Rent rise may be cut by half

PUBLISHED : Wednesday, 23 May, 2012, 12:00am
UPDATED : Wednesday, 23 May, 2012, 12:00am


As protesters demonstrated against a proposed 10 per cent rise in rent for public housing, a Housing Authority member unveiled a move that could cut the rise down to 5.4 per cent over two years.

After a closed-door meeting of the authority's subsidised housing committee, chairman Anthony Cheung Bing-leung said the authority was considering a one-month rent waiver to ease the effect of the rent increase.

The waiver would cut the actual rent increase over the next two years, from September, down to 5.4 per cent, authority member Michael Choi Ngai-min said.

About 100 people protested against the rent rise, the maximum allowed by law and the highest rise since 1997, at the authority's Ho Man Tin headquarters yesterday before the meeting began. The demonstrators, from different political parties and concern groups, called the authority a 'bloodsucker', and some burned banners.

Wong Kwun, chairman of the Federation of Public Housing Estates, said the decision to raise the rent should be left to the next administration, which should consider relief measures to offset the increase.

Cheung said the authority was bound by the Housing Ordinance to accept the 10 per cent rise, an amount based on a biennial review of household incomes by the Commissioner for Census and Statistics.

'Under the law we cannot suspend the rent rise or launch it in phases,' he said. 'But the law allows the authority to provide relief measures,' Cheung said, citing the high inflation rate. 'The most feasible way is to refer to the measures in the rent review two years ago, and give a month's waiver.'

He was referring to the 4.62 per cent rent rise of 2010, which was almost completely offset by a month's rent waiver.

In yesterday's meeting, some members suggested splitting the 10 per cent rise over two years, or simply cutting it to 5 per cent.

The committee will meet again tomorrow after receiving a follow-up paper by the Housing Department, detailing the financial implications of a waiver for the authority.

The proposed rent increase, which would come to between HK$25 and HK$352 a month, is the result of a biennial review mechanism that considers only changes in tenants' incomes.

The 10 per cent rent rise was largely triggered by the introduction of the minimum wage last year, which raised many incomes.

The review survey found a 16.24 per cent growth in the average monthly household income of sampled households. The law states that a rent rise should follow income growth but cannot exceed 10 per cent. Around one in five of public rental households living on welfare would not be affected by the rise because their rents are paid by the government.

Cheung, responding to suggestions that the review mechanism should be revised to take inflation into account, said further review was possible. However, he said the system was thoroughly discussed in 2007 before its launch.


Number of public rental households living on welfare unaffected by any rise because their rents are paid by government