TNAG-0672-FCO40-821-Legislation-for-Crown-lands-in-Hong-Kong-1977 — Page 145

CONFIDENTIAL

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(b)

(c)

3

XCC(73)100

the rate of interest on loans made to the Housing Society from the Development Loan Fund will be the same as that applicable to the Housing Authority in respect of capital loans for the development of new housing projects. As has already been pointed out in paragraph 4 above, this rate of interest will enable the Housing Society to charge rents (and to sell flats) at below the market value. Clearly, this involves an element of subsidy towards housing and should thus be deemed to be within the public sector;

the land required for redevelopment will be made available by private treaty grants to the Housing Society, at the cost of acquisition. It could be argued that this represents a further element of subsidy.

Finally, it is proposed that this scheme be subject to review at the end of four years, as regards both its effectiveness and its financial implications. To sum up, then, to enable the Society to proceed with detailed consideration of this scheme it requires the following assurances;

(i)

(ii)

(iii)

that the scheme has Government's support;

that Government will, where necessary, resume suitable properties (at the Housing Society's expense) and will assign them to the Society for redevelopment within the terms of this scheme;

that Government will lend the Society about $100 million over a 4-year period.

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Honourable Members will be asked to advise whether this scheme should be approved in principle subject to acceptance of the financial aspects by the Finance Committee of the Legislative Council.

(The Secretary for Housing (Mr I. M. LIGHTBODY) will attend before the Council for the discussion of this item).

16th November 1973

(CR 11/736/73)

COUNCIL CHAMBER

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