XN000022-1990-07-18 — Page 3

WEDNESDAY, JULY 18, 1990

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MEASURES TO BRING RENTS UP TO REALISTIC LEVEL

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THE GOVERNMENT'S LONG-TERM OBJECTIVE IN RESPECT OF RENT CONTROL IS THAT EVERY EFFORT SHOULD BE MADE TO ACCELERATE THE PHASING OUT OF RENT CONTROL, PROVIDED THAT SOCIAL DISRUPTION AND ECONOMIC HARDSHIP CAN BE AVOIDED, THE SECRETARY FOR HOME AFFAIRS, THE HON PETER TSAO, SAID TODAY (WEDNESDAY).

HE WAS MOVING THE LANDLORD ORDINANCE (AMENDMENT) RESOLUTION 1990

AND TENANT (CONSOLIDATION)

THE LEGISLATIVE COUNCIL.

THE FIRST PROPOSAL IN THE | ESOLUTION SREKS ΤΟ RAISE THE PERMITTED RENT OF PRE-WAR DOMESTIC PREMISES COVERED BY PART I OF THE ORDINANCE, TO A MORE REALISTIC LEVEL.

THE SECOND PROPOSAL IS ΤΟ RAISE THE SO-CALLED "MINIMUM PERCENTAGE COMPONENT" IN THE RENT INCREASE MECHANISM THAT APPLIES то POST-WAR DOMESTIC PREMISES PROTECTED UNDER PART II OF THE ORDINANCE.

MR TSAO SAID THOSE RENT CONTROLS WOULD ' REVIEWED AGAIN NEXT YEAR, TAKING ACCOUNT OF THE STATE OF THE PR "ERTY MARKET AND THE SOCIAL AND ECONOMIC CONSEQUENCES.

"IF THE CURRENT PROPERTY AND RENTAL MARKETS CONTINUE TO BE REASONABLY STABLE IN THE NEXT FEW YEARS, THE ADMINISTRATION EXPECTS THAT THE MINIMUM PERCENTAGE COMPONENT CAN BE REVISED ANNUALLY SO THAT, WITHIN ABOUT TWO TO THREE YEARS OR EVRN EARLIER, RENTS WILL HAVE INCREASED TO A LEVEL AT WHICH PART II CONTROLS CAN BE ALLOWED TO LAPSE WITHOUT CAUSING UNDUE HARDSHIP TO THE TENANTS. IT IS ALSO INTENDED TO PHASE OUT PART I CONTROLS AT THE SAME TIME, HE SAID.

It

"AT THAT POINT, THE WHOLE ORDINANCE INCLUDING PART IV WILL BE LOOKED AT TO SEE WHAT CHANGES WOULD BE APPROPRIATE ΤΟ BRING THE PROVISIONS UP TO DATE, HE ADDED.

I

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ON THE INCREASE IN THE PERMITTED RENT OF PRE-WAR DOMESTIC PREMISES, MR TSAO EXPLAINED THAT THE RENT OF SUCH PREMISES WAS DERIVED FROM A "STANDARD RENT" PAYABLE AS AT DECEMBER 25, 1941.

THE CURRENT "PERMITTED RENT" WAS SET AT 43 TIMES THIS LEVEL, AND IT WAS NOW PROPOSED TO INCREASE THIS то 48 TIMES THE STANDARD RENT, HE SAID.

HE NOTED THIS CHANGE WOULD BRING THE AVERAGE PERMITTED RENT OF PRE-WAR DOMESTIC PREMISES UP FROM 71 PER CENT TO 76 PER CENT OF THE PREVAILING MARKET LEVEL.

IT WOULD RESULT IN AN INCREASE OF ABOUT 12 PËR CENT, OR $180 PER MONTH, ON CURRENT PERMITTED RENTS AND WOULD AFFECT ABOUT 1,200 DOMESTIC PREMISES.

REGARDING THE

OF

THE

PROPOSED CHANGE IN THE "MINIMUM PERCENTAGE COMPONENT", MR TSAO SAID THE AMOUNT OF INCREASE IN RENT IN RESPECT TENANCIES PROTECTED UNDER PART II OF THE ORDINANCE WAS LIMITED TO DIFFERENCE BETWEEN THE CURRENT RENT AND THE PREVAILING MARKET RENT, BUT SUBJECT TO A CEILING OF 30 PER CENT OF THE CURRENT RENT.

/"HOWEVER, IF