Nearly 600,000 public housing residents are expected to get one-month free rent next year and an 11.6 per cent rent cut for two years in a HK$3.8 billion plan to relieve tenants' burden.
But under the scheme, rents are likely to rise after two years.
A Housing Authority source said the relief package would cost HK$1 billion for the rent waiver and the 11.6 per cent rent cut would cost HK$2.8 billion. The authority added the waiver was in response to community demands.
'There have been strong voices that we should give the tenants a rent waiver. We have to respond to these calls,' a Housing Authority source said. 'The debate on rent adjustments has dragged on for many years and tenants have been waiting for some relief. We understand their feelings and you can see this as a goodwill gesture.'
Under the plan, there will be an 11.6 per cent cut in rent once the new system is in place. The new rent will be the basis for future rent adjustments.
Future rents will be set by an 'income index' that traces the income changes of public housing tenants. The source conceded that after the initial two years, the new mechanism would probably lead to rent increases for most tenants. 'This is why we are seriously considering a rent waiver. We do understand the situation,' he said.
The proposals will be tabled to the authority for a final decision next month.
