- 2 -
Some Members argue that rent control should be extended for two years because of the shortage of public rental housing in Hong Kong. I'm afraid this is not a good argument, because only a small proportion, or roughly 24% of protected tenants in Hong Kong have actually applied for public rental housing. The rest are families who are either not eligible for public rental housing or simply prefer the existing low rent accommodation.
Again, some Members have suggested that a rent subsidy should be given to eligible tenants on the Housing Authority's Waiting List for public rental housing. I must point out that public housing is not a social welfare provision. Those in need of public housing should wait for their turn. If people really face financial hardship, as I have said they may apply for Comprehensive Social Security Assistance and receive the appropriate amount of rent assistance.
Well, most of the extra amount of rent which an affected tenant will have to pay upon de-control of rent, if compare with a situation if rent control continues, will likely to be small.
In dollar terms, our estimates of the additional increases are $15 a month for cocklofts, $47 for bedspaces, $93 for bedrooms and about $570 a month for those people who rent the whole flat. This is a figure which assumes that landlords will increase rent to the full market level but this may not be the case. But in many cases, the projected increases are still generally affordable. It is, therefore, difficult to claim hardship against de-control.
Some people have again misunderstood that upon de-control landlords can immediately charge market rent. It is not true, there are transitional provisions already in the Ordinance which will cushions tenants from the impact of de-control for another two years from the dates when their rents were last increased.
I think that some Members have again missed another important point. Even after de-control, all former tenants will continue to enjoy security of tenure. Landlords while still cannot charge exorbitant rents and if the two parties cannot agree on the level of rent, they may apply to the Lands Tribunal for adjudication. This mechanism in itself effectively protects tenants from being asked to pay unreasonably high rents. There is no need, therefore, to extend rent control arrangement.