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9. One witness dealt with the question of Crown Leases for a term of 75 years without the option of renewal. He had no doubt that whatever the legal position might be, the question was affecting sales. He thought that when properties were leased for 75 years, the Crown tenants, particularly Chinese, thought that the leases would be renewed at an increased rental and did not realise that they would, in effect, have to "buy the property again". We think it possible that former Govern- ment practice may have contributed to this belief. We have not had time to ascertain how many of these leases are now current, but we agree with the witness that pur- chasers for the properties affected will not readily be found until renewal is assured and the approximate cost of renewal indicated. A point to be remembered is that a prospective Crown lessee must accept the term of years offered by the Crown or nothing. He cannot in this Colony acquire the freehold or bargain for a longer term.

The

10. The rising cost of building at the present time must hamper development. The Executive Engineer in charge of the Buildings Ordinance Office, referred us to his Annual Report for 1937 (not yet published) in which he says: "The large increase in the cost of building materials which occurred during the middle of the year was reflected in a marked falling off in the number of plans deposited during the last quarter". A witness of experience gave us figures showing large increases in the cost of cement, steel bars for reinforced concrete houses, and hardwood.

11. We think that everything possible should be done to remove the landlords' difficulties indicated in the foregoing paragraphs and to restore confidence in house property, but we doubt whether any immediate private development can be hoped for. We understand that the question of the building of various types of houses by Government is now being considered by the Housing Commission, and we do not feel that any useful purpose can be served by our attempting, in a rapid survey, to cover ground which is being explored by experts. We merely desire to observe that if the provision of additional accommodation is accepted as the correct solution to the present difficulty, and if private enterprise will not supply that accommodation, the only alternative is for Government to undertake the necessary construction, but we would add that any action calculated to discourage private enterprise should be avoided in the interests of the Colony as a whole. It should also be remembered that there is an enormous untapped reservoir of potential refugees across the border, and that any cheap houses erected may prove to be merely the receptacle for its overflow, "Anything that we build", said the Government Assessor of Rates, "is certain to be filled up while the present conditions last, but when the property market (i.e., the letting market) is normal again, there may be a lot of empty houses". If Government sees fit to erect houses, they might be reserved for the present for permanent residents of the Colony who cannot find alternative accommodation.

PART VI.

Miscellaneous and Conclusion.

1. We learned that in two cases notice to quit had been given to a number of tenants with the object of converting premises into factories, and we believe that other instances of this nature are to be found. The establishment of factories is to be encouraged, but they should if possible be prevented from occupying residential buildings. We understand that this question is also being considered by the Housing Commission, and we leave it to that Commission to make recommenda- tions.

2. We received a communication from a group of Admiralty Civil Servants. It seems to us that the Navy, Army, Air Force and Civil Service Authorities might. consider whether they could provide further accommodation for their respective services, meanwhile granting such allowances in lieu of quarters as may be adequate

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