ENG-1981 — Page 152

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HOUSING AND LAND

35 000 rental and Home Ownership flats a year is provided through the Government Budget, which contains a four-year expenditure forecast rolled forward annually. The government has emphasised that this rate of production is not a maximum target and that, when economic circumstances permit, expansion can be considered.

Construction

The government housing programme aims at producing 180 000 flats, for rent and for sale, over the next five years. Some 28 building contracts were let during 1981, at a cost of $2,752.1 million. At the end of the year, 79 building contracts, including 11 for Home Ownership Scheme projects, were in progress to provide 116 000 flats over the next three years. Four flatted factory projects were also under construction.

Home Ownership Scheme

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To meet the community's growing aspirations for home ownership, the government has established a scheme that enables lower-income families to buy their own flats at reasonable prices. Run by the Housing Authority, the scheme has already provided cost-price homes for some 15 000 families and a further 45 000 flats are scheduled to be built this decade. Plans are also underway to provide a similar limited scheme for middle-income families who do not qualify for the Home Ownership Scheme and who are unable to afford flat prices on the open market.

In view of the demonstrated and growing aspirations of the lower and lower-middle income groups towards home ownership, the Governor, in May 1981, appointed a working party chaired by the Secretary for Housing to review the existing Home Ownership Scheme and the Private Sector Participation Scheme and to make recommendations on how these schemes may be improved in order to provide more flats for the income classes covered by them.

As a result of recommendations approved by the Governor-in-Council in September, which will apply to all future phases of the scheme, prices should remain well below market levels and within the means of the families for whom the flats are intended.

Eligibility for the scheme is confined to two distinct groups - public housing tenants who are prepared to surrender their low-rent flats, and families living in the private sector whose incomes fall within a specific bracket with a maximum eligibility level fixed above that for public rental housing. Each category is also required to meet a number of other criteria concerning family composition and length of stay in Hong Kong. However, unlike private sector families who apply, public housing tenants are not bound by any income limit and are not disqualified by existing ownership of domestic property. These concessions are granted as an inducement to better-off public housing tenants to relinquish their subsidised flats in favour of lower income families who have more need of public rental housing. The benefits of this policy have already been felt through the recovery of some 7 500 units for re-allocation.

Flats built under the scheme are up to the standard of good private developments, with modern fittings and door-phone security system. Sizes range from 35 to 65 square metres in net area with two or three bedrooms, kitchen, bathroom and living room. Prices for the Phase I flats - sold in 1978 when the income limit for private sector applicants was $3,500 a month - ranged from $90,000 to $166,000. To keep pace with inflation, the income limit was raised to $5,000 in 1980 when flats produced under two more phases were sold, at prices ranging from $151,000 to $271,000. A further revision to $6,500 was made in 1981 when further flats were sold at prices from $170,000 to $375,000.