Sessional_Paper_1946 — Page 41

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APPENDIX 9.

HOUSING FINANCE-“A”.

1. It has been made abundantly clear from the detailed reports received from individual members of this Committee and during the course of our deliberations that there is a very serious shortage of dwelling accommodation and that, unless immediate steps are taken, this shortage will become acute on an increasingly rapid scale.

2. It is likewise clear that there are three alternatives if sufficient housing is to be

provided:

(1) Government to go in for new construction.

(2) Government to undertake the repair of private property themselves.

(3) Government to give sufficient encouragement to property owners to provide

the necessary accommodation.

3. If the first alternative is adopted,

(a) It would appear that Government would have to go in for large housing schemes, development of new areas, and the construction of suitable houses for various sections of the community. In England, Government expenditure of over £240,000,000 was envisaged for the construction of 165,000 temporary houses.

(b) As in England, it is probable that houses could only be produced at a substan- tially higher cost than would be justified by the rentals obtainable for the accommodation provided. This would mean a very low return on the capital outlay, or, alternatively, a capital loss by their sale at well below cost.

4. If the second, a partial solution of the problem might be found in the following suggestion which combines private ownership with Government control:-

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Government to lease large blocks of damaged property, such as apartment buildings, terraces of houses, and tenements, for a period of say five years. Government would then repair this accommodation and sub-let the same; the repaired property to revert to the owners at the end of the period of the lease.

One advantage of this scheme is that Government, whilst not entering into competi- tion with property owners, retains control of letting and may give preference to that section of the community employed in the essential work of rehabilitation.

5. If the third alternative is adopted.

(a) Money for reconstruction should be provided at a low rate of interest, say

2%.

(b) Government should purchase building materials in bulk both by importation and by utilising to the fullest extent local production potential. Such materials should be made available to property owners, conditional on their repairing their houses.

(c) Prices of building materials have risen steadily since 1938, thus discouraging construction. If reconstruction is to be encouraged, costs of materials must be subsidised at least to a level not exceeding pre-war prices.

(d) As an additional incentive, landlords who spend a minimum sum (to be fixed in relation to the size of their property) should be allowed to increase their rentals for such property by 50% over and above 1941 rentals.

(e) Crown leases due to expire within a short time should be renewed for a period

of several years at a nominal fee.

6. This memorandum is submitted for consideration with a view to formulating policy.

Hong Kong, 11th February, 1946.

(Signed) LAWRENCE KADOQRIE.