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Following is a question by the Hon Li Kwok-ying and a written reply by the Secretary for Transport and Housing, Ms Eva Cheng, in the Legislative Council today (July 11):
Question:
With the passage of the Housing (Amendment) Bill 2007 by this Council last month, the Hong Kong Housing Authority ("HA") will establish a mechanism which provides for both upward and downward rent adjustments for public rental housing ("PRH"). HA will also reduce the normal PRH rent by 11.6% across the board from next month. The rent after the above reduction will be the starting point for the rent under this new mechanism. In this connection, will the Government inform this Council whether it knows if the Hong Kong Housing Society will follow HA's move and reduce the rent for the rental units in its housing estates; if the rent will not be reduced, the reasons for that?
Reply:
Madam President,
The Hong Kong Housing Authority (HA) and the Hong Kong Housing Society (HKHS) are two different organisations. The HA was established under the Housing Ordinance (Cap. 283) which regulates its functions. The HKHS was incorporated by the Hong Kong Housing Society Incorporation Ordinance (Cap. 1059), and provides the Hong Kong community with housing and related services. The provisions in the Housing Ordinance regulating rental adjustments do not apply to the HKHS. The HKHS has all along had its independent rental policy.
As we understand it, the HKHS determines the rental levels of its rental estates based primarily on the development and operating costs of the estates, so as to follow the principle of prudent financial management and ensure sound finances. When the rental estates were developed, the HKHS paid land premium to the Government at one-third of the market value.
Regarding the Hon Lee's question, the HKHS indicated that since most of its rental estates were built in the 70s and 80s, and the buildings are relatively old, the HKHS has to constantly put in resources to improve the facilities and living environment of the estates, such as installing additional lifts, improving power supply facilities and security systems. The rehabilitation and improvement works have started in phases. The HKHS expects a deficit in its rental estate accounts in the coming one or two years.
In order to relieve the tenants' financial burden, the HKHS has frozen the rents for ten consecutive years since 1998. The HKHS has also waived the rents for a month in February this year as a goodwill to the tenants. In accordance with its established policy to conduct annual rent review, the HKHS will review the rental levels of its rental estates early next year. The HKHS will not follow the HA in reducing rents for the time being.
Ends/Wednesday, July 11, 2007
Issued at HKT 12:25
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