ENG-1961 — Page 202

164

LAND AND HOUSING

by private treaty. The premium charged in such cases varies from nothing for non-profit-making schools, etc, up to the full market value for public utilities.

This policy has been determined by the scarcity of all types of land. To ensure that land is put to the best possible use, all sales or grants are subject to a covenant in which the lessee undertakes to develop up to a certain rateable value within a specified period, the amount he must spend depending on the location and the type of development allowed. In addition to this covenant, new leases contain clauses controlling the use to which land may be put, to accord with town planning. They also provide for the annual payment of Crown rent.

The policy of sale by public auction ensures, by and large, that the person best able to develop the land in accordance with the terms of the lease obtains the right to do so, and that the com- munity receives the maximum return in cash. As the rent reserved is low, this policy does not, generally speaking, enable Government to obtain direct financial gain from any later increase in the value of the land after it has been sold. For this reason the very large increases in land values in recent years have resulted in relatively little increase in recurrent revenue from land, since most of the Colony's more valuable land is held on long leases.

In the earlier part of this century the leases of lots lying in the better residential districts of Hong Kong Island and Kowloon often included restrictions on the type and height of buildings. These restrictions have served their purpose well, but the demands of an increasing population now require more intensive development. It has therefore become the practice for these conditions to be modified in accordance with standard zoning schedules which preserve the amenities of the district while allowing more intensive development. Modifications of this sort are subject to the payment of a premium.

In recent years certain groups of 75-year Crown leases granted in the Colony's early days, chiefly in Kowloon, have reached their expiry dates. Government made public statements of its policy on these groups of Crown Leases in 1946, 1949 and 1960. Terms and conditions for new leases have already been agreed in a large number of cases, and other leases will become due for regrant in rapidly increasing numbers. Premia for the new leases may be