Implementation Arrangements for the Clearance of Blocks 1, 2, 3 and 12 Redevelopment of Pak Tin Estate (Phases 7 & 8)

CPC 16/2012

PAPER NO. SHC 27/2012

Memorandum for the Commercial Properties Committee and Subsidised Housing Committee of the Hong Kong Housing Authority

Implementation Arrangements for the Clearance of Blocks 1, 2, 3 and 12 Redevelopment of Pak Tin Estate (Phases 7 & 8)

PURPOSE

To seek Members’ approval on the clearance date, the rehousing and implementation arrangements for the clearance of Blocks 1, 2, 3 (PT Phase 7) and Block 12 (PT Phase 8) at Pak Tin Estate.

BACKGROUND

2. Pak Tin Estate has been partially redeveloped under the completed Comprehensive Redevelopment Programme (CRP). At its meeting held on 12 January 2012, the Strategic Planning Committee (SPC) endorsed, vide Paper No. SPC 4/2012, the proposed Master Layout Plan and phased clearance arrangements for redevelopment of Pak Tin Estate, with PT Ph 7 & 8 (named as Phase 7A and Phase 7B in paper SPC 4/2012) as the initial Phases, on consideration of the buildback potential of the estate upon redevelopment in addition to the findings of the structural conditions and economic viability under Refined Policy on Redevelopment of Aged Public Rental Housing Estates.

REDEVELOPMENT PLAN

3. PT Phases 7 & 8 involve the clearance of 4 Old Slab blocks, (i.e., Block 1, 2, 3 and 12) completed between 1975 and 1978, with 953 domestic flats. At present, there is a population of around 2 800 persons in some 900 households. Upon redevelopment, 3 domestic blocks with some 1 400 flats will be built, together with a covered Public Transport Interchange (PTI). An existing layout of Pak Tin Estate is attached at Annex.

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4. A total of 33 shops will be affected by the PT Phases 7 & 8 redevelopment. However, we will maintain the basic retail facilities as far as practical to address the needs of the remaining residents in particular the senior citizens. In addition to the existing Pak Tin Commercial Centre and commercial and retail facilities, which will not be affected, we propose to provide a mini-store with an approximate IFA of 190m2 by converting part of the empty bay at Tsui Tin House.

5. We are now working closely with relevant government departments and bureaux in relation to the relocation, reprovision and funding arrangement for the community, welfare, transport and educational facilities for Pak Tin Redevelopment. A number of existing welfare facilities will be affected by the PT phases 7 and 8 redevelopment such as ‘Heep Hong Society’ for disability services, ‘HK Christian Service’ for meal delivery service, ‘Po Leung Kuk’ for nursery services, and ‘The Samaritan Befrienders Hong Kong’ etc. We propose to relocate them by converting the empty bays of other existing domestic blocks of Pak Tin Estate.

PROPOSED CLEARANCE DATE AND THE REHOUSING AND ASSOICATED ARRANGEMENTS

6. Shek Kip Mei (SKM) Estate Phases 2 & 5, which is expected to be available for occupation by June 2012, is considered suitable for rehousing the households affected by the clearance. In order to make use of the rehousing resources in good time, an urgent clearance for PT Phases 7 & 8 with 24 months’ notification period counting from the date of the formal announcement to the target clearance date is proposed. To allow sufficient time to make the necessary rehousing and associated arrangements, we propose to set 26 April 2012 (the date of the joint CPC/SHC meeting) as the announcement date for the clearance and April 2014 as the target clearance date.

7. In formulating our proposals for the various rehousing, reprovisioning and associated arrangements set out below, we have followed the guiding principles which were established to apply to clearance projects outside the CRPNote 1. The ensuing paragraphs of this paper set out our detailed proposals for the rehousing and associated arrangements for the affected domestic and non-domestic tenants.

Note 1 The guiding principles were approved by SPC/CPC/RHC vide Paper No. SPC 38/2000, CPC13/2000, RHC 38/2000.

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ARRANGEMENTS FOR DOMESTIC TENANTS

Rehousing to Public Rental Housing (PRH) Flat

8. At present, about 900 households remain in PT Phases 7 & 8 and require rehousing. Letting in the concerned Blocks 1, 2, 3 and 12 has been frozen.

9. For estates to be cleared outside the CRP, it is not the policy of the HA to rehouse affected tenants within the same district of the cleared estate due to the practical reason that there may not be sufficient flats available in the same district. Instead, we allow tenants to move to PRH flats in any district of their choice subject to the availability of suitable vacant flats. In the case of PT Phases 7 & 8, as an operational arrangement, we will reserve an adequate number of units for the affected households from the new flats in Shek Kip Mei Phases 2 & 5. There is a total supply of 4 054 flats and these are expected to be ready for intake by June 2012.

