LCQ4: Assistance for low-income private housing tenants

     Following is a question by the Hon Kam Nai-wai and a reply by the Secretary for Transport and Housing, Ms Eva Cheng, in the Legislative Council today (November 2):


     According to the information released by the Rating and Valuation Department in October this year, the rents of private domestic units with usable flat size below 40 square metres had continued to rise: the rents in August this year had increased by 15% over the same period last year, and by nearly 40% compared to two years ago; on Hong Kong Island, the average rent for this type of units was around $33 per square foot in August this year, and the monthly rent of a flat of a size of 170 square feet reached $6,200. Furthermore, a survey conducted by a community group reveals that the highest rent among separate units of sub-division of flat units (commonly known as "sub-divided units") exceeds $50 per square foot.  In this connection, will the Government inform this Council:

(a) how the authorities will assist households currently renting private domestic units in alleviating their financial pressure; whether they will consider providing "tax deduction for rents of residence" in respect of the rental expenses for private domestic units, and setting the annual deduction ceiling at $100,000;

(b) whether it will consider providing rent assistance to eligible applicants who are on the Waiting List for public rental housing ("PRH") for a period of time and do not receive Comprehensive Social Security Assistance, until they are allocated PRH flats; and

(c) of the estimated numbers of tenants of caged homes, sub-divided units and cubicle apartments at present; whether it has assessed if the enforcement actions taken by the Buildings Department against sub-divided units will result in an increased demand for private domestic units for lease and further push up the rents in the market for private domestic units; what measures the authorities have in place to alleviate the rent burden on such people (including expediting the arrangement for them to move into PRH flats)?



     There are currently 2.35 million households in Hong Kong. Of those, 730 000 households live in public rental housing (PRH) and 380 000 in self-owned units acquired with government subsidies. In other words, almost half of the households in Hong Kong are benefiting from some forms of housing subsidy by the Government. Of the 1.24 million households living in private properties, 870 000 are owner-occupants. Taken together, nearly 85% of households live in PRH units, subsidized home ownership scheme flats or their own private properties.

     As for the tenants living in private accommodation, the level of rent of private accommodation is subject to a host of factors, including the macro-economic environment, market sentiment, district development, market demand, age and quality of the building etc.  As the current property market situation is unusual, the Government has been responding to the situation through the introduction of long, medium and short-term measures to ensure the healthy and stable development of the property market, including increasing land supply to tackle the problem at source, combating speculative activities, enhancing the transparency of property transactions, and preventing excessive expansion in mortgage lending. The Government has set the target of making land available for an average of some 20 000 private residential flats per annum in the next 10 years. We believe that this basket of measures will help stabilise the property market.

     After consolidating information provided by the Labour and Welfare Bureau, Financial Services and the Treasury Bureau (FSTB) and the Development Bureau, my reply to the three parts of the question is as follow:

(a) and (b) Rent allowance is payable to Comprehensive Social Security Assistance (CSSA) households for meeting their accommodation expenses. The maximum rates of the rent allowance (MRA) for particular CSSA households is determined with reference to the number of members in the household who are eligible for CSSA. The MRA are adjusted annually in accordance with the movement of the Consumer Price Index (A) rent index for private housing.  

     The existing mechanism is to provide a safety net for those who cannot support themselves financially through the CSSA, such that their income will be brought up to a prescribed level to meet their basic needs.

     As for other households who have pressing need for housing but not taking the CSSA, they can consider applying Compassionate Rehousing (CR) through the Social Welfare Department (SWD), or Express Flat Allocation Scheme for earlier allocation of PRH flats if they are eligible for applying PRH.

     On the suggestion of providing "tax deduction for rents of residence", FSTB has indicated that the Government has taken note of the fact that the community has different views on this suggestion. In formulating the 2012-13 Budget, the Financial Secretary will, having regard to the Government's fiscal position, the economic situation and needs of various sectors of the community, comprehensively and carefully consider the views and recommendations collected from different channels in relation to the burden arising from different taxes. The utmost effort will be made to strike a balance between relieving the tax burden of taxpayers and maintaining healthy public finances.

     The Government has all along been providing PRH to low-income families who cannot afford private rental accommodation through the Housing Authority (HA). People with housing needs can apply for PRH through the Waiting List. HA's target is to maintain the Average Waiting Time (AWT) at around 3 years for general applicants (excluding non-elderly one-person applicants under the Quota and Points System).

     According to the latest Public Housing Construction Programme, in the coming five-year period from 2011/12 to 2015/16, the HA will build about 75 000 flats in total, i.e. an average of about 15 000 PRH flats per year. It is estimated that this level of new production, together with the recovered flats from existing stock, would continue to meet the policy objective of maintaining the AWT for general applicants at around 3 years.

     However, the production of 15 000 new PRH units per year is not a fixed target. Our objective is to maintain the AWT for general applicants at around 3 years. To this end, the HA will roll forward and review the 5-year Public Housing Construction Programme every year. When necessary, the HA will endeavour to adjust and increase the production volume in order to keep the AWT for general applicants at around 3 years.

(c) According to the information provided by the Home Affairs Department, there are 360 bedspaces in 13 private licensed bedspace apartments as at September 30, 2011. The Government does not have detailed figures on the number of occupants living in bedspace apartment, sub-divided units or cubicles. As for the enforcement action against sub-divided units by the Buildings Department, the objective of such action is to ensure that these sub-divided units will not pose building safety problems. The Government understands that these sub-divided units provide accommodation for some low-income people and therefore would not ban the sub-divided units across the board. The relevant government departments will ensure that no households are rendered homeless as a result of government action through the provision of appropriate assistance to those in need, which includes SWD to consider referring such cases to the Housing Department for CR according to the individual merits of each case.

Ends/Wednesday, November 2, 2011
Issued at HKT 15:13