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Statement by CS on the review of institutional framework
for public housing 2.
Tsang pledges better controls on land 3.
Housing body's powers cut 4.
Sky Plaza project attracts developers' interest 5.
Housing challenge
1. Statement by CS on the review of institutional framework for public housing Following
is the statement by Chief Secretary for Administration, Mr Donald Tsang, today
(June 20) on the review of the institutional framework for public housing: Ladies
and Gentlemen, Introduction The Committee on the Review of the Institutional Framework
for Public Housing (the Committee), which I chair, has now completed its task.
Our report is published today (June 20), following endorsement of its recommendations
by the Chief Executive in Council. I thank members of the Legislative Council,
the Housing Authority, the Housing Society, Government colleagues, organisations
and private individuals who have forwarded their views on the many complex issues
involved. As well as making specific recommendations for organisational change,
the Report contains a re-statement of our housing policy and identifies the problems
confronting the present institutional framework. I will now outline to you these
key features of the Report. Re-statement of policy The main objectives
underlying our housing strategy remain to provide "Better Housing for All"
to the Hong Kong community, and to do so by making maximum use of private sector
resources, so that public resources can be focused efficiently on families in
genuine need. In meeting demand from families in the low income group, we will
increasingly rely on direct fiscal subsidy. The traditional construction of public
housing by Government agencies will become secondary. This will make the best
use of public funds, provide greater choice to consumers and allow us to respond
quickly and flexibly to short term changes in housing demand. In delivering our
public housing programmes, we will also ensure the stability of the private sector
market by avoiding any overlap with the subsidised home ownership market, and
by a clear and transparent system of land sale and allocation. Successes and
challenges Chapter 3 of the Report highlights the successes of our housing
strategy to date and the challenges we face. Since 1997, the Government has provided
more than 1 300 000 people with public housing assistance, whether in the form
of public rental flats or allowances, home ownership flats or home ownership loans.
Redevelopment and clearance programmes have radically reduced the number of inadequately
housed households. And the average waiting time for the low income group to gain
access to public rental housing has been more than halved, to three years. At
the same time, the Report recognises that the efficient delivery of our public
housing programmes is hampered by organisational and structural problems, many
of which have arisen for historical reasons. They include - * Overlapping of functions
between different agencies, notably in the grey area between the formulation of
strategic policy, which now rests with the Housing Bureau, and operational policy,
which rests mainly with the Housing Authority. * Confusion in relation to the
individuals or agencies who should properly be regarded as spokesmen on housing
matters. * Proliferation of bureaucracy in the organisations involved in the development
and implementation of the Government's public housing policy. * Involvement of
the Housing Authority and the Housing Department in areas unrelated to public
housing provision. * Uncertainty over the long term role of the Housing Society.
Recommendations for structural change To address these and other related problems
identified during the course of our review, the Report contains twenty recommendations
in all. They fall into five groups: * Recommendations concerning the role of the
new Principal Official with responsibility for housing. * Recommendations concerning
the merger of the Housing Bureau and the Housing Department into a new housing
organisation. * Recommendations concerning the evolution of the role of the Housing
Authority. * Recommendations concerning the future role of the Housing Society.
* Miscellaneous recommendations. Let me deal briefly with these in turn. Role
of the Principal Official The Committee considers that control of housing
policy should be vested in the concerned Principal Official, subject to direction
by the Chief Executive acting on the advice of the Executive Council. The Principal
Official will become Chairman of the Housing Authority ex officio following an
appropriate change to the relevant legislation. The new arrangements will serve
to integrate the operations of the Housing Authority into the Government's overall
policy making process, since the Principal Official will be both Chairman of the
Housing Authority and head of the new housing organisation. The Principal Official
will become the sole spokesman on the Government's housing policy. He will also
strengthen the links between the new housing organisation and the Legislative
Council. The new measures will allow for greater accountability to the Legislative
Council and the public on our housing policies and programmes, and will complement
the introduction of the new accountability system for Principal Officials. They
will also address the criticism that, in the past, there have been too many spokesmen
on housing matters, with consequent confusion to the public and to the market.
