Make way for the truly needy

PUBLISHED : Thursday, 18 August, 2005, 12:00am
UPDATED : Thursday, 18 August, 2005, 12:00am

Although Hong Kong is known to the outside world as a bastion of capitalism, where market forces reign supreme, it also boasts a sizeable public-housing programme.

At its peak, public housing estates accommodated about half the population. Today, excluding those who live in flats sold at subsidised rates and former tenants who have purchased their rental units, about 2 million people live in about 640,000 rental flats owned and managed by the Housing Authority.

Still, many of these sitting tenants are believed to have become well-off, in the sense that they can afford to live in private housing, either by paying market rent or by buying their own flat, but have not taken the option. Their exact number is hard to determine, however, as it depends on how 'well off' is defined. At present, public housing applicants are subject to a means test. But once they are assigned a rental unit, they are not subject to any more screening for 10 years.

From then on, they have to declare income, but not assets, every two years. Those with a household income exceeding the corresponding income limit for new applicants, and those who choose not to declare income, must pay 1.5 times the subsidised rent and rates, while those earning more than three times the limit pay double rent and rates.

Those paying double rent are also required to declare their assets - but only those whose assets are valued at more than 84 times that of new applicants are required to vacate their units.

For a four-person household, the relevant monthly income and asset limits that could see them evicted are $42,900 and $1,210,000 respectively.

For those who feel only low-income households should be eligible for public housing, the limits are certainly too lax, as many households earning and owning a lot less are paying more for their private accommodation.

Yet, in order to maintain social stability, the current rules on means-testing of sitting tenants were not introduced until 1995, 42 years after the public-housing programme was launched in 1953.

The rules are lax because they were the product of a compromise, with activists strongly opposed to curtailing the provision of subsidised housing.

What if we lowered the income and asset limits for eviction so that more well-off tenants would be forced to vacate their units for the truly needy? That is apparently on the cards, although officials are in no hurry to do it.

Their hands are already full trying to win public support for a proposal, unveiled last month, to introduce a points system that aims to limit young, single people's access to public housing.

Any moves to compel more sitting tenants to move out will certainly meet with opposition from the public housing lobby, but it must happen. Previously, many well-off tenants gave up their units after buying flats built at subsidised rates, under the Home Ownership Scheme. Now that the scheme is being phased out, fewer tenants are leaving public housing this way.

In 2004-2005, the Housing Authority recovered 7,748 public rental units - 3,893 through voluntary surrender, 1,535 through notices-to-quit for breaching various rules, and 641 from those who bought HOS flats. Among them, only 582 were recovered from well-off households paying higher than the subsidised rent.

Unless the community is prepared to build more new units to meet demand, the income and asset limits need to be tightened so tenants who have improved their lot through subsidised housing, and are able to stand on their feet, are compelled to make way for the truly needy.

C. K. Lau is the Post's executive editor, policy