The government must provide greater incentives for the reconstruction of cooperative housing

01 view

Written by: Commentary Editing Room

2020-08-11 06:00

The housing reconstruction of civil service cooperatives has been delayed for many years. The Chief Executive announced in 2018 that the URA would be invited to assist in the reconstruction of cooperative housing. The URA also selected two pilot projects in the Kowloon City District. Recently, its Chief Executive Officer, Wei Zhicheng, also revealed more arrangements. However, even if the latest arrangement reduces the financial burden of residents, it is still difficult to guarantee that residents can purchase alternative houses in the same area for resettlement. I am afraid that the incentives are still insufficient. If the Government is to seriously accelerate the progress of the plan, it must show great sincerity.

The construction of civil service cooperatives originated in the 1950s. After the war, when the housing shortage and Chinese civil servants were dissatisfied with their welfare, the British Hong Kong government allowed Hong Kong civil servants to form their own associations and applied to the government for discounted land (usually the land price was one-third of the market value at the time) A) Building houses with low-interest loans. Generally speaking, the ownership of the land and buildings is held by the relevant cooperative. The members of the cooperative only have the right to use the unit and do not own the ownership, but the member's right to use is insured for life.

As the building ages, the structure and facilities are aging, and the society has suffered from "housing shortages" in recent years, the call for rebuilding civil service cooperatives with superior geographical locations and unexpended development potential is increasing. However, according to the regulations, the cooperative must be dissolved first for the reconstruction, and 75% of the members must agree to it, and the land price exempted by the government at the time of building the house must be paid back, so that the sub-deed and the members can obtain the title before the reconstruction can be acquired.

The URA will rebuild the civil service cooperatives, and the two pilots will provide more than 3,000 units in the future. (Photo by Liang Pengwei)

Land premium is the biggest resistance to reconstruction

Among the 238 cooperatives that have been established, only 12 have successfully rebuilt their buildings. This shows that the difficulty is not low. Not only has the process of dissolution of the cooperatives resumed, but the cost of rebuilding the land is also an obstacle. The land premium here not only refers to the land premium owed to the government due to the removal of the restriction on the transfer of cooperative units, but also the land premium for the increase in the buildable floor area of ​​the relevant lot due to reconstruction (commonly known as the land premium). An example of the valuation of civil service cooperatives shows that a unit with a saleable area of ​​1,100 square feet located on Shun Ning Road, Sham Shui Po, had an estimated land premium of 5.8 million yuan in 2012. Coupled with the length of the land premium process, the final amount has a greater chance of changing with the property market, resulting in less willingness of developers to participate in reconstruction.

No one is interested in reconstruction, and the high cost of land premiums is the problem. Some owners' organizations have always hoped that the participation of the URA can reverse the predicament, because their reconstruction projects have always been provided with the government's land premium-free arrangement. Unfortunately, according to the latest strategy of the URA, the problem of land premium still exists. At present, the two redevelopment pilot projects have affected more than 600 households, of which more than 500 have not yet paid the land price. The URA will also pay the land price to the government on behalf of the landlord when bidding in the future, hoping to reduce the landlord’s capital turnover. difficult. In addition, under the new arrangement, owners can also be exempted from the tens of thousands of administrative fees required to pay land premiums, and the URA will also provide free legal advisory services. The URA estimates that the financial burden of the owners can be further reduced.

However, landlords always have to face the huge cost of land premium. Some landlords are worried that the compensation paid by the URA after deducting the premium will not be enough for them to purchase a seven-year-old building in the same district. This may affect residents’ redevelopment. Willingness. Even though the URA emphasizes that after calculation, the proposed compensation should be sufficient for the owners to purchase subsidized-sale flats in the exclusive resettlement housing estates of the HS. However, the current resettlement housing estates of the HS are mostly outside of Kowloon City, which simply fails to achieve the original location Placement. Even if it is calculated that the new subsidized housing will be completed between 2024 and 2026 and used for the reconstruction of Zhen Shan Mei Village’s resettlement purposes, does the compensation provided by the URA take into account future property price changes so that affected households can purchase related units in the future? Suspicious.

Insufficient compensation for the reconstruction of the URA is not new. Its self-financing nature has been the crux of the problem. Long-term reforms must be made. However, the housing reconstruction of public service cooperatives is something that even developers have no intention of getting involved. Even though the government has entrusted the URA to take charge, it does not provide more concessions, which has not helped residents overcome the problem of excessive land premium costs.

The government must show more sincerity

In the final analysis, the government's unwillingness to make concessions on land premiums is the problem. Over the years, the government has refused to reduce or exempt the land premium for the reconstruction of cooperative housing. It not only believes that civil servants have enjoyed land price concessions for many years, but also pointed out that adjusting land premiums would deviate from the government's usual policy practices. However, it must be pointed out that when the British Hong Kong government launched the civil service cooperative housing plan, it did not make careful arrangements for the transfer, dissolution, etc. The reason is that the government expects that the cooperative members will "live for one life" and will not leave easily. The mentality is to provide for the members. An environment where you can live and work in peace. Now that the government insists on strict arrangements on the issue of land premiums, half-steps are not allowed. This shows that the attitude and practice of taking care of the housing needs of civil servants has gone backwards. What's more, the urgent need to rebuild the housing of civil service cooperatives is to release urban land resources. The government has to accelerate the pace of reconstruction, but is unwilling to show goodwill to ensure that affected households can be resettled in the same area. This is not appropriate.

The Government must provide greater incentives for the reconstruction of cooperative housing, reducing or even exempting land premium expenses as a consideration. In addition, the government and the URA may also consider providing the option of "flat-for-flat", allowing residents to move into new residential units after redevelopment without paying the land price, until the landlord intends to transfer the unit and then settle the land price. This can also solve the problems of land premium and household resettlement at the same time.

[New crown pneumonia] The epidemic intensifies the housing dilemma at the grassroots level, the government is time to wake

[Financial Budget] The final establishment of land reserve, land and housing policy is still unqualified

Home ownership is not king. The Housing Association should build "middle class public housing"

01 depth

Civil Service Cooperative Reconstruction URA 01 Viewpoint