XN000022-1979-05-09 — Page 9

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WEDNESDAY, MAY 9, 1979

* DECONTROLLING PREWAR BUSINESS PREMISES

*

INCREASING CURRENT RENTS IN PREWAR BUILDINGS OF FROM THREE TIMES AND SIX TIMES THE 1941 STANDARD RENT IN DOMESTIC AND BUSINESS PREMISES TO FOUR TIMES AND EIGHT TIMES RESPECTIVELY, AND

* EXTENDING THE PERIOD OF SERVING NOTICE OF TENANCY

TERMINATION FROM SIX TO 12 MONTHS.

MR. SCOTT SAID THE EXTENSION OF RENT CONTROL ON POSTWAR DOMESTIC PREMISES WOULD MEAN TENANTS WOULD ENJOY SECURITY OF TENURE UNTIL DECEMBER 14, 1982.

HE SAID GENERALLY, RENT CONTROLS ON THESE PREMISES HAD WORKED SATISFACTOR ILY IN MAINTAINING A REASONABLE BALANCE BETWEEN THE INEVITABLE POLARISED INTERESTS OF LANDLORDS AND TENANTS. ABOUT 150,000 TENANCIES IN POSTWAR PREMISES ABOUT 80 PER CENT OF POSTWAR HOUSING STOCK AVAILABLE FOR LETTING ARE STILL SUBJECT TO THESE CONTROLS.

+AT PRESENT, RENTS OF THE MAJORITY OF CONTROLLED PREMISES STAND AROUND 70-75 PER CENT OF FAIR MARKET RENTS, HE SAID.

COMMENTING ON THE REDUCTION OF THE FACTOR FROM '3' TO '2' WHICH REGULATES RENT INCREASES, MR. SCOTT SAID THIS WOULD CONTINUE THE PROCESS OF GRADUALLY REDUCING THE DIFFERENTIAL BETWEEN REGULATED AND MARKET LEVEL RENTS.

HE ADDED, HOWEVER, THAT THE 21 PER CENT CEILING FOR RENT INCREASES OVER A PERIOD OF TWO YEARS WOULD CONTINUE TO BE APPLIED, EXCEPT FOR A FEW VERY LARGE FLATS, AS WAS THE CASE AT PRESENT.

ON PREWAR BUSINESS PREMISES, THE BILL PROPOSES TO REMOVE RESTRICTIONS ON THEM FROM JULY 1, 1984, BUT WHERE RESIDENCE WAS ALREADY ESTABLISHED IN THESE PREMISES, THE TENANT, AFTER JULY 1, 1984, WOULD HAVE THE RIGHT TO APPLY TO THE LANDS TRIBUNAL FOR AN EXTENSION OF HIS TENANCY NOT EXCEEDING ONE YEAR AT ANY ONE TIME.

THE RENT FOR SUCH A TENANCY WOULD ALSO BE FIXED BY THE LANDS TRIBUNAL AT FAIR MARKET RENT OR ONE-THIRD MORE THAN THE RENT THEN PREVAILING, WHICHEVER IS THE LESS.

MR. SCOTT SAID THERE WERE NOW LESS THAN 5,000 PREWAR BUILDINGS CONTAINING UNDER 14,500 UNITS. THESE WERE ORIGINALLY SUBJECT TO RESTRICTIVE CONTROLS, MITIGATED TO SOME EXTENT BY PROVISIONS UNDER THE ORDINANCE FOR REDEVELOPMENT, EXCLUSION AND RECOVERY FOR OWNER-OCCUPATION.

+AS A RESULT, 8,820 UNITS ONLY ARE NOW EFFECTIVELY CONTROLLED

60 PER CENT ARE USED FOR DOMESTIC PURPOSES AND 40 PER CENT FOR BUSINESS PURPOSES,+ MR. SCOTT REVEALED.

*THE LARGE MAJORITY OF THE UNITS EFFECTIVELY UNDER CONTROL CONSIST OF TENEMENT FLOORS CHARACTERISED BY FRAGMENTED OWNERSHIP, SUBTENANCIES, MIXED USES, AND POOR MAINTENANCE AND ENVIRONMENT. THE AVERAGÉ RENT PASSING FOR DOMESTIC UPPER FLOORS IS JUST OVER ONE-QUARTER OF FAIR MARKET RENT, AND FOR BUSINESS GROUND FLOORS IT IS LESS THAN ONE-HALF THE FAIR MARKET RENT,+ HE SAID.

/REFERRING TO