XN000022-1986-10-29 — Page 25

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WEDNESDAY, OCTOBER 29, 1986

+IN CHARGING 15 PER CENT OF THE MEDIAN INCOME THOSE HOUSEHOLDS WITH AN INCOME BELOW THE MEDIAN ARE IN FACT PAYING A PERCENTAGE ABOVE 15 PER CENT,+ HE SAID.

+THE HOUSEHOLDS AT THE BOTTOM OF THE INCOME DISTRIBUTION MAY PAY AS MUCH AS 30 PER CENT OF THEIR INCOME FOR RENT.+

+ON THE CONTRARY, THOSE HOUSEHOLDS WITH AN INCOME ABOVE THE MEDIAN WILL PAY LESS THAN 15 PER CENT OF THEIR INCOME FOR RENT.+

+THIS PHENOMENON ENTAILS A CROSS-SUBSIDISATION IN DISCRIMINATION AGAINST THE WORSE-OFF TENANTS.+

DR HO SAID THAT IN THE INTEREST OF SOCIAL EQUITY AND IN LINE WITH THE SOCIAL OBJECTIVE OF PUBLIC HOUSING, A 10 PER CENT LIMIT SHOULD BE IMPOSED ON THOSE HOUSEHOLDS BELOW THE MEDIAN INCOME, AND A 15 PER CENT LIMIT ON THOSE ABOVE IT.

IN GENERAL DR HO PERSONALLY CONSIDERED THE PROPOSED 15 PER CENT MEDIAN RENT-INCOME GUIDELINE TO BE +FAIR AND PRACTICABLE AND IS WELL WITHIN THE TENANT'S ABILITY TO PAY+.

+ BY THIS STANDARD, THE PUBLIC HOUSING TENANTS PAY ABOUT ONE THIRD OF WHAT THEIR COUNTERPARTS IN THE PRIVATE SECTOR ARE PAYING FOR THEIR ACCOMMODATION, HE SAID.

IN ADDITION, THEIR COUNTERPARTS MAY HAVE TO PAY RATES, MANAGEMENT FEES AND MAINTENANCE AND REPAIR CHARGES.+

AS THE AVERAGE RENT-INCOME LEVELS FOR ALL PUBLIC HOUSING CATEGORIES IN 1983-84 AND 1984-85 WERE 12.3 PER CENT AND 13.5 PER CENT RESPECTIVELY, DR HO BELIEVED THE 15 PER CENT GUIDELINE WOULD BE VERY UNLIKELY TO CAUSE HARDSHIP TO PUBLIC HOUSING TENANTS.

FURTHERMORE, THIS METHOD OF PEGGING RENT TO THE TENANT'S MEDIAN HOUSEHOLD INCOME SHIELDED THE TENANT FROM THE EFFECTS OF ANOMALOUS FLUCTUATIONS IN THE PROPERTY MARKET AND ECONOMIC DEPRESSIONS, HE ADDED.

TURNING TO THE PRINCIPLES OF HOUSING SUBSIDIES, DR HO SAID SUBSIDISED HOUSING SHOULD NOT BE VIEWED AS A LIFE-LONG ENTITLEMENT.

HE THEREFORE ENDORSED THE PROPOSAL MADE BY THE COMMITTEE ON HOUSING SUBSIDY THAT THOSE PUBLIC HOUSING TENANTS WHOSE TOTAL HOUSEHOLD INCOME EXCEEDED THE REVISED SUBSIDISED INCOME LIMIT AT THE EXPIRY OF THE INITIAL 10-YEAR RESIDENCE, SHOULD PAY DOUBLE THEIR EXISTING RENTS.

/+SECURITY OF