“We would like to encourage the private sector to participate in the redevelopment of old and dilapidated buildings,” a bureau spokeswoman said.

“During the public consultation, some wished the government could consider the redevelopment needs of certain old districts, and some deemed 60 per cent too low when compared to other countries such as Japan and South Korea, which offer insufficient protection to the minority owners.”

Sham Shui Po is among seven designated areas that will enjoy even lower thresholds to sell old buildings for redevelopment. Photo: Xiaomei Chen

Chief Executive John Lee Ka-chiu first proposed lowering the compulsory sale application thresholds for old private buildings as part of his maiden policy address last year.

Authorities are attempting to accelerate urban renewal efforts as the city contends with a supply of rapidly ageing buildings.

The number of private buildings aged 50 and above has risen from 4,500 to 9,600 over the past decade, with only 1,600 undergoing redevelopment.

The Urban Renewal Authority, a profit-making statutory body, has played a hand in just a quarter of all such redevelopment projects over the last 10 years, but suffered a deficit of HK$3.5 billion (US$448 million) in the last financial year amid a property downturn.

The remainder of the projects have been driven by the private sector.

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Last year, the government proposed lowering the compulsory sales application threshold to as low as 60 per cent for buildings aged 70 and above, but the suggestion was adjusted following a public consultation.

The latest amendment bid will reduce the threshold by 10 to 15 per cent for buildings aged 50 and above, with the amount varying depending on how old the site was.

The threshold will be selectively slashed even further in seven neighbourhoods with urgent redevelopment needs, including Sham Shui Po, Kowloon City, Mong Kok, Sheung Wan and Tsuen Wan.

The areas were selected based on the number of buildings over the age of 50, as well as the number of sites ordered by the government to undergo checks and repairs.

Under the proposal, buildings between 50 and 59 years old in the designated areas will only need 70 per cent of site owners to agree to sell. The threshold will remain unchanged for those in non-urgent zones.

Buildings between the ages of 60 and 69 in designated areas will have their thresholds lowered to 65 per cent, while the limit will be 70 per cent in other neighbourhoods.

Sites aged 70 and above only need 65 per cent of owners to agree to sell, regardless of the location.

The amendment will cover industrial buildings that are aged 30 and above situated in non-industrial areas. The threshold to sell will drop from 80 per cent to 70 per cent.

Other proposed measures include allowing the owners of adjoining buildings aged 50 years and above to apply for compulsory sale, even if the sites do not share a staircase.

But the buildings will have to meet an overall threshold calculated using a weighted average formula. At least 65 per cent of owners at each site must also agree to the sale.

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The bureau said the proposal would package together multiple lots for compulsory sale and encourage developers to put forward large-scale redevelopment projects.

“When each building had to meet the 80 per cent threshold individually, it often resulted in many pencil-thin buildings, which is not an efficient use of land,” the spokeswoman added.

“The redevelopment value would also be affected, and the minority owners would subsequently suffer.”

Authorities have also discussed plans to increase support for minority owners, such as the establishment of a dedicated one-stop shop next year that will offer legal referral services, counselling, as well as relocation support and mediation help.

Additional measures will include a loan scheme with a government guarantee to support owners’ compulsory sale litigation fee.

The Urban Renewal Authority has played a hand in just a quarter of all such redevelopment projects over the past decade. Photo: Sam Tsang

The bureau spokeswoman said: “We do not wish to impose an income assessment [for the loans] because most minority owners are retired elderly, but we need to ensure the loan will not be abused by some investors too.”

It generally took about two years after the compulsory application launch to get a court judgment in such litigation cases, she said, adding that authorities hoped the new measures could reduce the waiting period.

Lau Chun-kong, a former president of the Hong Kong Institute of Surveyors, said it would take time to witness the results of the amendment as the pace of acquisitions by developers had slowed down over the past year due to a drop in land prices.

Lau said he expected more developers would launch urban renewal projects, especially in Sai Ying Pun, Sheung Wan and Wan Chai, where the property prices were higher, after an improvement in the market performance and a decrease in the interest rate that would help to boost land prices.

Meanwhile, the Hong Kong Institute of Surveyors welcomed the proposal and said it could potentially balance the rights of minority owners and the city’s redevelopment needs.

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The government on Tuesday also approved three more applications for the Land Sharing Pilot Scheme, which is expected to yield 8,100 flats in the Tai Po and Kwai Tsing districts, including about 6,100 public ones.

The site in Tai Po’s Lam Tsuen is expected to produce 4,100 public flats and 1,200 private ones, the most of the three projects. Companies under Wheelock Properties were applicants behind the largest site.

The pilot scheme allows private farmland owners to apply to increase the development density of their sites, but they must set aside at least 70 per cent of the increased floor area for public and subsidised housing.

The government has approved six projects since the initiative was launched in May 2020.

Additional reporting by Edith Lin