Hong Kong rent could be waived for two months to ease impact of 10 per cent rise for public housing tenants

More than 750,000 families in Hong Kong public housing should get two months of free accommodation to soften the impact of a 10 per cent rent rise, the housing minister has said.

The combination of the proposed waiver and the higher rent would see tenants paying 0.4 per cent more over the coming two years, amounting to an increase of between HK$2 and HK$21 a month. Average rent for the city’s public housing tenants is HK$2,072 (US$267) per month.

“Having considered the local and global economic downturns, and the uncertainty ahead due to the coronavirus pandemic, we understand that the public would like us to consider rent exemption and rent freezing measures to relieve the public’s pressure,” Frank Chan Fan said at a Legislative Council meeting on Wednesday.

Falling Hong Kong rents mean landlords may not recover mortgage payments

“We decided to propose to the Housing Authority a two-month rent waiver period, so as to offset the economic burden arising from the rent increment,” he added.

The rent holiday would take the Housing Authority’s operating deficit to HK$2.5 billion. The government department, which manages all public housing estates in Hong Kong and is chaired by the housing minister, has conducted a rent review every two years since 2008.

According to the results of the review revealing the 10 per cent rise on Monday, and before taking the possible rent waiver into account, tenants would have to pay between HK$42 and HK$498 more, with the average increment about HK$200.

While the decision on the two-month rent waiver would lie with the Housing Authority’s subsidised housing committee, due to meet next month, Chan said he would encourage it to approve his proposal.

Chan also pointed out that increases in average income for public tenants had far exceeded rent rises.

Between 2007 and 2019, incomes climbed 106.2 per cent while rent was up 68.1 per cent over the same period, with some tenants not facing any increase at all.

The authority has previously waived rent for one-month periods in 2010 and 2012 because of tough economic conditions.

Chan added that given the current economic downturn and the impact of the pandemic, Financial Secretary Paul Chan Mo-po had already offered tenants two rent-free months this year.

Both pro-establishment and opposition lawmakers blamed the government for not doing enough to relieve the financial burden on Hongkongers.

“The unemployment rate is so high that over 220,000 people are jobless, and such an increment [in rent] gives a sense to the public that the administration is not caring at all,” said Michael Luk Chung-hung, of the Hong Kong Federation of Trade Unions, who called on the authority to consider freezing rents.

Andrew Wan Siu-kin, of the Democratic Party, said there were flaws in the current system of rent reviews, adding he would ask the authority to look at making changes.