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Outcome of rent review under rent adjustment mechanism for public rental housing

The following is issued on behalf of the Housing Authority:

     The Subsidised Housing Committee (SHC) of the Housing Authority (HA) discussed today (May 22) a report compiled by the Commissioner for Census and Statistics (C for C&S) that compared the income of a total of about 48,000 public rental housing (PRH) households in 2009 and 2011. It was shown that there was a change of household income of +16.24 per cent between the two periods.

     "In accordance with findings of the report and stipulation in the Housing Ordinance, the level of adjustment of PRH rent is +10 per cent," a spokesman for the HA said.

     The Housing Ordinance stipulates the rent adjustment mechanism for PRH, which came into effect in 2008. Under this rent adjustment mechanism, tenants' affordability is the factor used to determine PRH rent. The mechanism provides an objective basis for the HA to determine when and to what extent PRH rent should be adjusted upwards or downwards, using a framework that reflects the change in PRH tenants' household income. The first rent review exercise was completed in 2010.

     Under the mechanism, a review of the PRH rent will be conducted every two years. Section 16A(7)(b) of the Housing Ordinance specifies that the C for C&S shall compute the index, including the change in the income index between the first and second periods. In the second rent review, the first period refers to a period of 12 months expiring on December 31, 2009, and the second period as a period of 12 months expiring on December 31, 2011. About 24,000 PRH households were sampled in each of the two periods.

     While the review showed that the income index has a change of +16.24 per cent between the two periods, Section 16A(4)(a) of the Housing Ordinance stipulates that the HA shall increase the PRH rent by the rate of increase of the income index or 10 per cent, whichever is less. Having considered the Commissioner's report and in accordance with requirement in the Ordinance, the SHC endorsed an adjustment of +10 per cent in PRH rent.

     In light of the uncertain economic outlook, SHC Members indicated that they would like to consider whether a special relief measure would be necessary, so that the HA would share the financial burden with its tenants. The SHC has asked the Housing Department to submit a follow-up paper for Members' consideration. The SHC will meet again on May 24.

Ends/Tuesday, May 22, 2012
Issued at HKT 17:30


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