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Thursday, July 3, 2014, 08:51

Public housing rents may be raised by 10 percent

By Oswald Chan in Hong Kong

 Public housing rents may be raised by 10 percent
In this picture taken on October 22, 2013 in Hong Kong, a pedestrian (bottom L) walks past buildings in the Sham Shui Po district, where a public resettlement block built in 1954 was renovated and turned into a youth hostel. (Photo / AFP)

The Housing Department (HD) submitted its third public housing rent review report to the Housing Authority (HA) on Wednesday. Government sources reported that the HD hopes to increase rents for public housing by 10 percent effective from Sept 1. 

The report was submitted to the HA Subsidized Housing Committee. The committee will meet on Friday to decide whether or not to accept the review.

The Housing Ordinance stipulates that the HA is obligated to review public housing rent levels every two years. Reviews are based on changes in the income index between the first period (2011) and the second (2013).

According to the public housing rent adjustment mechanism, set by the Housing Ordinance 16A, if the income index in the second period rises 0.1 percent or higher compared with the first period, the HA has to raise public housing rents based on the level of increases in the income index or a figure capped at 10 percent, whichever is lower.

The HD makes its recommendations based on data provided by the Census and Statistics Department.

Based on this data, the 2013 income index rose by 19.27 percent compared with 2011. At that time the HD proposed a public housing rent increase of 10 percent, starting from September.

In monetary terms, the average household income of public housing tenants increased from HK$15,473 in 2011 to HK$18,455 in 2013. Following the rent increase, public housing tenants will have to pay an average of HK$154 more rent.

This is the third time the HD has conducted a review of public housing rent levels. Similar reviews were undertaken in 2009 and 2011. In 2011 the HA raised public housing rents by 10 percent as the income index level for 2011 had risen by 16.24 percent.

The government proposed waiving public housing tenants rent payments as part of its financial relief package in the last budget. If the proposal is passed by the Legislative Council (LegCo), this will virtually offset the effect of their first rental rises in 2011.

A government source said: “The income level is the best way to gauge the rent-paying affordability of public housing tenants. The public housing rental adjustment mechanism provides the objective foundation for HD to decide on when to review rental payment levels and the magnitude of rent adjustment levels. This can foster the long-term development of the public rental housing program in the city.”


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