HOUSING AND LAND
101
Major factors built into the framework of the Home Ownership Scheme were that it should be non-profit-making, self-financing, and in no way detrimental to the buoyant property market. It was decided, therefore, that flats would be sold at prices based on the actual costs of land, design, construction and marketing. Experience has shown that these prices are at least 20 per cent below market levels. Because of the relatively low incomes of eligible purchasers, special mortgage terms have been arranged through leading banks and financial institutions, which offer reduced interest rates and extended repayment for up to 15 years. To avoid quick profit-taking, purchasers may not sell their flat within five years, except back to the Housing Authority at the original price. Management control of the completed estates is retained by the authority.
Eligibility for the scheme is confined to two distinct groups - public housing tenants who are prepared to surrender their low-rent flats, and families living in the private sector whose incomes fall within a specific bracket above the cut-off point for rental public housing. Each category is also required to meet a number of other criteria concerning family composition and length of stay in Hong Kong. However, unlike private sector families applying, public housing tenants are not bound by any income limit and are not disqualified by existing ownership of domestic property. These concessions are granted as an inducement to better-off public housing tenants to relinquish their subsidised flats in favour of families who genuinely need public housing. The benefits of this policy have already been felt through the recovery of some 4,000 units for re-allocation.
Flats built under the scheme are up to the standard of good private developments, with modern fittings and door-phone security systems. Sizes range from 35 to 65 square metres in net area with two or three bedrooms, kitchen, bathroom and living room. Prices for the Phase I flats sold in 1978 when the income limit for private sector applicants was $3,500 a month - ranged from $90,000 to $166,000. To keep pace with inflation, the income limit was raised to $5,000 in 1980 when there were two sales exercises for flats priced at $151,000 to $271,000. All phases were heavily over-subscribed and it was necessary to hold ballots to determine the successful applicants. Separate draws were held for the two categories of applicant to provide an equal share of flats between the respective groups.
The two lists were then combined into an overall priority list and each applicant was interviewed to verify eligibility. Eligible applicants could then choose, in order of priority, any flat remaining unsold and make a 10 per cent down-payment. Anyone found to have made a false statement was automatically disqualified and a small number of applicants were subsequently prosecuted.
A further three home ownership projects are being built by private developers under the Private Sector Participation Scheme. As the name implies, the scheme is designed to give private sector interests the opportunity to contribute their expertise towards a public housing project. The basic specifications and unit price for the flats is stipulated by the government and the developers tender for the land reserved for the project. Processing and screening of applicants is carried out by the Housing Department in the same way as for the Home Ownership Scheme. The flats in two of these developments were sold in late 1979 and the third is expected to be sold within the next two years.
The planned scheme for the middle-income group will be run on similar lines to the Private Sector Participation Scheme, although the flats will be slightly larger.
Urban Housing and Redevelopment
Private development and some 100 public housing estates occupy most of the developable land on Hong Kong Island and in Kowloon, where population densities are among the