TNAG-0912-FCO40-1122-Policy-on-housing-and-resettlement-in-Hong-Kong-1979 — Page 5

Such measures would only be necessary for non-public- housing applicants, as all family members of public housing applicants are identifiable through estate offices, and they are required to surrender their estate flat. There is thus no advantage to be gained by artificially splitting the household. The pattern of sales has suggested that public housing applicants are more concerned about the location and quality of the Home Ownership flat they are purchasing and in which they will actually live, than other applicants who may have other accommodation which they are not obliged to give up and who may be as much concerned with potential capital gain as with the accommodation acquired.

Residential Qualification

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A minimum residential qualification of five years is required in respect of applicants for Home Ownership flats. This is to ensure that prospective flat buyers who are not normally resident in Hong Kong, or who have lived here for short periods only, do not compete with those who have made Hong Kong their home. It is recommended that this rule should remain unchanged.

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Also, for a household to be eligible, the applicant and at least one member of his family must be permanent (black seal identity card) residents. This rule resulted in the disqualification of 11 applications where the applicant was a permanent resident but his wife was a temporary resident (green-seal identity card). It is now felt that the rule was perhaps harsh and that applications from households where the applicant is a permanent resident should be accepted.

Housing Assistance from Employers

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The rationale behind the disqualification of employees receiving housing assistance from their employers was that Government should not discourage employers from assisting their employees. 52 applicants were disqualified under this rule, the majority of them being bank employees who are entitled to staff housing loan normally not exceeding 60 months' salary of the borrower, or 70%-80% of the flat selling price, whichever is the lesser, and at very advantageous rates of interest. An analysis of the housing loan which these disqualified applicants could obtain showed that 42% could obtain a loan of $50,000 to $100, 000, while another 42% could obtain a loan of $100,000 to $150,000. The se applicants would have difficulty in purchasing a flat in the private sector comparable to the Home Ownership flats, unless they make

CONFIDENTIAL #