Lawmakers call for study into return of rent controls to protect tenants

PUBLISHED : Tuesday, 08 July, 2014, 3:42am
UPDATED : Tuesday, 08 July, 2014, 6:54pm

Lawmakers have called on the government to consider reintroducing rent controls despite government findings that doing so could rebound on tenants.

Seven of nine members at a meeting of the Legislative Council housing panel yesterday backed a motion calling for a study.

Supporters of the motion said controls would prevent poor tenants being forced from their homes by the city's soaring rents.

"Tenants have little bargaining power," Kwok Wai-keung, from the Federation of Trade Unions, said.

"Owners eyeing better-off tenants often ask for much higher rents. Tenants who can't afford the increased rents are literally being forced out."

The motion calls on the government to hold a public consultation on rent controls and to set a timetable for a review.

It came as the government released a report on rent controls overseas. Average residential rents in the city have jumped by about 67 per cent since 2008/09.

Secretary for Transport and Housing Anthony Cheung Bing-leung said the government had yet to make a decision on the matter.

The report warned that controls could have "unintended consequences". These included less rental housing on the market, higher rents for properties without the controls, less incentive for maintenance and a lower turnover of rental properties.

"Owners might also ask for a much higher rental at an initial stage to make up for the limited rental increase in future," principal assistant secretary for housing Vicki Kwok Wong Wing-ki said.

The report cited research by the Organisation for Economic Cooperation and Development from 2011 that found landlords might charge higher initial rents, and a Massachusetts study which found that during tenancy controls in the 1970s, 10 per cent of the controlled properties had been converted into private condominiums.

Rent controls in Hong Kong - which ended in 1998 - covered mainly older properties and those with a rateable value of less than HK$30,000.