LCQ1: Median Rent to Income Ratios (MRIR) for households living in public rental flats

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Following is a question by the Hon Lau Kong-wah, and a reply by the Secretary for Housing, Mr Dominic Wong, in the Legislative Council today (May 31):

The Housing Ordinance stipulates that whenever the Hong Kong Housing Authority ("HA") has revised the rents of public rental housing ("PRH") units, the overall median rent to income ratio ("MRIR") after revision shall not exceed 10 per cent. Regarding the determination of PRH rentals, will the Government inform this Council:

(a) of the MRIR for all PRH households in Hong Kong for each quarter of the past twelve months and how these figures compare to those of the preceding four years;

(b) when the family income of PRH households has generally decreased, whether HA is required to lower the rent as the case may be so as to ensure that the MRIR of PRH households does not exceed 10 per cent; if not, whether the Administration will consider making amendments to the Housing Ordinance to that effect; if this will not be considered, of the reasons for that; and

(c) whether it knows if HA, in determining PRH rentals, will consider ensuring that the MRIRs applicable to various types of PRH blocks (not just the overall MRIR) do not exceed 10%; if it will not, of the reasons for that?

Reply:

Madam President,

I have now laid on the table for Members' information the Median Rent to Income Ratios (MRIR) for households living in public rental flats of the Housing Authority in the last four quarters of 1999, compared with those in the preceding four years.



         Median Rent to Income Ratios (MRIR)

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Year     1st          2nd         3rd           4th 

       Quarter     Quarter      Quarter      Quarter 

----   -------     -------      -------      -------

1995     8.4         8.5          8.4          8.7

1996     8.6         8.6          8.7          8.9

1997     9.0         9.1          9.1          8.9

1998     8.8         8.9          9.3          8.6

1999     9.4         9.8          9.6         10.0

The Housing Ordinance provides that the determination of any variation of rent shall be of such amount that the overall MRIR of all public housing estates shall not exceed 10 per cent at the time of determination. The Ordinance does not require rent reduction subsequently even if the overall MRIR exceeds 10 per cent.

The Government and the Housing Authority do not intend to seek amendment of the Housing Ordinance to allow for rent reduction since public housing rents, which at present also cover rates and management fees, are already heavily subsidised.

As regards Part (c) of the Question, the Housing Authority does not intend to apply the MRIR limit to public rental blocks by type for the same reason that rents are already heavily subsidised. The prime considerations for setting rents are tenants' affordability, facilities provided and location of the housing estate.

End/Wednesday, May 31, 2000

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