They will give the general public greater certainty and clarity about the responsibility
for housing policy making and delivery, and will remove any doubt about who is
in charge of the decision making process. The work of Housing Bureau and Housing
Department The Committee recommends that a new housing organisation should
be formed by the merger of the Housing Bureau and the Housing Department. This
new organisation will operate differently from the present structure in several
important ways. First, it will provide a unified chain of command running from
formulation of housing strategy through to implementation of individual public
housing programmes. The organisation will work to the Principal Official through
a Permanent Secretary who will play an important role in the Housing, Planning
and Lands Bureau. With effect from 1 July 2002, the Permanent Secretary will also
be designated as the Director of Housing. The grey areas that now exist between
the Housing Bureau and the Housing Department in terms of responsibility for operational
policies will be removed. Second, the new organisation will place greater emphasis
on strategic planning and research, in line with our commitment to meet the fast-changing
aspirations of the community. The suggested framework for the new housing organisation
envisages a dedicated team working to the Principal Official through the Permanent
Secretary to undertake research, co-ordinate housing policies with policies on
town planning and land allocation and serve the major committees advising the
Principal Official on housing strategy. Apart from the Housing Authority, these
include the Steering Committee on Land Supply for Housing (HOUSCOM), now chaired
by me, which will continue under the Principal Official to bear the key responsibility
for forecasting land supply required for housing development and the demand for
and supply of public sector housing. Third, the new organisation will in future
focus on the core activities of the present Housing Department: the provision
of public rental housing; the procurement of services from the private sector;
the assessment of eligibility for public housing assistance; and the issue of
housing loans and allowances. Other extraneous functions will be transferred to
other Government agencies or hived off to the private sector. Fourth, the new
housing organisation will pursue the initiatives already set in motion by the
Housing Authority to enhance the quality of public housing construction. These
include moving away from standardised designs, reviewing procurement systems,
checking on non-performing contractors, updating the ISO 9000 quality system and
moving towards transferring responsibility for building control of public housing
projects to the Buildings Department. These measures will serve to address any
residual public concerns over the quality of public housing developments, which
gave rise to the commissioning of our report. We envisage that the heads of all
the sections of the new organisation will share the responsibility for both operational
programmes and for assisting the Principal Official in policy formulation. The
result will be that, in addition to the unified, "vertical" line-of
command running down from the Principal Official, there will also be a holistic,
"horizontal" approach to public and private housing policy, within the
new organisation. All these will serve to enhance the efficiency in formulation
and implementation of housing policies. There will be potential for savings in
directorate staff following the establishment of the new housing organisation.
I know that some staff may be concerned that streamlining could lead to redundancy.
This is not the intention. The Report makes it clear that the impact of these
measures on the out-sourcing programme of the Housing Authority and its on-going
corporate reforms will need to be carefully assessed. No significant changes will
be made to existing staff levels without prior and full consultation of the staff
concerned. Role of the Housing Authority The Committee gives full recognition
to the major social achievements of the Housing Authority since its establishment
in 1973, including the provision of nearly half the total housing stock in Hong
Kong. At the same time, the Committee accepts the need for the role of the Housing
Authority to evolve in the light of changing economic circumstances and community
aspirations. The Report recommends a two stage approach to the evolution of the
Housing Authority's role within the new organisational structure. In stage one,
the Principal Official will become Chairman of the Housing Authority ex officio,
as I just mentioned. The necessary legislative amendments will be introduced early
in the next session of the Legislative Council. In this stage, new financial arrangements
will be put in place with the Housing Authority to allow it to continue to provide
housing assistance to families in genuine need. The Housing Authority's committee
structure will also be simplified. This process will begin immediately upon the
appointment of the Permanent Secretary in the new organisation. I hope that the
associated administrative and financial changes can also be in place by the end
of this year. In phase two of the reform, the role of the Housing Authority will
evolve further. First, there will be scope for additional streamlining of its
executive functions and those of its committees in line with the objective of
a unified structure working directly to the new Principal Official. Second, with
the progressive replacement of traditional "bricks and mortar" provision
of public housing by the use of direct fiscal subsidies, the responsibility for
financing the public housing programme will ultimately need to return to the Government.
Third, in parallel with the decrease in the traditional executive functions of
the Housing Authority, it will by contrast play a much wider role in providing
advice to the Government - on the private sector property market as well as housing
strategy. At that time, it will be able to subsume the present role of the Long
Term Housing Strategy Advisory Committee. The present, pluralistic system of appointment
of Housing Authority members will remain in place. The Committee considers that
the changes envisaged in stage two of the reform are necessary. They will enable
the Government to continue to draw on the extensive expertise of the Housing Authority
and its members and to broaden the Housing Authority's advisory role, while at
the same avoiding a duplication of administrative and executive function with
those of the new housing organisation. The Housing Authority, by advising the
Government on both private and public housing policies, will enable the Government
to take a holistic approach to the development of our housing strategy. The Housing
Authority members will continue to come from different sectors and tender expert
advice in a transparent manner. The speed and manner in which these changes take
place will be for the Principal Official to determine. Role of the Housing
Society The Report acknowledges the important role played by the Housing Society
in implementing various housing loan schemes and pilot schemes in response to
changing market conditions. Now that the Government has firmly moved away from
the provision of public housing through the traditional "bricks and mortar"
approach, we will no longer need to look to the Housing Society to build public
rental or subsidised home ownership flats. Again, the administration of future
schemes for loans and rental allowances will be most efficiently co-ordinated
under the new housing organisation. However, given the extensive experience and
professional skills of its members, we believe that the Housing Society has a
major new role to play in partnership with the Urban Renewal Authority, to implement
a comprehensive programme of urban development. At the same time, we believe our
goals of transparency and accountability will be well served by the drawing up
of a Memorandum of Understanding between the Housing Society and the Government
to cover the Society's remaining public housing activities, for example the redevelopment
of its existing public housing estates. Other recommendations Finally,
in looking carefully at the portfolios of other agencies concerned in the process
of housing development, we have noted particular areas that merit further attention.
