Hong Kong housing

New scheme will allow 13,000 subsidised flat owners in Hong Kong to rent spare rooms to needy families

Programme is intended as interim measure to help people waiting for low-rent public housing

PUBLISHED : Thursday, 20 September, 2018, 10:31am
UPDATED : Thursday, 20 September, 2018, 12:10pm

As many as 13,000 owners of Housing Society subsidised flats will be allowed to rent their spare rooms to needy families under a new scheme launched on Wednesday.

Wong Kit-loong, the society’s chief executive officer, said: “We hope there will be many landlords taking part in the scheme, but it is too early to comment on the response.”

He added that the society would conduct a review after six months.

Formally named the “Letting Scheme for Subsidised Sale Developments with Premium Unpaid”, the programme covers 21 residential estates, including 11 built under the flat-for-sale scheme and 10 under the Sandwich class housing scheme. The society estimated that about 13,000 flats would be eligible.

Two steps to shorter queues for public housing

The scheme allows those who have owned their subsidised flats for 10 years or more and whose flats have two or more bedrooms to rent out their spare rooms – without having to first settle the land premium – to eligible low-income families that have been in the queue for public rental housing for at least three years.

Flats built by the society are usually bought at a 30 per cent discount on market price.

To prevent speculation, they cannot be resold or leased out on the private market unless the owner pays a land premium. The payable land premium is linked with market inflation and has been set at about 30 per cent of a property’s market price in recent years.

Many owners have complained that the premium is too high, as property prices have skyrocketed.

The new scheme is among the special measures announced by Chief Executive Carrie Lam Cheng Yuet-ngor in her policy address last year to provide temporary homes for the needy while they are waiting for government low-rental housing.

As of end-June 2018, there were about 270,000 applicants on the public housing waiting list, and the average waiting time was 5.3 years, according to the Housing Authority.

Waiting time for public housing longest in 18 years

The tenancy period under the new plan will be two years, or until the tenant is allocated public housing.

Tenants must be allowed to share the flat’s kitchen and bathroom.

Democratic Party lawmaker Andrew Wan Siu-kin called for a cap on the rent an owner could charge, saying: “The landlords had bought the homes at a discount off the market price. It is not asking too much if they are required to charge rents lower than the market rates.”

“The rent level is to be negotiated between the owner and the tenant,” the Housing Society’s Wong said. “The tenants are on the public housing waiting list, they are subject to income limits, I don’t think the landlord can charge a very high rent.”

Legislator Wilson Or Chong-shing, of the pro-establishment Democratic Alliance for the Betterment and Progress of Hong Kong, called for the requirements to be relaxed to allow owners to rent out the whole property instead of only one room.

Owners can now express their interest in taking part in the scheme, while would-be tenants can start applying from late October, according to the society.