Tenancy control regulations that have been put aside for 16 years in Hong Kong will be reconsidered, city leader Carrie Lam Cheng Yuet-ngor said as she announced a raft of relief measures on Tuesday . Rather than regulating all flats, the government’s focus this time will be on subdivided units – the so-called shoebox flats often regarded as the last housing resort for the needy. Lilian Cheng talked to current and former government officials to find out more about the government’s rationale, and the feasibility and impact of such regulations. What is being considered? The Transport and Housing Bureau will form a study group and look into limiting rents in subdivided flats, as well as restrictions to improve the quality of the dwellings, such as installing independent meters for utilities, according to executive councillor Dr Lam Ching-choi. It will be the first time such a study has targeted subdivided units. But a government source said the announcement appeared to be quite sudden, although discussions have been going on for years. The Housing Bureau still needs time to set up a working group, and there is no timetable yet for rent control to be implemented. Why did the last administration give up on the idea of tenancy controls? Tenancy controls have been implemented a few times in Hong Kong – from 1921 to 1926, and from 1973 to 2004 – as a short-term measure to counter unusually high rent increases during housing shortages. But research carried out in 2014 by the administration of Leung Chun-ying concluded that imposing tenancy controls again would trigger a lot of controversies. Relief measures will pose a burden on Hong Kong coffers, welfare chief says Economically, any rent control measures would only lead to landlords asking for higher starting rents and becoming more selective over tenants, it found. And politically, there is a 50-50 split between tenants and owners in Hong Kong, making it very hard to reach a consensus on the legislation. “Landlords will definitely increase rent once the government announces it, way before Legco could pass any bills,” former housing minister Anthony Cheung Bing-leung said. Why is the government re-examining the proposal now? A survey carried out last year found rent for a subdivided unit can be three to four times that of a public flat. For example, a 120 sq ft flat can be rented out at HK$5,000 (US$650) per month. Dr Lam said the government was previously reluctant to take the proposal forward as it focused more on balancing shareholders’ views, such as owners’ opposition, and whether a control would be seen as legalising subdivided flats, which often have unauthorised partitions without proper fire and safety facilities. “But in reality, these homes still exist if we do nothing, and the government should consider more the people living there, who suffer from high rent prices and overcharging,” Lam said. “It’s a shift of governance mindset – we have to think for the people, and I believe the government will take action this time.” But the pro-democracy camp believes the announcement is just an attempt by Carrie Lam to resolve the political deadlock triggered by the now-withdrawn extradition bill, without thorough consideration. Why is the government targeting subdivided flats? More than 86,000 households live in subdivided flats, many of them doing so while they wait for public housing. Carrie Lam announced on Tuesday that the government would give housing subsidies to people who have waited for a public flat for more than three years. But she said that, without proper rental regulations, any subsidies for poor families would eventually line the pockets of landlords, and thus not help the needy. Yet Cheung said “the devils are in the details”, suggesting it would be difficult to define “subdivided” in law, and that the government might face legal challenges as a result. What can Hong Kong learn from overseas experiences? Countries such as Spain and the Netherlands, as well as four states in the US – California, New York, New Jersey and Maryland – have introduced rent controls. The newest such controls came in Berlin, Germany, passed into law last October. Under the law, landlords cannot charge rent higher than what the previous tenant paid, and tenants can sue landlords if their rent exceeds ceilings set by the government. In the Netherlands, the law strictly prohibits landlords from overcharging tenants for water and power. Electricity and water bills must be separated from rent, and landlords are not allowed to charge tenants more than 20 per cent above the original price for furniture and home appliances.