TNAG-0270-FCO40-306-Policy-on-housing-and-resettlement-in-Hong-Kong-1971 — Page 48

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C.S. 84

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XCR(70)303

In the following paragraphs each of the Housing Board's re- commendations is considered separately in the light of the unofficial and official comments which have been received. Certain of the Board's con- clusions, namely items (g), (i) and (m), have not been made the subject of comments since they await further specific comment by the Board.

A.

Rents in outlying Estates

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The Board recommends that, with the passage of time and the increasing prosperity of the population, the time has come for a review of the existing rental framework for both Resettlement and Government Low- cost Housing with a view to providing a differential between central estates and those in outlying areas.

6

Resettlement domestic rents are designed to recover the original capital costs, including assumed standard costs for land, amortised over 40 years at 32% interest per annum plus all annually recurrent expenditure including the cost of administration and maintenance.

7

Government Low-cost Housing domestic rents are designed to recover the original capital costs (including an element representing one third of the full market land value of the estate for which the rents are cal- culated) amortised over 40 years at 5% interest per annum (for some of the earliest estates a rate of 31⁄2% was used) plus all annually recurrent expendi- ture including the cost of administration and maintenance by the Housing Authority).

8

Rents for Mark I and II Resettlement Blocks were revised up- wards following the 1964 White Faper on Resettlement Folicy and again more recently to cover the cost of individual electricity supplies installed by Government. There has also been a change in the original rents assessed for the Mark III Resettlement Blocks to cover the cost of installation of individual water supplies. Otherwise domestic rents, once assessed, have remained unchanged.

9

An investigation into the costing of Government Low-cost Housing is now in progress and this may well lead to a recommendation for increases in rentals of this type of housing where management costs are not being fully covered. Otherwise the rents have remained unchanged since first assessed for each estate.

10

Both the Urban Council in respect of Resettlement Estates and the Housing Authority in respect of Government Low-cost Housing have endorsed the Board's recommendation. Whilst there is logic in the Board's suggestion about rent differentials, the matter is complicated by a number of factors:

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