Major Hong Kong housing provider to double monthly rents to free up space for needy
New policy from September meant to evict wealthier tenants, but results will only be visible after a decade
Hong Kong’s second-largest housing provider plans to double monthly rents to more than HK$14,000 with a new policy aimed at evicting wealthier tenants and freeing up space for the needy, but the results of such a move will only be seen a decade later.
On Wednesday, the Housing Society, a self-financing NGO, announced the new plan – to be launched in September – to release more public housing for low-income families.
“The Housing Society has been looking into the feasibility of introducing [the policy] for years,” society CEO Wong Kit-loong said. “We have also been listening to opinions from different stakeholders.
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“In view of the mounting demand for public housing, it is necessary to ensure effective allocation of subsidised housing resources to help those in dire need.”
Under the plan, which is similar to the government’s existing policy for public rental housing, new tenants moving into the NGO’s 20 estates would be required to declare their income and assets after living in a flat for 10 years. They would also have to make declarations every other year from then onwards.
Residents earning more than twice or three times the household income limits would be required to pay higher rents – from 1.5 times to double the existing amount.
Under the plan, wealthier residents living in a 538 sq ft flat in Prosperous Garden, a public housing estate in Yau Ma Tei, would be doubled to more than HK$14,000.
Families would also be required to vacate if their household income is five times over the limit, or if their net assets exceed this by a factor of 100. Anyone who owns property in Hong Kong would also have to move out.
For example, at Prosperous Garden, a couple earning a monthly income of more than HK$87,505 or possessing assets totalling more than HK$35 million would need to vacate.
The new policy takes effect on September 1, but tenants signing new contracts thereafter would only be required to declare their assets after a decade has passed.
Wong said the policy would apply to new tenants or those transferring tenancy to family members who are not spouses. He explained it would be “too administratively challenging” to apply this to all existing 32,000 rental contracts.
The new policy comes after the Housing Authority tightened their own policy for well-off tenants last October, as average waiting times for a flat stretched to almost five years.
However, not all welcomed the new policy.
Lawmaker Ben Chan Han-pan said the plan would only have a limited impact.
“For the amount of administrative effort and money that has to be put in, the number of flats that can be retrieved is relatively small,” he said.
Statistics show the authority recovers an average of 200 flats a year from wealthier households.
Separately, the Housing Society is set to increase rent by 8 per cent for all 32,000 residents from April 1 until 2020 to cover an operating cost deficit. The increment will range from HK$41 to HK$610. The highest rent charged for the maximum increase would be HK$8,200.
The society will also launch a new scheme to halve rent for eligible low-income families.