ENG-1990 — Page 237

HOUSING

198

The authority has contributed many welfare amenities over the years including 10 Hostels for the Elderly at a cost of over $20 million and an ongoing estate schools extension programme encompassing nearly 40 schools at an average cost of $1 million per school.

Home Ownership Scheme

The Home Ownership Scheme was established in the late 1970s to help lower-middle- income families and public housing tenants to become home owners by providing flats for sale at prices below market value.

Before April 1988, the Housing Authority acted on the government's behalf in admin- istering the HOS, using government funds. After re-organisation, the authority took over the responsibility for the scheme.

Private sector applicants for HOS flats may not own domestic property and are subject to a household income limit of $11,500 per month. These restrictions, however, do not apply to public rental estate tenants. The income restriction is also not applicable to residents of temporary housing areas and cottage areas managed by the authority, households displaced by clearance of squatter areas for development, natural disaster victims and junior civil servants.

Since the scheme started in 1978, a total of 136 000 flats, including 44 000 produced under the complementary PSPS, have been sold to eligible families. About 45 per cent of - these families were public housing tenants who were required to surrender their rental flats to the authority on obtaining HOS flats. Since the beginning of 1985, 8 500 flats have been sold to prospective public housing tenants, who were, in return, required to forego their rights to rental accommodation.

In order to encourage public housing tenants to become home owners and therefore give up their rental accommodation for families who are in greater need of public housing, public housing tenants are accorded higher priority than private sector applicants in selecting HOS flats. This incentive is also extended to prospective public housing tenants, so that the rental flats which would have been allocated to them can be let to applicants in greater need.

The authority ensures the provision of adequate mortgage funding from financial institutions for the purchase of HOS and PSPS flats. In return for the authority's indemnity for an institution's loss in case of default, purchasers are able to enjoy favourable mortgage terms provided by over 50 financial institutions. Public sector priority status purchasers are able to borrow up to 95 per cent of the purchase price and private sector purchasers up to 90 per cent, with repayment periods of up to 20 years.

Implementation of the Long Term Housing Strategy has required an increase in production of HOS/PSPS flats from the previous level of 10 000 flats a year to around 17 500 flats a year for the period 1989 to 1994. Of these, about 30 per cent of annual production will be upgraded flats in blocks originally intended for rental housing estates, thus providing a wider choice of flat sizes, standards, locations and prices.

During 1990, a total of 17 182 flats were sold, starting in January with 5 867 flats in Phase 11C. Applications were invited for a further 5 831 flats in Phase 12A in April, and over 55 800 applications were received.

In August another 5 484 flats were put up for sale, and in December more HOS/PSPS flats were offered.