176
HONG KONG URBAN COUNCIL
colleagues said we were referring to the fair market rent. As far as I know, fair market rent is used as a basis. There is a discount rate and usually there is a graded increase for three years. I think fellow colleagues need to clarify this point for stall operators to know.
In fact, market trading activities are basically commercial activities. It makes sense, and from the public's point of view too, to dispense with subsidy. However, as I just pointed out, many of our market traders had exchanged their street hawker licences with us because of urban cleaning or demolition, In the circumstances, the Council are obliged to take care of them. To a certain extent, they were moved into our markets without any choice. We feel that at least at this stage, it is necessary for us to reduce their rental.
The relationship between market traders and the Urban Council should not be looked at as one between tenants and landlord. The Council should not aim at providing market services on a purely commercial principle by making profit the first priority. It should seek to satisfy the various needs of the society. The pre-requisite is to ensure viability in markets. From there, we can go on to solve the various problems that arise. So, we feel that the relationship between the Council and market traders should be one of cooperative partnership.
At present, the Council subsidizes market traders to an extent. We must note that the rate of subsidy has been going up and we are talking of hundreds of millions of dollars. Maybe one of the reasons is that the efficiency of the USD is falling and we are unable to control cost effectively. However, this Council must clarify to what extent it is responsible to market traders, in particular those moved in because of demolition or clearance. Should we take fair market rent as a basic indicator when we decide on rental amount as we are doing now? If this Council does not have a consensus on this, the fixing of rent will become a tool for the distribution of profit. In such case, we will not be able to attain the principles of fairness and reasonableness. So, when we review our rental policy in future, we should seriously consider the extent of commitment of the Council.
On the other hand, I want to point out that we are just over-simplifying the issue if we expect rental-freezing to be the solution to the problems faced by market tenants. In fact, what we should be concerned most should be whether market operating conditions are satisfactory. For many stall traders (in fact I had a meeting yesterday with some stall operators of the Central Market and learnt the same), they would choose market stalls charging high rent if they could expect good operating conditions and high patronage. The question is whether operating conditions are satisfactory. If we just talk about the rental policy and expect low rent to be an attraction for market traders, we are over-simplifying the whole thing. If citizens do not want to patronize our markets, then offering stalls at low rent will not help.
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Page 180 of 498
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Page 180 of 498
age 180 of 498
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176
HONG KONG URBAN COUNCIL
colleagues said we were referring to the fair market rent. As far as I know, fair market rent is used as a basis. There is a discount rate and usually there is a graded increase for three years. I think fellow colleagues need to clarify this point for stall operators to know.
In fact, market trading activities are basically commercial activities. It makes sense, and from the public's point of view too, to dispense with subsidy. However, as I just pointed out, many of our market traders had exchanged their street hawker licences with us because of urban cleaning or demolition, In the circumstances, the Council are obliged to take care of them. To a certain extent, they were moved into our markets without any choice. We feel that at least at this stage, it is necessary for us to reduce their rental.
The relationship between market traders and the Urban Council should not be looked at as one between tenants and landlord. The Council should not aim at providing market services on a purely commercial principle by making profit the first priority. It should seek to satisfy the various needs of the society. The pre-requisite is to ensure viability in markets. From there, we can go on to solve the various problems that arise. So, we feel that the relationship between the Council and market traders should be one of cooperative partnership.
At present, the Council subsidizes market traders to an extent. We must note that the rate of subsidy has been going up and we are talking of hundreds of millions of dollars. Maybe one of the reasons is that the efficiency of the USD is falling and we are unable to control cost effectively. However, this Council must clarify to what extent it is responsible to market traders, in particular those moved in because of demolition or clearance. Should we take sair market rent a basic indicator when we decide on rental amount as we are doing now? If this Council does not have a consensus on this, the fixing of rent will become a tool for the distribution of profit. In such case, we will not be able to attain the principles of fairness and reasonableness. So, when we review our rental policy in future, we should seriously consider the extent of commitment of the Council.
On the other hand, I want to point out that we are just over-simplifying the issue if we expect rental-freezing to be the solution to the problems faced by market tenants. In fact, what we should be concerned most should be whether market operating conditions are satisfactory. For many stall traders (in fact I had a meeting yesterday with some stall operators of the Central Market and learnt the same), they would choose market stalls charging high rent if they could expect good operating conditions and high patronage. The question is whether operating conditions are satisfactory. If we just talk about the rental policy and expect low rent to be an attraction for market traders, we are over- simplifying the whole thing. If citizens do not want to patronize our markets, then offering stalls at low rent will not help.
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