Resistance from developers has pushed Tung Chee-hwa's plan to improve public housing close to failure, according to critics. Mr Tung wants developers to surrender one-third of flats in housing projects to the Government for sale at lower prices to public tenants or low-income families. In exchange, developers would get cheaper land. However, months of meetings have ended in deadlock because the proposal has been resisted by developers, who consider it an intervention in the free market. The Housing Society was appointed to help work out details of the new scheme, announced in the Chief Executive's October policy address, but little progress has been made. The Real Estate Developers Association is understood to be strongly opposing the scheme. An association source said: 'It would pose serious problems for marketing as we are facing two batches of buyers who are going to buy flats of the same quality at different prices. 'And the cheaper units [sold under government schemes] can be resold to public tenants after a number of years. For ordinary buyers, the question is: why do I have to pay so much to be a neighbour of a low-income family?' The association has offered to reserve a block for sale by the Government. It also wants a say in deciding which flats are given to the Government. Veteran housing affairs observer Ho Hei-wah, of the Society for Community Organisation, said Mr Tung's plan could flop. 'The private developers have no obligation to follow the Government plan,' he said. But he called on the Government not to back down. 'To let developers decide which flats are to be offered to the Government is not advisable because they will dump low-quality units,' he said. Provisional legislator Frederick Fung Kin-kee shared Mr Ho's views and accused the developers of 'creating excuses' to delay the scheme. A Housing Society spokesman said it was hoped a pilot scheme could be launched early next year. The Housing Department has proposed making it easier for new migrants to get rental housing. Under the proposal, if an applicant could show that half family had lived in Hong Kong for seven years, they would be eligible for a public flat. Current rules require the majority of an applicant's family to have lived here for seven years.