Encl.
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sites without incurring expenditure on site formation, access, etc., amounting to as much as 25% of the total cost of housing schemes which would be considered quite out of proportion in most other countries. The prevail- ing land hunger in Hong Kong compels private development of better class housing to accept these costs but, if they were to be included in the capital outlay on which the rents payable by the low wage strata of the population are calculated, these rents would rise beyond their means. The same considerations preclude the possibility of embark- ing on a programme of temporary housing since both the cost of site development and the shortage of land make it essential that we concentrate on multi-storeyed blocks of small flats.
6.
While, therefore, I agree in other respects with your view that such housing should be self-supporting, it is my intention as an essential ingredient of the scheme outlined above, to apply in due course for a grant from Colonial Development & Welfare funds to meet the cost of site formation, access roads and the installation of water and drainage, which would be undertaken by the Public Works Department, while Government would make interest bearing loans to an Improvement Trust to finance, as the first stage, the construction of some 2,500 small flats on the developed sites. The grant required from Colonial Development & Welfare funds for this purpose is expected to be in the region of $3 million, Government's contribution by way of a loan being approximately $15 million. These figures are only tentative and the former one will naturally be dependent to a large extent on the sites selected, but I have already instructed the Director of Public Works to suggest four sites and to prepare estimates of the cost of developing them, including levelling and the provision of access roads, water and drainage connections. Care will be taken in selecting sites to ensure that they do not conflict with the recommendation of Sir Patrick Abercrombie on zoning. The two sites chosen for the Pilot Scheme referred to below fall within a light industrial zone, but section 5 of Part II of Sir Patrick's report does not preclude housing therein..
7.
I now seek your approval to proceed generally on the basis outlined above, and your approval in principle of a grant from Colonial Development & Welfare funds to meet the cost of developing sites and providing road access, water and drainage connections for approximately 2,500 small flats.
8.
As a first instalment of this programme I enclose a memorandum requesting that an immediate grant of £13,500 be made from the Colonial Development & Welfare Fund for the purpose of developing two sites for blocks of workers' flats, and providing road access, water and drainage connections thereto. The usual financial summary and full estimates of cost are submitted in Appendices A and B to the memorandum. In this instance it has been possible to find two sites which are relatively easy and cheap to develop, but I see little prospect of this being repeated and I anticipate that for fur- ther instalments of the programme the proportion of the Colonial Development & Welfare grant to the total cost will require to be considerably greater
9.
As indicated in the attached memorandum, advantage will accrue from the fact that the Hong Kong Housing,ciety is prepared to start at once with the erection of these flats, and to merge its organisation with that the Improvement Trust when constituted, and I seek your approval to make a loan on terms consistent with those proposed for the Authority
No comments yet.
Private notes are available after approval.