28Hse-Hong Kong Property
Hong Kong Property Market - Yr.2020 Jan: Average price per sq feet $11463 1.39%   (last month:$11625)
Home  - News
News and article search:
   Previous News: (YYYYMMDD)
Property News
Property News(Eng)
New Homes
HK Gov.policy
Land news
Oversea Property
New Homes
Price info.
Photo gallery
Living in Hong Kong
Expert Blog
Wed Property Focus
Frankie K.S. Wong
18 Property
Mr. Poon
Frankie K.S. Wong
News content

[Industry Building Transformation Reviewing Part One of Two-Transitional Housing] Zero Application in One Year for Transforming Industry Building into Transitional Housing.

Image Caption
Owners worry three aspects; 70,000 people will miss housing chance.

The government's policy address in October last year proposed to restart industry building transformation and add new measures for renovating the whole building into transitional housing. It has been one year and a new Policy Address is coming soon. According to the submitted documents to Town Planning Board by the owners of the buildings so far this year checked by Hong Kong Wen Wei Po, there were 19 applications for industry building transformation in the first 8 months of this year, but no one is for renovating the building into transitional housing, reflecting that the market was not interested in the transitional housing. Some industry building owners expresses, they doubt the measures on three aspects, including short development period, no guarantee of renewal and follow-up development intention, and all have too many uncertainties. It is suggested that the government set up a special group for it and relax appropriately on regulations, also deal with follow-up development more flexibly.

Hong Kong Wen Wei Po (By Ngan LunLok)

“Shop King” Tang ShingPo family has been active in the acquisition and reconstruction of industry buildings in recent years, since they have many properties and greeted the measures with enthusiasm in that time, so they have always been considered to be the first pioneer in the process of transforming the industry building into transitional housing, benefiting the grass-roots groups of the society including those waiting for public housing or those living in inappropriate accommodation, but so far there has been no action. Tang ShingPo family member, the Chairman of Stan Group, Tang YiuSing expresses to Hong Kong Wen Wei Po that, they had indeed studied the transformation of East Asia Industrial Building into transitional housing (currently applying for hotel use), but gave up because the company had doubts about three factors including only five years for development period, risk of not being renewed and need to recover the building, and all had too many uncertainties, while the government was not released too many details.

It is suggested that millions sq ft is used as a measuring standard.

He suggests that the government should set up an industry building transformation special group, intensify efforts to implement relevant policies and consult more industry opinions, also relax the regulations appropriately to release more floor areas with millions sq ft as measuring standard to achieve scale efficiency, at the same time consider more flexible treatment of follow-up development. According to previous studies by the Association of Community Organizations, about 124 current urban buildings in Hong Kong are suitable for transformation to residential use, and it is expected to provide 18,000 units with each can hold 4 family members in the next 10 years if all of them are used for the development of transitional housing, benefiting more than 70,000 people. But now it seems that the launch of these 18,000 units is far away.

At that time, the director of Association of Community Organizations, Lui YeeShan had pointed out that the cost of transforming each building into a transitional housing was estimated to be HKD50-200 million, with the cost of each unit ranged from HKD0.6-0.7 million, and a minimum cost of each was about HKD5,000 per month. However, since the transforming takes at least one year and the recovery to original industry use from the transitional housing is difficult, so the current five-year operation period is too short, thus it is suggested that the government extend the land deed exemption from the proposed five years to 10 years to ensure that the owners have sufficient time to cover the cost.
Advocating that the government bears part of the refitting costs.

A Legislative Council Member Architecture, Surveying, Urban Planning and Garden Realm, Tse WaiChuen has repeatedly criticized the lack of incentives for the measures, which have not helped to solve the pressing housing problems. He pointed out that although the measures were exempted from subsidizing land prices, one of the main obstacles was that the authorities had no guarantee of renewal, so owners might need to terminate operations and recovery property after five years of operation. Business is business, in such a short period of time, owners or developers are difficult to recover even the cost of refitting, so it is not attractive.

Based on planning and other requirements, it is difficult for the government to allow a one-time approval of a service life of more than five years. Although there would be a great opportunity to extend the lease term if the operation is good, but it is unknown to the owners. He proposed the introduction of "[Industry Building Transformation into Transitional Housing 2.0", which promises to bear part of the cost of reconstruction and increase the incentives for refitting. For example, if the housing plan stops after five years, the government will bear a larger amount of reconstruction costs, or no longer bear the cost if the housing plan will continue more than 15 years, and the specific amount of subsidies depends on the length of the use of transitional housing, so as to reduce the loss of the owner's reconstruction costs.

When the Policy Address announced last October that the industry building is allowed to be transformed as a transitional housing, government sources had admitted that the rent of transitional housing should be lower than the market price, so it is not as attractive as for other uses and depends on "kindhearted owners".
Translated by 28Hse.com . All right reserved.