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HOUSING
housing estates, Cottage Areas, Temporary Housing Areas and Transit Centres throughout the territory; clears land for development; prevents and controls squatting, and plans and co-ordinates improvements to squatter areas. On behalf of the government, the authority plans, builds and manages flats provided under the HOS. It 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 on finance, building, management, home ownership, operations, and appeals. In addition, there are two special committees respon- sible for ensuring the smooth implementation of the Extended Redevelopment Programme and overseeing the clearance of the Kowloon Walled City.
The authority comprises 19 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 21 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, Urban or Regional Councillors, or as members of the New Territories Heung Yee Kuk, district boards, area committees 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 on concessionary terms from the Development Loan Fund to finance the construction of rental estates. The HOS is financed by the government, which recoups its expenditure from the sale of flats produced under the scheme.
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 the 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 $32,391.8 million, which included, among other subsidies, $28,133.5 million for free land and $2,365.2 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 1986-7 financial year, recurrent expenditure on the Housing Authority's domestic rental properties - covering mostly management and maintenance costs – totalled $2,336 million, while income from domestic rents was $2,250.1 million, resulting in a deficit of $85.9 million. This deficit was due to the fact that the low rents in old estates were insufficient to cover management expenses and the high cost of maintenance and improve- ments. The authority was able to offset this deficit from income derived from its commercial properties which in the same period generated $1,206.2 million against an expenditure of $608.9 million. Any surplus funds left are used to help finance the public housing construction programme.
The authority spent $2,783 million on its capital programmes, of which $1,268.9 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