XCC(79)46
(i)
their household income should not be more than $3,500 a month;
(ii)
they are not owners of domestic property which is available for their use; and
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(iii) they are not eligible for housing assistance
from their employers.
These rules were announced in January 1978 when appli- cations for 8373 flats built under Phase I of the Home Ownership Scheme were invited. A total of 35, 818 persons applied, of which 8, 006 were Housing Authority tenants and 27, 812 were members of the public or Housing Authority tenants who wish to split from their parent household.
Review
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The Home Ownership Committee of the Housing Authority has recently reviewed the existing eligibility criteria to see whether they should apply to applicants for the 3, 500 flats built under Phase II of the Home Ownership Scheme and 1, 500 flats built under the first two projects of the Private Sector Participation Scheme. Its recommendations are presented in the following paragraphs.
Household Income
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The present income limit of $3, 500 per month was fixed two years ago on the basis that a family earning more than $3,500 per month should be able to afford 40% of its income to buy a small self-contained flat in the private sector on commercial mortgage terms. Using the 40% rule, and assuming a 10% deposit, a family on $3,500 was able to afford 95% of the Phase I Home Ownership flats with Government's assistance regarding special mortgage terms.
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In reviewing the income limit, the Home Ownership Committee of the Housing Authority took the following factors into consideration:
(a)
Consumer Price Index
The Consumer Price Index (B) (for households spending between $1,500-$2,999 per month in 1973/74) rose 15, 7% between September 1976 (115) and March 1979 (133). If the same income limit in terms of purchasing power were to be maintained, the maximum income limit should be increased to $4,000 (rounded to the nearest $100). However this would reduce the number of families in the eligibility field because the wage index has risen faster in recent
years than the consumer price index.
CONFIDENTIAL