Bill to cap rents for shops at Hong Kong public housing estates clears first hurdle but battle remains to get support from lawmakers for it
- Regina Ip’s bill, which aims to limit rent increases at malls managed by the Link Reit, was given the go-ahead by the Justice Department’s law-drafting division
- To date, Ip can count on only seven votes for the bill, which some parties say would harm the city’s status as the world’s freest economy
An adviser to Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor has cleared the first hurdle in moving a private member’s bill to the legislature to cap rent rises for shops at public housing estates but she still has a long way to go before introducing it.
Regina Ip Lau Suk-yee said on Monday the law-drafting division of the Department of Justice raised no objection to her bill and the Transport and Housing Bureau was studying whether it was related to government policies or operation.
The New People’s Party leader and lawmaker last month floated the idea of legislating to limit rent increases for stores in malls managed by the Link Reit, Asia’s largest real estate investment trust.
Ip, who is a member of the Executive Council, the city’s top decision-making body, planned to move a private member’s bill in the legislature.
She proposed capping rents with a formula that took into account property values, median household income and inflation.
She also called for a vacancy tax on stores left empty for more than six months.
Ip said on Monday that Deputy Law Draftsman Gilbert Mo Sik-keung had sent her some minor textual amendments to both English and Chinese versions of her bill and she agreed to the changes last week.
Mo will now prepare a formal copy for submission to Law Draftsman Theresa Johnson for endorsement.
A spokesman for the Department of Justice said the Law Drafting Division of the Department of Justice was vetting the format of the private member’s bill received from Mrs Ip.
“Once the Law Draftsman is satisfied that the bill conforms to the Rules of Procedure of LegCo and the general form of Hong Kong legislation, a certificate will be issued,” the spokesman said.
But the Law Draftsman’s consent would only mean that the format of a private member’s bill conforms to the formal requirements for bills, such as the text being given a long title setting out the bill’s purposes.
Carrie Lam needs to act on Link Reit ‘mountain’
Ip would still need to canvass enough votes to back her bill if it is eventually tabled at the legislature. She said it was too early to assess the chances of the bill passing.
Under the Basic Law, Hong Kong’s mini-constitution, the written consent of the chief executive is required to introduce a bill to the Legco which “relates to public expenditure or political structure or the operation of the government”.
A private member’s bill – one introduced by a legislator not acting on behalf of the executive authorities – must be passed by both Legco’s geographical and functional constituencies. The latter represents trades and professional sectors.
A spokesman for the Transport and Housing Bureau said it had received Ip’s draft bill via the clerk of Legco’s housing panel and was currently studying it.
Regina Ip’s proposal to cap shop rents at Hong Kong public housing estates is labelled communist
“We will provide Legco with the government’s response in due course,” the spokesman said.
Ip’s proposal will be discussed at the panel’s meeting next Monday.
The Link took over the running of government-owned malls and markets in 2005, and has long been accused of driving out small shopkeepers. According to a study by the New People’s Party, rents for shop space at Link malls increased 132 per cent – from HK$25.40 to HK$58.90 per sq ft – between 2005 and 2017. The rise in the market as a whole was much smaller, at 72.8 per cent.
Only the Federation of Trade Unions, which has five lawmakers, has thrown its weight behind Ip’s idea since it was raised last month. This is in addition to her own New People’s Party’s two lawmakers.
The pro-business Liberal Party and the Business and Professionals Alliance have reservations about the idea, saying it would undermine Hong Kong’s status as the world’s freest economy.
Democratic Party chairman Wu Chi-wai said his party supported the idea of tightening the regulation of Link Reit but it was too early to say if they would back Ip’s proposal.
Link Reit sells a dozen suburban Hong Kong malls to consortium led by Gaw Capital for US$1.53 billion
“The crux of the issue is how the bill might be written to single out Link Reit, which is a listed company, for such regulation,” he said.
“Would it bring about uncertainty in the operation of the market?” he asked. “We need to look at the draft of the bill before taking a stance.”
Ip said her bill would list the malls and markets taken over by Link in 2005.
Wilson Or Chong-shing, a lawmaker for the Democratic Alliance for the Betterment and Progress of Hong Kong, said his party had not yet discussed Ip’s proposal.
