10
Given that:
(a)
the low
mobility
(b)
(c)
of
sitting tenants is partly attributable to the limited supply of assisted home purchase flats;
the financial analysis shows that the best economic return for use of the Territory's resources, including land, is obtained in the following order: private sector development, HOS/PSPS and public rental housing; and
the cost to Government of HPLS loans is the amount of interest foregone, which will be less than the net cost of one HOS/PSPS unit, which in turn is less than half of the net cost of one public rental unit,
the Private Sector Priority Strategy is recommended as the preferred strategy which best achieves the objectives identified in paragraph 7. This strategy neither reduces Government's commitment to provide housing nor adversely affects the eligibility and interests of those who are entitled to public housing under current policies. It provides the opportunity to clear all outstanding demand by 2001, which is not possible under the Existing Strategy. It also gives eligible households additional options regarding choice of
housing.
11
Since the affordability limits for various forms of housing depend on several volatile variables and for practical reasons, may not be accurately reflected in the income eligibility limits for various types of public housing flexibility between the provision of PRH, HOS/PSPS and privately developed flats must be provided. This flexibility will help to ensure that the housing resources and the capacity of the construction industry are optimally employed to satisfy all housing needs. In particular, the promotion of home purchase and especially the purchase of privately developed flats can reinforce the principle of providing housing subsidy on a need basis. This can help release scarce public resources for other purposes.
The implementation of the preferred strategy will require close coordination between the public and private sectors and flexibility must be incorporated in the planning machinery to
to respond to changes in the supply and demand variables.
A
12
The full report of the Review of Long Term Housing Strategy is at Annex A.
CONFIDENTIAL