116
HOUSING
Department, plans and builds public housing estates for categories of people determined with the approval of the Governor; manages public housing estates throughout the territory -- including cottage areas, temporary housing areas and transit centres; clears land for development; prevents and controls squatting; and plans and co-ordinates improve- ments to squatter areas. The authority also plans, builds and subsequently manages, on behalf of the government, flats provided under the Home Ownership Scheme. Legal powers to carry out these functions are provided by the Housing Ordinance. The Housing Authority also acts as the government's agent in the building and management of flatted factories, which provide small factory units for industrial undertakings displaced by development clearances.
The Housing Authority is chaired by the Secretary for Housing and comprises, in addition, 14 unofficial and six official members. Six committees, each chaired by an unofficial member, oversee building, finance, estate management, operations, the Home Ownership Scheme and appeals (from tenants whose tenancies are terminated). These committees are augmented by co-opted members who are not Housing Authority members. Unofficials constitute a two-thirds majority in the authority, and in total there are 28 serving on the authority and its committees. Many of these members also serve the community as Legislative Councillors, Urban Councillors, Heung Yee Kuk members and District Board members. Together, they have a very broad base of experience and representation and are able to apply a critical and conscientious perspective in determining public housing policies.
The Housing Authority is responsible for its own finances and management. Capital funding for the public housing programme is provided through government funds on the basis of a four-year expenditure forecast rolled forward annually. The government subsidises the programme by providing free land for both rental and home ownership projects, and providing loans from the Development Loan Fund (DLF) to finance construction of rental estates. The Home Ownership Scheme is funded by the government which recoups the money from sales of the cost-price flats. Loans from the DLF are repayable over 40 years at an annual notional interest rate of five per cent; however, the interest is not charged, being accounted for - along with land value in the Housing Authority's balance sheet as part of the government contribution. Up to March 31, 1983, this subsidy amounted to $12,002 million - including $9,613 million-worth of free land and $626 million in interest not collected. Furthermore, the 40-year repayment period for loans means that, having regard to the declining value of money over time and interest forgone, the government recovers only a fraction of the real value of those loans.
In the 1982-3 financial year, recurrent expenditure on the Housing Authority's domestic rented properties - covering mostly management and maintenance costs - totalled $1,164 million while income from domestic rents was only $1,028 million, resulting in a deficit of $136 million. This deficit arises because the very low rents on old estates are insufficient to meet management expenses and the high cost of maintenance and improvements. The Housing Authority is able to offset such loss from income derived from its non-domestic (commercial) properties which in the same period generated $577 million against expendi- ture of $302 million. Any surplus funds are used to help finance the housing programme.
During 1982-3, the Housing Authority spent $2,794 million on its capital programmes of which $2,256 million was financed by the government (mostly loans on concessionary terms) with the balance being financed from Housing Authority funds. In addition, the Housing Authority, acting as the government's agent, spent $716 million on flats for sale under the Home Ownership Scheme.