LCQ3: Ensuring the optimal use of public housing resources
**********************************************************
Question:
Recently, some media have uncovered that a Hong Kong citizen, being a public rental housing ("PRH") tenant, purchased a local luxurious residential property in 2019 for $72.8 million with full payment. The tenant then even purchased a newly built Home Ownership Scheme ("HOS") flat with Green Form status. The incident has caused an uproar in society. Some members of the public have queried how the Housing Department ("HD") could connive at that PRH tenant enjoying PRH resources, and even allow him to purchase a HOS flat with Green Form status, which is a double abuse of public housing benefits. The incident also reflects that there are significant loopholes in the mechanism for managing the allocation of PRH and HOS flats. In this connection, will the Government inform this Council:
(1) of the number of PRH tenants whose asset situation was randomly checked by HD in the past four years, as well as the number and percentage of tenants who were successfully uncovered to have owned properties or excessive assets in Hong Kong or elsewhere; the follow-up work of HD; the number of persons who were prosecuted and convicted after their misdeeds were uncovered;
(2) whether it has gained an understanding of the reasons why such PRH tenants can easily conceal their assets to circumvent asset tests; whether it has assessed if the deterrent effect of the existing mechanisms of random checking and punishment is inadequate, causing some people to take chances and deliberately not declaring their assets; and
(3) whether it will immediately review the loopholes in HD's existing policies and plug them in a timely manner, so as to prevent abuses of precious public housing resources again?
Reply:
President,
The Hong Kong Housing Authority (HA) strives to provide public rental housing (PRH) for low-income families who cannot afford private rental accommodation. PRH is a precious resource of the community which should be used appropriately and allocated rationally to those in genuine need. The HA endorsed the revised "Well-off Tenants Policies"(WTP) in October 2017. Apart from those exempted from WTP, households who have been living in PRH for ten years or more are required to declare biennially their income and asset levels, and whether they own domestic property ownership in Hong Kong, so that the Housing Department (HD) can assess whether they are required to pay extra rent in the future or vacate their PRH flats. Households with less than 10 years' residence in PRH are not required to make declaration. However, if HD receives complaints on households having domestic property ownership in Hong Kong and if such complaints are substantiated, they will be required to vacate their PRH flats irrespective of their length of residence. My consolidated reply to the questions raised by the Hon Paul Tse is as follows:
HD adopts a multi-pronged and targeted approach to conduct rigorous investigations on the declaration cases so as to combat tenancy abuse. In the past four years (i.e. from 2018-19 to 2021-22), HD vetted an average of about 238 000 income and asset declaration forms per year to determine the eligibility of the PRH households for continuous renting of PRH flats and the rent level payable in the coming two years. Moreover, the central investigation team of HD conducts in-depth investigations annually on no fewer than 6 000 cases, which include doubtful cases referred from HD staff who are responsible for vetting declaration forms and cases reported by the public. The central investigation team also randomly selects households of different categories, e.g. households with tenant changed to the next generation and with members deleted, etc. where income and assets declarations are involved. The central investigation team's investigation channels include making inquiries to the Land Registry to check whether the households own any domestic property in Hong Kong, etc.
In the past four years (i.e. from 2018-19 to 2021-22), an average of about 690 households per year were discovered to have owned domestic property in Hong Kong and/or having total household net asset value exceeded the prescribed limit, accounting for about 0.3 per cent of the total declaration cases.
According to the Housing Ordinance, any person who knowingly makes a false statement in respect of any particulars specified in the declaration form shall be guilty of an offence and liable on conviction to a fine of $50,000 and to imprisonment for six months. Anyone who refuses or neglects to furnish any of the particulars specified in the declaration form shall be liable to a fine of $25,000 and to imprisonment for three months. In the past four years (i.e. from 2018-19 to 2021-22), there were 526 cases of tenants who violated the Housing Ordinance by making false statements/neglecting to furnish information in the income/assets declarations and who were prosecuted and successfully convicted. Among them, 10 persons were sentenced to imprisonment (including suspended sentence). In addition, irrespective of whether such persons are prosecuted or convicted of the offence, the HA may terminate the tenancy agreement by virtue of its power conferred by the Housing Ordinance and recover the undercharged rent from them.
In addition to detection and investigation, publicity for reporting suspected cases and education of PRH tenants are equally important. Since the implementation of the revised WTP in 2017, as at end of January 2023, about 3 200 households have surrendered or had their flats recovered, including those whose household income or total net asset levels exceeded the limits, those with domestic properties in Hong Kong, those opted not to declare, those purchased flats under subsidised sale flat (SSF) schemes while paying extra rent, etc.
In the light of the public's concern about abuse of public housing, the HD will timely and flexibly adopt different strategies and deploy manpower, collect evidence through various channels, strengthen communications and collaboration with various government departments and enhance the work process, so as to obtain key information more effectively and quickly to find out if there is any tenancy abuse, further strengthen the deterrent effect and enhance the effectiveness of combating tenancy abuse.
Ensuring the rational use of public housing resources has all along been one of the important policy directions of the Government and the HA. In this regard, the HA has implemented a series of housing policies and measures to combat the abuse of public housing resources.
Currently, while there is no restriction on income, assets, or property ownership for PRH tenants who apply to purchase SSFs with Green Form status, all the family members must undertake to surrender their PRH flats subsequent to purchasing SSFs. This arrangement was put in place as early as in 1978 when the HA first put up Home Ownership Scheme flats for sale. The objective at that time was to encourage PRH tenants who could afford to achieve home ownership to vacate their flats for PRH applicants, who had more urgent housing needs, with a view to expediting the turnover of the PRH flats. In fact, in the past five years, there were on average some 3 600 PRH flats per year recovered from PRH tenants who purchased SSFs.
We are currently reviewing and considering how to tighten the relevant arrangements to ensure the rational use of public housing.
Ends/Wednesday, March 15, 2023
Issued at HKT 15:25
Issued at HKT 15:25
NNNN