported our proposed direction. Our target is to finalise and implement the relevant measures in the third quarter of this year.
(3) The Government has since 2018 introduced a number of building rehabilitation subsidy schemes in partnership with the URA, including the Operation Building Bright 2.0 (OBB 2.0). There is broad consensus that the OBB 2.0 helps support owners in carrying out major building maintenance works. Owners’ continued commitment to proper building maintenance will effectively extend the lifespan of buildings and alleviate pressure for redevelopment. The Government believes that it is worthwhile to continue providing subsidies to owners in need, and therefore announced in the 2026-27 Budget a comprehensive review of the OBB 2.0, which will draw on the past experience to formulate a new subsidy scheme. An amount of $3 billion has been earmarked for this purpose. We will complete the review and formulate the details of the new subsidy scheme by early next year, during which the Government will also consult the Panel on Development of the Legislative Council. Our review work will take into account the following:
(a) how to set more targeted eligibility criteria to enable more precise matching of resources with building maintenance needs (such as owners of “three-nil” buildings and those of old and dilapidated private buildings with lower financial ability);
(b) how to strengthen the implementation of the regulatory mechanism to ensure that subsidised households, with the support of the enhanced version of Smart Tender (Note), can complete the maintenance works as soon as possible; and
(c) how to encourage property owners to maintain regular building maintenance, thereby preventing the problems and the burden of having to carry out major repairs in the future from accumulating.
(4) The Hong Kong Planning Standards and Guidelines (HKPSG) stipulate the criteria for determining the scale, location and site requirements of various land uses and facilities covered by the policies of various Government bureaux/departments. In response to ageing population, the Social Welfare Department proposed amendments to Chapter 3 of the HKPSG according to the recommendations in the Elderly Services Programme Plan in 2018, where population-based planning standards for elderly services and facilities were added and updated, including the floor area requirements and planning ratios for district elderly community centres, neighbourhood elderly centres, community care services, and residential care services, so as to align more effectively with the goal of strengthening elderly services. Furthermore, Chapter 4 and Chapter 8 of the HKPSG set out the planning standards and criteria for greening and parking spaces/EV chargers respectively. The Planning Department will help facilitate if relevant bureaux/departments review the criteria and raise updates based on their latest policy considerations.
The URA has been providing necessary community facilities when taking forward its urban redevelopment projects, such as providing a 100-place elderly facility in the Bailey Street/Chi Kiang Street Project which is currently under tender, and providing a 20 metre-wide waterfront promenade and a 25 metre-wide at-grade open-air waterfront plaza for public enjoyment in the Ming Lun Street/Ma Tau Kok Road Development Scheme and the To Kwa Wan Road/Ma Tau Kok Road Development Scheme, etc.
(5) We acknowledge that the co-ordination with other Government departments during the implementation of the URA’s urban redevelopment projects is highly important. On this, the Development Bureau (DEVB) has an Urban Renewal Unit, which is responsible for overseeing the overall operation of the URA, as well as co-ordinating the communication and collaboration of the URA with other departments, so as to take forward the new ideas and projects of urban renewal. The Development Projects Facilitation Office under the DEVB also provides assistance to the URA’s redevelopment projects (such as the Kwun Tong Town Centre Project), so as to co-ordinate various departments in processing the approval applications for developing the URA’s projects.
Note: The DEVB, in collaboration with the URA, targets to launch the enhanced Smart Tender services in the fourth quarter of 2026 to strengthen the support for owners’ corporations and owners in engaging compliant consultants and contractors to properly carry out building maintenance works. The enhanced Smart Tender services currently being developed will include establishing more rigorous “pre-qualified lists” of consultants and contractors, and the URA to perform the gatekeeping role by conducting the tendering and tender evaluation for owners in engaging consultants and contractors, etc.