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(17_86) HKK 384/1
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M REGISTRY -9 JUL 1986
FICER
PA
REGISTRY
Action Taken
NOTE FOR EXECUTIVE COUNCIL
XCRI (86)12 30
Copy No...
RENT REVIEW FOR POST-1973 PUBLIC HOUSING ESTATES RENT
Introduction
The Housing Authority intends to increase, with effect from 1 September 1986, the rents for 137,868 domestic flats in 52 post-1973 estates. Of these, 104,686 flats (76%) had their rents last revised in September 1984, whilst the remaining 33,182 are new flats which have been occupied for This note is for Members' information before the proposals are implemented.
about two years.
Background
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The Housing Authority has a duty under section 4(4) of the Housing Ordinance (Chapter 283) to ensure that the revenue accruing to it from its estates shall be sufficient to meet its recurrent expenditure on its estates. Although a substantial surplus is achieved from its commercial properties ($492 million in 1985/86), the Authority is still some way from fulfilling this duty in respect of its domestic properties.
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The Authority's Estate Working Account
Domestic Properties for the year 1985/86 (at Annex A) shows a deficit of $209 million. For the years 1986/87 and 1987/88, the deficit is forecast to be $214 million and $137 million respectively, as shown in the Five Year Forecast at Annex B. The Forecast assumes moderate rent increases at an average rate of 17.5% for every two years. The deficit arises mainly from
mainly from the older Group
estates where rents are low and maintenance is increasingly costly. However, the redevelopment .of Mark I and in the II blocks and the increasing proportion of new estates housing
reduce gradually
It deficit.
is forecast that the Estate Working Account Domestic Properties will go out of the red in 1989/90, when а surplus of $59 million is expected. Any net surplus will be used to finance the rental public housing programme.
B
stock
will
the
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Rent review
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It is the established policy of the Housing Authority, well-known to its tenants and the general public,
for rents
domestic properties are reviewed
every years. In such reviews, due regard is given to setting rents
that
two
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