(To watch the full press conference with sign language interpretation, click here.)

Chief Executive John Lee today said the new policy of regulating subdivided units (SDUs) balances the genuine demand for these flats with ensuring the market is healthy in its existence.

Mr Lee proposed in his Policy Address to set minimum standards to eradicate inadequate SDUs through legislation.

Elaborating on the policy initiatives at a press conference this afternoon, Mr Lee stressed that the system he plans to introduce through legislation does not intend to make what is illegal legal.

“What is illegal now will continue to be illegal under the respective ordinances; enforcement will be taken accordingly, and of course we will step up enforcement in concert with the new policy of subdivided flats, which will be introduced in residential buildings.

“The intention is to first of all regulate the subdivided flats using this basic housing concept, so that we have a standard below which we will take action against (owners), because it will not be regarded as the right standard for our households to live in. I think that is the intention.”

Acknowledging that eradicating inadequate SDUs is a difficult matter, he expressed hope that the proposed system could be thoroughly debated in the Legislative Council to enable the Government to enhance it.

“We also want to ensure the new system will be able to tell the market, which in some way needs to exist by the sheer evidence that over 110,000 households are living in this accommodation. We want this market to be healthy in its existence.”

The Chief Executive also said the Government will allow an adequate grace period for pre‑existing SDU owners and households to make necessary arrangements, and handle SDUs in residential buildings by batches in an orderly manner.

“We will be taking action after a reasonable registration period and a reasonable tolerance period, giving the Secretary for Housing flexibility so as to divide the non-satisfying units and enforce action according to the actual situation, so that it will take them off the market lot by lot.”

Mr Lee added that he is determined to solve the problem.

“I think we have to be realistic as to why subdivided flats (have existed) for a long period of time - because of need, because of the actual need of households, because of a lack of enough supply of flats. So we have to be realistic, pragmatic.

“It is not easy, but I am determined, and I think society supports that we should solve the problem.”