We have concluded that the new housing organisation should monitor actively the
progress of rail-related housing developments and those of the Urban Renewal Authority,
assess their implications for the Government's housing policy objectives and proactively
seek HOUSCOM's guidance on these implications when necessary. This will facilitate
the better planning of land supply for housing. Conclusion We have approached
this entire exercise with the interests of the community as our first priority.
I believe that we have struck a balance that will allow our public housing progammes
to be delivered more efficiently, to resolve organisational anomalies, to improve
public perceptions of the process of housing policy development, and to ensure
the safe and cost-effective operation of our public housing programme. [Source:
Hong Kong Government, 20 June 2002] 2.
Tsang pledges better controls on land
Chief Secretary for Administration Donald Tsang yesterday pledged better control
over the supply of land under the new housing framework. Unveiling the new arrangements,
he said land supply would be controlled by a new housing body created by merging
the Housing Bureau and Housing Department. The body, to be headed by a new Housing
Secretary to be appointed under the accountability system, will determine the
land supply required for housing development, along with the demand and supply
of public housing. It will also ``actively monitor the progress of rail-related
housing developments and those of the Urban Renewal Authority (URA),'' said Tsang,
head of the housing policy review committee. The new housing framework was endorsed
by the Executive Council on Tuesday. Speaking after announcing details, Tsang
said land supply in Hong Kong could be a big issue, triggering a chain reaction
across the entire property market. ``In the past, we always made mismatches between
developments by [the Mass Transit Railway and the Kowloon-Canton Railway] and
those by the government and private developers, which resulted in oversupply and
shortages at different times. Land supply can influence the property supply in
the market, while the property supply can affect the market price too,'' Tsang
said. ``So the government has responsibility to oversee the land supply policy.''
He also said the government would consider giving the URA, the MTR Corp and the
KCRC cash subsidies should there not be enough land for their property projects.
``But I don't think it will happen in future,'' he said, adding that the subsidies
would have to be approved by the Legislative Council. Tsang denied moves to control
land supply meant the government was succumbing to pressure from property developers,
or trying to control developments by the two railway companies. ``We just want
to ensure that there will be no oversupply of land,'' he said. ``The entire [housing]
policy aims to stabilise the market.'' The review recommended that the new housing
minister be responsible for housing policy. ``The Principal Official [housing
secretary] will become the sole spokesman on the government's housing policy,''
Tsang said. ``It is a way to eliminate the confusion in the past when people could
not figure out who should be responsible.'' A director of housing would be appointed
to work with the minister. Under the framework, the controversial Housing Authority
will become an advisory body and surrender executive power to the new minister
of housing, who will become its ex officio chairman. Tsang said public representatives
would remain on Housing Authority committees. The Housing Authority will be restructured
in two phases. In the first phase, new financial arrangements will be made to
allow it to continue providing housing assistance. The Housing Society will partner
the URA and will no longer handle housing loan schemes, which will be centralised
under the new housing body. Also, the government will give potential home buyers
financial subsidies rather than flats. The Secretary for Constitutional Affairs
Michael Suen has been named as the new housing minister under the accountability
system. HSBC Securities Derek Cheung said it would take time for the new approach
to benefit the market. ``There are about 8,000 completed unsold HOS units and
over 30,000 HOS units are under construction,'' Cheung said. ``In the next one
or two years, the housing market will continue to suffer from oversupply.'' The
Hong Kong Real Estate Developers Association said the market would benefit. [Source:
The Standard, 21 June 2002] 3.
Housing body's powers cut
The Housing Authority has had its powers severely curtailed under a radical shake-up
announced yesterday, with most of its work transferred to a new department and
its policy-making duties abolished. The new minister for housing, expected to
be announced by the Chief Executive next week, will chair the Housing Authority
and also be the "sole spokesman" on the Government's housing policies.
The housing reforms, aimed at centralising policy-making, will also see the formation
of a new department to replace the existing Housing Bureau and Housing Department.
