Hong Kong housing

Key housing committee warns over rent controls, building on country parks

Long-term Housing Strategy Steering Committee also expresses reservations about regulating subdivided flats and offering subsidies to those waiting for public housing

PUBLISHED : Monday, 17 February, 2014, 5:40pm
UPDATED : Wednesday, 26 October, 2016, 2:38pm

The government-appointed committee tasked with long-term planning for housing development in Hong Kong has expressed reservations about introducing rent controls and regulations for “subdivided flats” – and advised against using country park land for building homes.

In its report released on Monday, the Long-term Housing Strategy Steering Committee also warns against offering rental subsidies to those on the waiting list for public housing, saying it would only benefit landlords.

Secretary for Transport and Housing Professor Anthony Cheung Bing-leung, also the committee chairman, said on Monday that rent controls could give rise to more problems than solutions.

Controlling rents could discourage landlords from letting their flats and thus decrease the supply of flats
Professor Anthony Cheung

“Controlling rents could discourage landlords from letting their flats and thus decrease the supply of flats,” said Professor Cheung, who drew criticism last week by suggesting the government could carry out a study on rent controls.

The committee’s report says the issue should be put on hold for now, pending further “public discussion”.

“As legislation is required to introduce rental control, considerable time would be needed before it could be implemented…Given the controversies of rental control, the [committee] cautions that clear community consensus has to be secured before any form of rental control is contemplated,” the report reads.

Professor Cheung also said the government had no immediate plan to offer an amnesty on illegally converted and subdivided units. On calls to regulate such housing, which is often dangerous and offers inadequate living conditions, the report asks the government to take into account “the pros and cons of the proposal”.

There is no legal definition of a subdivided flat, but the term is commonly used to describe cases where one flat is partitioned into two or more self-contained cubicles. Many low-income families live in the flats because they cannot afford anything else, but often the conversions have been carried out illegally.

Professor Cheung said it was “undesirable” to offer rent subsidies to those on the waiting list for public housing, saying it would most likely drive rents up “thereby partially offsetting the benefits to the tenants”.

The committee also warned that a subsidy would encourage more people to join the queue for public housing.

As of the end of last year, there were more than 243,000 applicants on the public housing waiting list. Of those, slightly more than half were single or under the age of 60, or both.

At the end of March last year there were some 228,000 applicants on the waiting list, while 49 per cent were so-called non-elderly one-person applicants.

Professor Cheung noted the average waiting time for public housing was almost 35 months, and just over 19 months for elderly applicants.

The government has pledged to offer a public flat to an applicant within three years on average.

The committee has advised the Housing Authority to conduct regular reviews of the income and assets of applicants, and to remove those who become ineligible.

The committee also advised against using country park land for housing development, in the wake of public concern. It called on the government to focus instead on the “review of sites in green-belt areas and to make better use of brown-field sites and degraded agricultural land”.

Professor Cheung said the government would follow up on the committee’s recommendations and would produce its own report later this year on long-term housing development.