ENG-1964 — Page 141

116

LAND AND HOUSING

To ensure that scarce land is put to the best possible use, all sales or grants are subject to a covenant in which the lessee under- takes 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 the 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.

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 community receives the maximum return in cash. As the rent reserved in the lease 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 increase in land value in recent years has 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 district 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 groups of 75-year Crown leases granted in the Colony's early days, chiefly in Kowloon, have been expiring. Terms and conditions for new leases have already been agreed in a large number of cases. Premiums for the new leases may, subject to certain conditions, be paid either in a lump sum or by instalments over an agreed number of years, most lessees preferring the latter method. Terms announced in 1960 provide for a maximum of 21 annual instalments and interest of 10 per cent. On regrant, the boundaries of these lots are adjusted to conform with street im- provement lines, etc and where land is needed for major replanning schemes, the leases will not be regranted. In these latter cases the