RESTRICTED (ADMIN)
Background to the Housing Authority's decision to raise rents for Rooftop Schools and Kindergartens
When the reconstituted Housing Authority was established in 1973, it was required under Section 4(4) of the Housing Ordinance (Cap. 283) to ensure that the revenue derived from its estates was sufficient to meet the funds expended on them. The estates in which the greatest recurrent losses were incurred at that time were those previously managed by the Resettlement Department (now known as Group B estates), which had originally been constructed to house squatters on Crown land required for development and others who had lost their homes. Rents in these estates have in many cases remained unchanged from the original levels set on first occupation of the estates. Over the period since 1973, the Housing Authority has gradually implemented a policy of adjusting rents for all tenancies in Group B estates, but these revised rents in the clder Group B estates still constitute no more than 25% of comparable commercial rents.
2.
use.
As these old Group B estates had to be constructed quickly, and often in isolated areas completely devoid of educational and welfare facilities, roof top rooms and certain ground floor accommodation were set aside for welfare
Zo attract voluntary agencies and other bodies to provide even minimal facilities at these estates, the cld Resettlement Department charged only a nominal rent of 1 a month for this accommodation. Because of the need to find sufficient takers for this accommodation, selection procedures for these bodies were necessarily pretty rough and ready.
3.
The Authority realised that social service organisations, whether in the educational or social welfare field, would be severely affected by the new rental policy, but it believed that it would not be justified in continuing a system whereby these organizations enjoyed this kind of hidden subsidy. The Authority considered that it would be more in accordance with the normal principles of subvention that a full rent should be charged to all such organisations, and that Government should then reimburse rent to those that it considered worthy of such support. This principle was accepted by Government when the Authority decided in 1974 to charge more realistic (but nowhere near commercial) rents to social welfare organisations.
4.
On 14 October 1976, the Authority decided to raise the rent of primary schools and kindergartens within estate boundaries ranging from 50% to 75% a square foot, exclusive of rates, in three steps, the first of which would take effect on 1st September 1977. This decision was made public on January 1977 50 that a full 9 months notice of the increase was given to the operators of the organisations affected.
Government's policy towards estate schools and kindergartens
5.
There are three types of educational institution affected by these proposed rent increases - Government-aided primary schools, privately-operated primary schools (all of which are on rooftops) and privately-operated kindergartens. The aided primary schools receive financial assistance from Government under the Code of Aid for Frimary schools, which contains provision for full reimbursement of rent. The continued operation of these schools is therefore not affected by the rent increases. The roof-top privately-operated primary schools are all considered to be sub-standard and cannot be brought within the aided sector. There are now more than enough free primary school places in the vicinity of these Group B estates for all the children still enrolled in these roof-top schools, and we are prepared to see them phased out. To facilitate their closure Government is offering an ex-gratia compensation of $2000 per ring in respect of each such school.
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