10. To expedite the clearance process, other resources in Lower Ngau Tau Kok in Kowloon East District due for completion in early 2012 can also be made available for the purpose of early thinning out. Opportunities will as well be made available for early moving-out by affected households to vacant flats in other estates if they wish to move early. We will do our best to accommodate tenants’ requests provided matching resources are available.

11. An on-site Rehousing Team Note2 will be established to take care of tenants’ rehousing needs.

Domestic Removal Allowance, Special Ex-gratia Allowance

12. We propose that all affected domestic tenants should be granted an ex-gratia Domestic Removal Allowance (DRA), to meet part of the costs of removal. Furthermore, in accordance with the aforementioned guiding principles, Special Ex-gratia Allowance (SEGA) rates which are same as the current rates of the DRA are to be granted to the affected domestic tenants with not more than 30 months’ notice. The DRA rates approved vide Paper No. SHC 4/2012, and hence the associated SEGA applicable to the eligible domestic households of PT Phases 7 & 8, are listed as below:

Note2 This team comprises 1 Housing Manager, 1 Assistant Housing Manager, 3 Housing Officers and 1 clerical staff.

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Household size DRA Proposed Total ($) SEGA ($) ($) 1-Person 3,970 3,970 7,940 2-3 Persons 8,690 8,690 17,380 4-5 Persons 11,325 11,325 22,650 6 Persons and above 14,485 14,485 28,970

Singleton Allowance / Doubleton Allowance (SA/DA)

13. Following the aforementioned guiding principles, we also propose that one-person and two person households of PT Ph 7 & 8 may opt to receive SA/DA Note 3 in lieu of rehousing to a PRH flat. SA and DA were initially introduced in 1976 and 1982 respectively. They provide an additional option for eligible single-person and two-person households affected by government clearances and HA redevelopment and estate/interim housing clearances to choose a cash allowance in lieu of rehousing.

14. The current rates of SA and DA, set in accordance with the formulae Note 4 approved by the Management and Operations Committee (MOC) in 1997 are $37,330 and $48,310 respectively. The rates have been kept under regular monitoring since the last revision in 1997, and kept frozen as the private rent level had not returned to the 1997 level in the subsequent years. Corresponding to the recent increase in private rent level in the 4th quarter of 2011 and in accordance with the established formulae, it is proposed to revise the SA/DA as follows to maintain their attractiveness.

Note 3 The SA/DA rates are calculated as one year’s rent for a household to rent a private flat of comparable size to PRH. Recipients of SA/DA are debarred from further payment of the allowance and any form of subsidized housing for two years upon receipt of the allowance. Note 4 SA = Average private unit rent for all districts for 1-P x average flat size for 1-P x 12 months. DA = Average private unit rent for all districts for 2-P x average flat size for 2-P x 12 months.

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Singleton and Doubleton Allowance Household size (no. of persons) Existing Rates Proposed Rates Variation ($) ($)

1 37,330 40,560 Note 5 +$3,230(+8.65%) 2 48,310 50,230 Note 6 +$1,920(+3.97%)

15. The proposed rates will be applied to affected households of PT Ph7 & 8, and HA’s new PRH estate clearance projects as well as government clearances to be formally announced after the date of approval of this paper until the next revision. For all the PRH estate clearance projects and government clearances already announced, SA/DA rates payable to the affected tenants will remain unchanged at the then prevailing rates applicable to each individual project.

ARRANGEMENTS FOR NON-DOMESTIC TENANTS

16. There are a total of 33 three-year fixed term commercial tenancies currently let in PT Ph 7 & 8. As the notice period of redevelopment is not more than 30-months, in line with the aforementioned guiding principles, SEGA equivalent to three months’ exclusive rent in addition to the EGA equivalent to 15 months’ exclusive rent will be offered to the eligible commercial tenants. The affected commercial tenants will also be given the opportunity to participate in restricted tender exercises for HA’s market retail premises, the successful bidders will be given a three months’ rent free period in the new tenancy, or a lump sum payment in lieu of restricted tender opportunities. In accordance with Paper No. CPC 41/2011, the present rate of the lump sum payment is $99,000.

Note 5 $200/m2/month x 16.9 m2 x 12 months rounded to the nearest ten dollars. Note 6 $192/m2/month x 21.8 m2 x 12 months rounded to the nearest ten dollars.

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17. In line with current practice for estate clearance projects, the following will also apply:

(a) In addition to the rent freeze, all existing commercial tenancies will not be renewed after expiry of the present term. Those intending to continue their business would be granted a monthly licence until two months before the target clearance date; and

(b) The affected commercial premises will also be included in the current six-monthly rent review for shops affected by PRH clearance once the clearance has been announced.

