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HOUSING
ment's agent in the development of land and construction of flats for the HOS, and also nominates purchasers for flats built under the PSPS.
The authority meets quarterly under the chairmanship of the Secretary for Housing, to review the work of six standing committees responsible for dealing with finance, building, estate management, home ownership, operations and appeals. In addition, there are three special committees responsible for reviewing domestic rent policy and housing subsidies to tenants of public housing, and for ensuring the smooth implementation of the Extended Redevelopment Programme. The authority comprises 18 members representing a wide spectrum of the community, and six members from government departments directly involved in housing matters. All members are appointed by the Governor. There are also 19 co-opted members, who sit on one or more of the committees. Many of the members of the authority also serve the community as Legislative Councillors, Urban Councillors, Regional Councillors, or as members of the Heung Yee Kuk, district boards and mutual aid committees. Together, they have a broad range 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 finance and management. Capital funding for the public housing programme is provided by the government on the basis of a four-year expenditure forecast rolled forward annually. The government subsidises the programme by providing free land for rental and home ownership projects, and loans from the Development Loan Fund to finance the construction of rental estates. The Home Ownership Scheme is financed by the government which recoups its expenditure from the sale of the flats.
The authority obtains loans from the Development Loan Fund for the construction of the domestic portion of public rental housing estates. The loans are repayable over 40 years at an annual interest rate of five per cent on a reducing balance. However, to alleviate the cash flow burden on the authority, the government does not require the interest to be paid in cash. The interest charges must, nonetheless, be fully accounted for, along with the value of the free land provided, in the authority's balance sheet as part of the government's contribution to public housing. On March 31, the government's contribution stood at $27,210.8 million, which included, among other subsidies, $23,475.3 million for free land and $1,843.2 million for interest foregone. Furthermore, the 40-year repayment period for loans means that, having regard to the declining value of money over time, the government recovers only a fraction of the real value of the loans.
In the 1985-6 financial year, recurrent expenditure on the Housing Authority's domestic rental properties - covering mostly management and maintenance costs – totalled $2,061.2 million, while income from domestic rents was $1,940.8 million, resulting in a deficit of $120.4 million. This deficit arose because the low rents in old estates were insufficient to meet management expenses and the high cost of maintenance and improvements. The authority was able to offset this deficit from income derived from its commercial properties which in the same period generated $1,097 million against an expenditure of $540.3 million. Surplus funds are used to help finance the public housing construction programme.
The authority spent $2,438 million on its capital programmes, of which $1,466.5 million was financed by the government (mostly loans on concessionary terms) with the balance being financed from the authority's funds. In addition, the authority, acting as the government's agent, spent $653.8 million on the construction of flats for sale under the Home Ownership Scheme.