When the changes are completed by the end of the year, the authority's role will
be diminished to that of an adviser. Its executive functions, such as setting
rents for public estates, deciding the prices of Home Ownership Scheme flats,
and planning building programmes, will no longer exist. Chief Secretary Donald
Tsang Yam-kuen, who headed the review, said the reforms were consistent with the
new ministerial system to be put in place next month. "The new arrangement
will serve to integrate the operations of the Housing Authority into the Government's
overall policy-making process, since the [minister for housing] will be both the
chairman of the Housing Authority and head of the new housing [department],"
said Mr Tsang. On the role of the Housing Society, Mr Tsang said: "We will
no longer need to look to the [society] to build public rental or subsidised home
ownership flats." The review said the problems with the existing system were:
An overlapping of functions between the Housing Bureau and Housing Authority;
Too many organisations speaking on housing policy; The involvement of the Housing
Authority and Housing Department in areas irrelevant to public housing; and An
unclear role for the Housing Society. The Housing Society will in future work
more closely with the Urban Renewal Authority on redevelopment projects. "The
renewal authority has a lot of projects in hand but does not have money. The society
has over $20 billion in surplus but its public housing programmes have been shrinking,"
said Mr Tsang, elaborating on how the two parties could co-operate. Democrat Albert
Ho Chun-yan last night condemned the reform as a plot to bar public participation
in housing policies. Authority member Wong Kwan feared the new system could result
in more delays because the new minister would have to debate policies in the legislature. 
[Source: SCMP, 21
June 2002] 4.
Sky Plaza project attracts developers' interest
At least eight SAR developers have registered initial interest in the Airport
Authority's Sky Plaza commercial development at Chek Lap Kok. Developers that
have confirmed their interest include Sun Hung Kai Properties, Henderson Land
Development, Cheung Kong (Holdings), Kerry Properties, Hang Lung Properties, Wharf
(Holdings), Sino Land and Nan Fung Development. Airport Authority commercial director
Hans Bakker said: "We are very satisfied with the response. Submissions have
come from local and overseas developers." However, the authority did not
release the number of registered interested parties. Mr Bakker said the invitation
for expressions of interest was only the first step before the development concept
could materialise. It enabled the authority to better understand how the market
thought the concept could be taken further, he said. Sky Plaza consists of four
office blocks with a gross floor area of 645,000 square feet and a retail-entertainment
centre of 322,000 sq ft, to be completed by 2005. The deadline for expressions
of interest closed yesterday. It will be a multi-purpose transport interchange
development to provide a range of facilities for passengers and other airport
users, and office accommodation. There will be a special emphasis on tour groups
and passengers travelling to or from China. Facilities such as group check-in
and a tour coach station will be offered. Developers that did not submit interest
yesterday included Swire Properties, Hongkong Land and HKR International. . [Source:
SCMP, 21 June 2002] 5.
Housing challenge
The long-awaited shake-up of the Government's housing machinery brings much needed
simplicity to what was a confusing and unwieldy collection of different bodies
with often overlapping mandates. The most eye-catching changes are the merger
of the Housing Bureau and the Housing Department into a single organisation and
the gradual change in the role of the Housing Authority from an executive to an
advisory body. Equally significant for the property market has been the decision
to tighten the granting of land to the MTRC, the KCRC and the Urban Renewal Authority.
The Housing Society, too, will see a change in its role from a builder of public
rental or subsidised home ownership flats to an agent for urban renewal in partnership
with the Urban Renewal Authority. These changes make administrative sense, creating
clear lines of command as well as clarifying the roles that the different organisations
dealing with housing will play. They will centralise power, but this is essential
if we are to get more coherent policy. But the real test of how effective these
changes will be is the extent to which they help to achieve the aims of assuring
quality housing in a way that is cost effective. The Government's declared strategy
is to rely on the private sector to the maximum extent possible, and using public
resources only for those who genuinely cannot afford housing at market rates.
Sticking to this will require political courage. When housing prices start to
rise again, as they almost inevitably will, there will be an increasing clamour
for the Government to actively re-enter the housing market to provide low-cost
housing. Past experience has shown that this a slippery slope that will lead to
ever increasing involvement in the housing market. Mr Tung's new administration
will need to show resolve to avoid the temptation to re-enter a sector that it
is only slowly extricating itself from. At the same time, the Government needs
to focus attention on its long-term land supply policy to avoid the boom and bust
cycle that Hong Kong is still recovering from. An efficient and transparent land
supply policy has to be part and parcel of a programme to deliver cost efficient
public housing in a way that complements the market, rather than manipulating
or controlling it. [Source:
SCMP, 21 June 2002] |  |
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