18. Seven welfare lettings comprising 8 sets of premises located at Blocks 2 and 3 will be affected. Government departments concerned have been requested to assess their reprovisioning need. Subject to availability of resources, we will assist those in need to seek suitable accommodation in other blocks of Pak Tin Estate not affected by the clearance or estates in the vicinity. In line with previous practice, no EGA will be granted to welfare lettings charged with concessionary rent. Their rents will not be frozen and they will be subject to rent reviews under the existing mechanism conducted once every three years. One government office (Squatter Control Office of the Lands Department) will also be affected by the clearance. We will handle the reprovisioning application subject to the availability of suitable site and a request from the Government Property Agency. Letting of commercial premises at PT Phases 7&8 has been frozen ahead of the clearance.

Community Service Team (CST)

19. As in the previous clearance projects, we propose to establish a CST for the clearance of PT Phases 7& 8. The team will be stationed on-site and serve as a bridge between HA and affected tenants to maintain effective communications, explain the detailed arrangements to tenants and mitigate misunderstanding. As evident in previous clearance exercises, the expert service of the CST can help enormously in alleviating tenants’ anxieties and adjustment problems. This is especially true for elderly people who may get anxious and have concerns about rehousing arrangements. The setting up of the CST is in line with calls from the local community. The CST will comprise one social worker and one project assistant, and the service will be outsourced to a Non-Government Organisation by tender.

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STAFF IMPLICATIONS

20. The manpower required for implementing the clearance rehousing arrangements will be met through internal staff redeployment, and no additional posts will need to be created.

FINANCIAL IMPLICATIONS

21. The total expenditure on various ex-gratia allowances for domestic and commercial tenants is estimated at $24M. The on-site rehousing team will incur a total notional staff cost of $7.8M and office support costs of $0.6M for the 24-month clearance period. The cost of the CST for the project is $1.4M. The estimated expenditure for year 2012/13 of about $10M has not been budgeted. The expenditure will be met by savings in other cost centres. For requirements from 2013/14, the appropriate funding will be sought in the future budget exercise.

PUBLIC REACTION / PUBLICITY

22. Over the past years, Sham Shui Po District Council (SSPDC) has been pushing for the early redevelopment of Pak Tin Estate, due to difficult topography for the elderly and the mobility impaired, poor living environment, ageing of the estate population, etc. We expect the local community and the residents of Blocks 1, 2, 3 and 12 Pak Tin Estate will generally welcome the proposed implementation arrangements and ex-gratia allowances for the clearance. A press statement on the clearance and associated arrangements will also be issued after the joint CPC/SHC meeting. Staff in our Rehousing Team, the estate staff and the expert staff in the CST will do their best to explain the details of the arrangements to the affected tenants and to assist them for a smooth removal.

RECOMMENDATIONS

23. Members are recommended:

(a) to approve setting 26 April 2012 as the announcement date for the clearance, and April 2014 as the target clearance date for PT Phases 7 & 8 (paragraph 6);

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(b) for domestic tenants -

(i) to note the rehousing arrangements in paragraphs 8 - 10;

(ii) to approve the revised SA/DA rates as proposed in paragraph 14;

(iii) to approve the arrangement of granting of DRA, SEGA and SA/DA to the affected eligible tenants as proposed in paragraphs 12, 13& 15.

(i) to approve the granting of EGA, at 15 months’ exclusive rent, and SEGA at 3 months’ exclusive rent, and a 3-month rent free period to commercial tenants who lease HA market retail premises through restricted tenders, or the payment of a lump sum in lieu of restricted tender opportunities, as proposed in paragraph 16;

(ii) to note the commercial tenancy arrangements in paragraph 17; and

(iii) to note the reprovisioning arrangements of welfare tenants in paragraph 18.

(d) to approve the establishment of an on-site CST as proposed in paragraph 19.

DECLASSIFICATION

24. We recommend that this paper be declassified upon Members’ approval of the recommendations in paragraph 23 above. The paper will be made available to the public through the HA website, the Department’s Library and through the Departmental Access to Information Officer if it is declassified.

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DISCUSSION

25. At the joint meeting of the CPC and SHC to be held on 26 April 2012, Members will be invited to approve –

(a) the recommendations in paragraph 23 above; and

(b) declassification of this paper as recommended in paragraph 24 above.

Ms Cindy CHAN Secretary, Subsidised Housing Committee Tel No. : 2761 5033 Fax No. : 2761 0019

c.c. Members of the Finance Committee

File Ref. : HD(HS)RP 11/40/53/7 (Strategy Division) Date of Issue : 17 April 2012

Annex Existing Layout of Pak Tin Estate