XCRI(86)12
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SO as to reflect the values of the estate in terms of its location, amenities, environment, schools, employment, transportation and other facilities available on or in the vicinity of the estate, as compared with other estates. This is to ensure that rents for comparable estates are consistent. Other main considerations are rates, inflation, the prevailing level of household income and, above all, tenants' ability to pay rent.
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The existing rents in the 52 estates involved in this current rent review are only 11% to 32% of current market rents. Most of these estates are provided with reasonably modern facilities and a wide range of commercial and community services comparable to those provided in the newest estates. It is therefore reasonable that their rents should be brought closer to those charged in the latter estates.
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Since the last review, the rate of inflation has gone up by 7.4% (according to Consumer Price Index (A), Census & Statistics Department).
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The Authority collects rents inclusive of rates from its domestic tenants. Arising from
from the General Revaluation 1984, rates have been increased considerably since April 1984. As a result, the Authority pays increased rates on behalf of its tenants. The existing policy is that any increased rates paid by the Authority which are not reflected in the current rents are to be recovered retrospectively from the tenants in the next rent review over a period of 24 months. For the 33,182 flats the rents of which are reviewed for the first
time, rates have been increased between 9% and 73% (1)
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depending on the date of occupation of the premises.
The total additional rates to be paid on behalf of these tenants between occupation of their flat and 31 August 1986 will amount to $7.6 million. The average amount of rates to be recouped is $0.3 per m2, which is an element in the proposed rent increase. For the remaining 104,686 flats the rents of which were reviewed in September 1984, their current rents are already inclusive of the 1986 level of rates, and ΠΟ adjustment is therefore necessary.
(1) the
tenants of 14,125 flats are still paying rents at 1983 level, owing to the fact that they had occupied their accommodation for less than two years on 1 September 1984 when the last rent increases were implemented. Hence, the rates included in their present rents are also at the 1983 level. Under the Rates Relief Scheme introduced in 1984, rates are increased by a maximum of 20% per annum. percentage exceeds 44%, it for three years since 1983.
If the increased reflects increases