22 May 2019
The Housing Authority feels a 10 percent increase in rents should be affordable for public housing tenants given the rise in income levels. Photo: HKEJ
The Housing Authority feels a 10 percent increase in rents should be affordable for public housing tenants given the rise in income levels. Photo: HKEJ

HA proposes 10% rent hike for public housing tenants from Sept

The Housing Authority (HA) has suggested raising rents for public housing tenants by the maximum amount allowed under the current rental adjustment mechanism.

According to a document submitted by HA’s Subsidised Housing Committee to the Legislative Council on Thursday, public housing rents should be raised by 10 percent from September.

The move will affect about 756,000 households, the Hong Kong Economic Journal reports.

Once approved by Legco, a 640-square-foot unit at Tsui Lok Estate in Chai Wan will see its monthly rent go up to HK$5,159 from HK$4,690 at the moment, or an increase of HK$469, which tops those at all the other public housing units, the document showed.

In comparison, the rent of a 100-square-foot unit at Tin King Estate in Tuen Mun will only be raised to HK$380 from from HK$346, with its increase of HK$34 being the smallest of all.

The Subsidised Housing Committee is scheduled to meet on July 17 for further discussions on the matter.

Under the rent review and adjustment mechanism set by the Housing Ordinance for public rental housing, the HA would conduct a rent review every two years and vary the rent if the change in the income index between the first and second periods covered by the review is more than 0.1 percent.

The HA will increase the relevant rent by the rate of the increase of the income index or 10 percent, whichever is less, which effectively “caps” any rent increase at 10 percent.

In its proposal, the HA said survey data from the Census and Statistics Department show the average monthly income of families living in public rental flats was HK$22,950 in 2017, up 11.59 percent from that seen in 2015.

As per data, cumulative increase of those families’ income as a whole was 88 percent from 2007 to 2017, compared to the 53.3 percent cumulative increase of their rents in the same period.

As such, a source, citing the data, said the HA came to a conclusion that a 10 percent rent increase this year, which will be the same as that imposed in 2012, 2014 and 2016, respectively, should be affordable for the families, HKEJ reported.

The source added that rates concession offered this year is tantamount to a rent exemption of 1.5 months. Also, one needs to bear in mind that the government will give a cash handout of HK$4,000 to qualified residents, as well as other subsidies.

According to the document, the proposed rent increase of 10 percent can help lower the deficit resulting from public rental housing operations in this fiscal year that began in April, to HK$50 million from HK$1.1 billion.

However, lawmaker Wilson Or Chong-shing from the Democratic Alliance for the Betterment and Progress of Hong Kong, who is also a HA member, said the proposed rent increase will make some tenants of public rental flats feel pressure.

The lawmaker said he plans to follow up on the matter during a meeting of the Legco’s Panel on Housing next week.

Democratic Party lawmaker and HA member Andrew Wan Siu-kin said the proposed hike was not surprising, but said authorities should consider freezing the rents for select tenants who are in financial hardship.

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