Two new options to settle rent dispute
Public housing tenants may be charged according to the consumer price index
The Housing Department is considering two new options in the way public housing rents are adjusted after being defeated in a judicial review earlier this year, it emerged yesterday.
One option is to use the consumer price index as the basis for adjusting rents because this is the best reflection of how people living in public housing spend their money and the easiest way to understand the economic situation, a Housing Department source said.
The other method is to refine the current system, which bases rents on the median income of tenants because this shows what people can afford.
The proposals will be discussed by members of the ad hoc committee on domestic rent policy under the Housing Authority during a meeting tomorrow.
The source admitted that adopting either proposal would force amendments to the current Housing Ordinance, which governs how the department charges rent in public housing.
But he said the government did not want to include specific details in the amendment because the department wanted to maintain its flexibility in setting rents.
He believed the legislation procedure would not begin until the new session of the Legislative Council next year.
In July, the Court of First Instance found the authority in breach of its statutory duty to review rents regularly. The ruling could result in rents being cut to less than 10 per cent of tenants' median income, as the Housing Ordinance stipulates, and would affect 2.12 million people.
The judicial review was brought by two tenants who were unhappy with the authority's refusal to lower rents despite deflation.
A member of the ad hoc rent review committee, Wong Kwun, said that from the official documents he had received, the government had no preference on which direction it should adopt.
'I think, in the end, it will be an integration of both directions,' he said.
Although an amendment to the law would be inevitable, Mr Wong said he was not happy with the department's desire to keep specifics of either option out of the amended legislation. 'If they are excluded from the legislation, who is going to make sure the government will follow what it has written down and adjust rents according to the new mechanism?'
'Now, people can sue the government because everything is written down in the law. In the future, people won't be able to take the government to court again because it is not included in the law.'
One possibility being considered is to exclude public housing rents from the consumer price index when the government adjusts rents.
Rents constitute a major part of the index and there is a fear of a vicious circle of rent adjustments being created if rents are not left out of the calculation.
