$780,000 or about $1,806 a room, and to this figure was added the sum of $230,000 for a site of 23,000 square feet, and $15,600 for supervision by the Public Works Department (2% of the cost of construction), making a total of $1,025,600 or $2,374 a room. On the basis of these figures and on the assumption that the annual recurrent cost would amount to $17,200 for each block, the rent for a standard sized room was assessed at $13 a month, to which $1 a month was added for water. However, with the doubling of water charges, rentals were increased in July 1965 while rising recurrent expenditure on maintenance and management accounted for a further increase in November 1965, bring- ing the present gross rent of a standard room in Mark I & II blocks to $18 in the Urban Area.
108. The underlying principles set out above have been followed ever since, with the inclusion of rates in the all-in rent in the case of self-contained flats, which made their first appearance in 1957. The rents charged for Mark III accommodation are higher than for standard Mark I and II flats. They attract rates and include water charges, each itemized separately in the gross rent; they also reflect the substantial rise in building costs and administration during recent years and the increasing complexity and expense of site formation. A standard room of 129 square feet in a Mark III block in the Urban Area costs $31.50 a month, made up of $23 rent, $5.50 for rates and a $3 water charge. The charge in the New Territories is slightly lower, $29.50, because rates are assessed at 11% of the rateable value against 17% for the Urban Area.
109. During the year under review, the first 16 storey Mark IV blocks were completed. Rents for them have been fixed in accordance with previous policy; the gross rent payable included elements for water charges and rates. In the Urban Area the rent for a standard room of 129 sq. ft. is $35 comprising $26 basic rent, $6 rates and $3 water charge whilst in the New Territories the rent is $33 because of lower
rates.
110. It will be seen that the rentals for the Mark IV blocks are almost double that of the old Mark I & II blocks owing not only to increased building costs and recurrent expenditure but also because of the more sophisticated standards of building and facilities provided. However, tenants are still able to afford these rents; bad debts amount to about .025% of the total revenue collected.
38