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HONG KONG ANNUAL REPORT
Land Policy. The Government's basic policy is to sell leases to the highest bidder at public auction; all land disposed of for commercial and industrial purposes and residential sites sold to the general public are dealt with in this way. Land required for various types of special housing projects described later in this Chapter, for public utilities, and for schools, clinics, and certain other charitable purposes is usually granted by private treaty. The premium charged in such cases varies from nothing for non-profit- making schools, etc. up to the full market value for public utilities.
Policy concerning the sale or grant of Crown land is governed by the scarcity of all types of land. In order to ensure that avail- able Crown land is put to the best possible use, all sales or grants are subject to a covenant in which the lessee undertakes to develop the lot up to a certain rateable value within a specified period, the amount of expenditure depending on the location and type of development allowed. In addition to this covenant, new leases contain clauses controlling the use to which land may be put, in accordance with town planning. They also provide for the annual payment of Crown rent.
The policy of sale by public auction ensures, by and large, that the person best able to develop the land in accordance with the terms of the lease obtains the right to do so, and that the com- munity receives the maximum return in cash for such leases. Due to the low Crown rent reserved, this policy does not, generally speaking, enable the Government to derive direct financial gain from any subsequent increase in the value of the land after sale. For this reason the very large increases in land values in recent years have resulted in relatively little increase in recurrent revenue from land, since the bulk of the Colony's more valuable land is held on long lease.
In the earlier part of this century the leases of lots lying in the better residential districts frequently included restrictions limiting the type and height of buildings. These restrictions have served their purpose well, but the demands of an increasing population now require more intensive development of these areas. It is there- fore the practice now for lease conditions of this sort to be modi- fied in accordance with standard zoning schedules which, while preserving the amenities of the district, are designed to allow more intensive development subject to the payment of a premium.