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HOUSING

Housing Authority The Hong Kong Housing Authority, established under the Housing Ordinance, is a statutory body responsible for co-ordinating all aspects of public housing. The authority advises the Governor on all public housing policy matters and through its executive arm, the Housing Department, plans and builds public housing estates for categories of people determined by the authority with the approval of the Governor. It also manages public housing estates, cottage areas, temporary housing areas and transit centres throughout the territory; clears land for development; prevents and controls squatting; and plans and co-ordinates improvements to squatter areas. The authority plans, builds and manages, on behalf of the government, flats provided under the Home Ownership Scheme. It acts as the government's agent in the development of land and construction of flats for the Home Ownership Scheme, and also nominates purchasers for flats built under the Private Sector Participation Scheme.

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The authority meets quarterly under the chairmanship of the Secretary for Housing to review the work of six standing committees which are responsible for dealing with finance, building, estate management, home ownership, operations, and appeals. There are also two special committees responsible for reviewing housing subsidies to tenants of public housing and domestic rent policy. The authority comprises 14 unofficial members representing a wide spectrum of the community, and six official members from government departments directly involved in housing matters. All members are appointed by the Governor. There are also 21 co-opted members who sit on one or more of the committees. Many of the unofficial members of the authority also serve the community as Legislative Councillors, Urban Councillors, Regional Councillors, or as members of the Heung Yee Kuk, district boards and mutual aid committees. Together, they have a broad range of experience and representation and are able to apply a critical and conscientious perspective in determining public housing policies.

The Housing Authority is responsible for its own finance and management. Capital funding for the public housing programme is provided through government funds on the basis of a four-year expenditure forecast rolled forward annually. The government subsidises the programme by providing free land for rental and home ownership projects, and loans from the Development Loan Fund to finance the construction of rental estates. The Home Ownership Scheme is financed by the government which recoups its expenditure from the sale of the flats.

The authority obtains loans from the Development Loan Fund for the construction of the domestic portion of public rental housing estates. The loans are repayable over 40 years at an annual interest rate of five per cent. However, in order to alleviate the cash flow burden on the authority, the government does not require the interest to be paid in cash, The interest charge must, nonetheless, be fully accounted for, along with the free land provided, in the Housing Authority's balance sheet as part of the government's contribu- tion to public housing. On March 31, 1985, the government's contribution stood at $21,626 million which included, among other subsidies, $18,446 million for free land and $1,392 million in interest foregone. Furthermore, the 40-year repayment period for loans means that, having regard to the declining value of money over time, the government recovers only a fraction of the real value of the housing loans.

In the 1984–5 financial year, recurrent expenditure on the Housing Authority's domestic rental properties - covering mostly management and maintenance costs - totalled $1,751 million while income from domestic rents was $1,593 million, resulting in a deficit of $158 million. This deficit arose because the low rents in old estates were insufficient to meet