The Housing Authority could face losing part of its power in a major revamp headed by Chief Secretary for Administration Anson Chan Fang On-sang.
A new financial deal with the Government is also expected, according to initial ideas.
The overhaul, prompted after a spate of building scandals at authority sites over the past two years, will also touch on the role of and relations between the Government, the authority, and the Housing Society in formulating housing policies.
One option being considered is to centralise housing policy-making mechanisms.
According to present practice, both the authority and society build rental flats for lower-income groups and also sell flats to middle-income families. The two operate independently and the Housing Bureau co-ordinates their policies with the private sector.
A bureau source said: 'There are opinions that the authority has paid too much attention to building flats for sale. Perhaps, we can let it concentrate more on rental housing.'
As the sale of Home Ownership Scheme flats provides a major source of income for the authority, a new deal will be needed to provide it with more money.