TNAG-0270-FCO40-306-Policy-on-housing-and-resettlement-in-Hong-Kong-1971 — Page 151

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Gur. 730. < 0'000733

CONFIDENTIAL

Rating and Valuation Department

MEMO

Deputy Colonial Secretary

To

Frora...

Ref.

(22)

RV 55/62 GC III

..in.

249021

Tel. No.

13th December, 1969

Date...

(for the attention of P. A. C. S. (L))-

Your Ref................in.. CR 9/3231/62 II

dated

Rental Situation

With reference to your memo (30) in CR 9/3231/62 II and our subse- quent discussion on the rental situation, you asked for a further report together with my recommendation as to the measures (if any) Government night be advised to consider in the light of information now available. More detailed enquiries are, as you are aware, already under way; but the results of such enquiries will not be available until early 1970. It was, however, felt that something should be put together now and, in order better to substantiate this report certain statistics have been compiled which do, I think, bear out the views already expressed. I attach

Annexe 'A Annexe 'B Annexe 'C' Annexe 'D'

Rental Indices 1964-1969

Examples of Recent Large Rental Increases Table on Frovision of Domestic Accommodation Description of categories used in defining

domestic accommodation.

I attach, also, notes on the compilation of the tables.

2.

A.

It is, I think, easier to look at the various sectors separately.

Domestic Accommodation

(a) Background: The overall picture of what has been provided can be seen from Annexe 'C', which also provides projections forward to 1973. Resettlement accommodation is tabulated separately as basically such accommodation replaces only what is lost by clearance of squatters and does not have any great effect on the private housing market. However, certain categories of persons living in private accommodation do eventually get housed in Resettlement Estates. The low completion of new housing in 1960 and 1961 gave rise to widespread rental increases which resulted in the enactment of the Tenancy (Notice of Termination) Ordinance in 1962 which briefly gave both domestic and business tenants six months' security of tenure at the existing rent. As the situation worsened during 1962 this security of tenure was extended and in 1953 Government introduced the Rent Increases (Domestic Premises) Control, Ordinance. This Ordinance generally allowed landlords to increase rents by 10% every two years but did not affect initial lettings; its aim was to control rent increases only. It also provided for larger increases in certain circumstances, but the procedure was deliberately made fairly complicated and difficult for landlords. The Rent Increases Ordinance generally worked fairly satisfactorily and achieved its aim of dampening down unreasonable rental increases in the domestic sector. This Ordinance was enacted to last for two years only; but was eventually extended for a further year until 1966, though not all of its provisions were spent of effect until 1968. In the meantime we have seen a tremendous surge of new private development during the years 1963 to 1966. The resulting excess of supply over demand coupled with the Banking troubles early in 1965 followed by the riots in 1967 caused developers to hold back with the result that we are now facing a shortage of accommodation in the private sector of the domestic market.

CONFIDENTIAL

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