CR 4/6072/73
CONFIDENTIAL P.Ajas
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14th January 1977
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You will no doubt have already received a copy of the attached "open letter" issued in Hong Kong by Mrs. E. Elliott in which she attacks our housing policies and practices. You will remember that she is a member of the Housing Authority and thus is in the best possible position to seek to influence that body with her own views.
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Her first complaint is that public housing rents are too high. These fall into two categories, those for older, pre-1973 estates and those set by the new Housing Authority since 1973. The new Housing Authority found itself faced with a very unsatisfactory situation,. having inherited a very large number of estates the rents of which had been left untouched for roughly up to 20 years; at the same time, it was required to push ahead with fulfilment of greatly expanded public housing construction targets. The Authority decided it must bring these old rents (which by now represented a derisory proportion of household income) up to more reasonable levels, and modest increases are introduced every two years. The first was in 1974 and the second last month, and the justice of these increases has been accepted by the general public and by the tenants. These rents will always remain only a fraction of fair market rents, and they will always contain a very substantial subsidy, despite the two-yearly increases. As a member of the Housing Authority Mrs. Elliott has consistently supported these rent increases, and while they have been a source of major anxiety and potential friction, the policy has undoubtedly been right.
The second category is rents in new estates, where improved standards of accommodation and the application of traditional costing formulae have inevitably produced rents much higher than in the old estates. These rents have been deliberately held back below the strict formulae levels so as to keep them within the means of the great majority of eligible households, and this leaves perhaps 15% to 20% of tenants who find more or less difficulty in fitting these new estate rents in their budgets. The Authority's solution to this situation is to offer accommodation in its older
C.S. 143
J.A.B. Stewart Esq., OBE,
Hong Kong Department,
Foreign & Commonwealth Office,
King Charles Street,
London, SW1A, 2AH, ENGLAND.
R.
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CONFIDENTIAL
/estates