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LCQ10: Redevelopment of buildings developed under the Civil Servants' Cooperative Building Society Scheme

     Following is a question by the Dr Hon Priscilla Leung and a written reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (March 18):


     At present, there are some 200 buildings developed under the Civil Servants' Cooperative Building Society Scheme (CBS buildings) in Hong Kong, and quite a number of these buildings are aged and dilapidated. However, these buildings have redevelopment value since most of them are situated at premier residential lots in the urban areas (including the Mid-Levels on Hong Kong Island, Happy Valley and Kowloon Tong), and in most cases, the plot ratio of the lots concerned has not been fully utilised. The Panel on Development of this Council passed a motion at its meeting on July 15, 2013, urging the Government to launch redevelopment programmes for CBS buildings immediately, and to submit proposals acceptable to all sides in six months. However, the Government did not submit the proposals as scheduled. In this connection, will the Government inform this Council:

(1) whether the Government has formulated concrete proposals on the way forward for CBS buildings (e.g. the Government acquiring these buildings for redevelopment into private buildings); if it has, of the details, including the timetable, estimate of expenditure, and the amount of public funds to be deployed; and

(2) given that some young people have indicated that the high property prices at present have made it difficult for them to buy properties, and applications for the flats in the latest Home Ownership Scheme (HOS) developments put on sale have been oversubscribed by more than 80 times, which has reflected the keen demand for residential housing, but complex title problems have to be resolved before CBS buildings can be redeveloped, whether the Government has considered formulating measures to facilitate the flat owners concerned to rent their flats in these buildings to young people as their residence?



     The Civil Servants' Co-operative Building Society (CBS) Scheme was launched in 1952 with the main objective of providing accommodation to the CBS members and their families. Under the Scheme, eligible civil servants were granted land by the Government at a concessionary premium, usually at one-third of the prevailing full market value, to enable them to build residential buildings through co-operative societies. The legal titles of the land and the buildings were held by the CBS which was responsible for the management and maintenance of CBS buildings. Under the underlease the CBS signed with its members, CBS members have the right to use the flats but do not possess the legal titles to them. No CBS buildings have been built since the mid-1980s.

     In response to the requests from CBS members, the Government introduced in 1987 the first set of guidelines on the transfer of title to flats and land from CBSs to their individual members and underlessees subject to the unanimous consent of all members. To facilitate the conduct of the relevant procedures, the Government issued new guidelines in 1993 for CBS to apply for dissolution upon obtaining the consent of 75 per cent of its members.

     There are 238 CBSs in Hong Kong. Of these 238 CBSs, 184 had been dissolved and 54 had yet to be dissolved as at January 31, 2015. Among the 184 dissolved CBSs, 13 of them had paid the full land premium of their buildings to the Lands Department (LandsD); and of these 13 CBSs, the buildings under 11 of them had been redeveloped (there were 171 CBSs which had yet to pay up in full the land premium of their buildings, including 50 CBSs which had not paid any land premium at all and 121 CBSs which had paid the land premium for some of the flats).

     According to the CBS by-laws, members of CBSs that have yet to be dissolved have to comply with the "live-in" requirement. On the other hand, upon acquisition of the legal titles of their flats, former members of a dissolved CBS will execute legal charge on their flats in favour of the Financial Secretary Incorporated, such that the title deeds of the flats will be retained by the Government and the flats will be subject to alienation restrictions. To remove the alienation restrictions, the former CBS members may apply to LandsD, and upon payment of land premium, the Government will approve the removal of the alienation restrictions of the flats. The title deeds of the flats will be returned to the owners, who will be at liberty to dispose of the flats as they wish.  

     At the meeting of the Panel on Development (the Panel) of Legislative Council held on July 15, 2013, a number of CBS representatives who attended the meeting expressed their wish for early redevelopment of CBS buildings, in particular those which were lacking in modern day building facilities such as lift service which were posing access problems to aged occupants with impaired mobility. Many CBS representatives attending the meeting were concerned that they could not afford to pay the outstanding premium for the removal of the alienation restrictions in their underleases prior to redevelopment while the conditions of the buildings were deteriorating over time.  Members of the Panel generally supported the wish of the CBS representatives for early redevelopment and the need for policy review to facilitate the redevelopment of CBS buildings. The Panel thus passed a motion to urge the Government to launch redevelopment programmes for CBS buildings immediately so as to increase land supply in urban areas; and to submit feasible proposals acceptable to both sides in six months.

     In response to the call for redevelopment of CBS buildings by the Panel and CBS representatives, we have been exploring with the relevant departments and organisations on the feasible measures to facilitate the redevelopment of CBS buildings.

     My reply to the two-part question is as follows:

(1) We are exploring in various ways the feasibility of facilitating the redevelopment of CBS buildings, including the financial and technical issues and possible difficulties involved, owners' expectation on the acquisition price, and objection against redevelopment of CBS buildings by some owners, etc.

     As the redevelopment of CBS buildings is more complicated than expected and public subsidy may be involved, the Development Bureau is still working with the relevant bureaux, departments and organisations to explore the issue with a view to assisting owners of CBS buildings to seek redevelopment opportunities in a fair and equitable manner. We plan to report our findings to the Panel within this legislative session. As concrete proposal is not yet available, we are unable to provide further information at this stage.

(2) Regarding the redevelopment of CBS buildings, the Government has been exploring on how to assist, in a fair and equitable manner, owners of CBS buildings to seek redevelopment opportunities. We have not considered other proposals apart from redevelopment, and owners of CBS buildings have not raised any request for renting out their flats to young people.

Ends/Wednesday, March 18, 2015
Issued at HKT 14:03


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