LAND AND HOUSING
153
an agreed number of years. The majority of lessees avail them- selves of the latter method of payment. For this reason the revenue in any one year is relatively small, but since payments will con- tinue to be made for upwards of 80 years, the total revenue involved is considerable. The 1960 terms provide for a maximum of 20 annual instalments and interest of 10%. On regrant, the boundaries of these lots are adjusted to conform with street im- provement lines, etc, and where land is needed for major replan- ning schemes the leases will not be regranted. In these latter cases the Government has announced its intention to pay ex gratia compensation for buildings.
There is a shortage of Crown land in the New Territories suitable for sale by public auction for concentrated development. Consequently there is much interest among developers in securing permission for the conversion of agricultural land to building status on payment of a premium. The amount of building land that can be obtained in this way depends upon the location of the site selected. In normal circumstances conversions for industrial or high density residential purposes are only permitted in areas for which layout plans have been approved, and it is necessary for landowners to surrender approximately five feet of agricultural land for every two feet of building land to be regranted. In each case the premium payable is equivalent to the difference in value of the land surrendered and the land regranted.
In June 1960 an explanation was circulated to Rural Committees and the Heung Yee Kuk, setting out the principles governing the conversion of agricultural land to building status by means of the surrender and regrant process, or the issue of building licences for village-type houses on agricultural land.
Government Land Transactions. There was a great demand for Crown land for industry in 1960 and the amount available for sale was larger than before. There was a marked speeding up in the development of factory sites which had been sold at Kwun Tong in 1957 and 1958, and this, coupled with the housing and other developments in the area, has increased confidence in the new town venture and has raised land values from levels between $7 and $23 per square foot two years ago to between $30 and $50 today. The premium on factory sites bought at Kwun Tong can be paid by instalments over 20 years with interest at 5%. At San