One quarter of New Territories houses may be illegal

As many as one quarter of New Territories properties built under the small-house policy may be illegal, members of  Liber Research Community (LRC), a land/housing public policy research group, told a press briefing yesterday. They were reporting on a study of three-storey houses conducted through site visits, land registry research and analysis of real estate advertising. LRC found over 9,800 houses may be linked to illegal agreements.
Under the Small House Policy, male indigenous villagers who are descendants of a male line from a recognised village may apply to build a small house of up to three storeys high, on either their own land at zero premium or on public land through a private treaty grant, once during their lifetime. This right is non-transferable, and it is a criminal offence to sell the rights to developers.

The activists said it has become common practice for developers to sell small plots of land to male indigenous villages so they can build these three-storey houses. Then the developers buy the houses and turn them into private estates.
The LRC also stated that the government allows the construction of small houses connected by a shared wall, but individual developers abuse this. For example, by knocking the wall between the houses down, two small houses of 2,100 sq. ft. become one single house of 4,200 sq. ft. after completion, and no prior application to the Buildings Department is needed nor does it violate “the Buildings Ordinance.” In Clearwater Bay, for instance,  these “twin homes” sell for more than the price of the two small houses, where each individual small houses costs about $ 20 million, but a “twin home” has a price of up to $ 70 million.

LRC estimates that as of December last year, the number of suspect small houses is 9,878, located in 852 housing estates, accounting for 23% of the approved 42,000 small houses, involving 224 hectares of land. The Sai Kung area has 226 suspect small houses. The LRC said they have a database listing suspicious deals they have uncovered and asked the Government to make use of it when taking action against illegal activities. The database of suspicious properties can be viewed online.
A number of politicians and commentators have noted that  the problem has been pointed out by a government audit report in 1987, and the government, including current Chief Executive Carrie Lam – who was in charge of land development at the time – failed to deal with the issue.