Rent for Public rental housing to adjusted upwards by 1.17% effective from 1st October

262

15th August 2022 – (Hong Kong) The Subsidised Housing Committee (SHC) of the Hong Kong Housing Authority (HA) today endorsed the outcome of the 2022 rent review of public rental housing (PRH) in accordance with section 16A of the Housing Ordinance (HO) and special relief measure for PRH tenants in accordance with section 17 of the HO.

“Section 16A of the HO provides that the HA shall conduct a rent review every two years in accordance with the mechanism stipulated therein and vary the PRH rent according to the change in the income index between the first and second periods covered by the review. The report compiled by the Commissioner for Census and Statistics (C for C&S) for the 2022 PRH rent review showed that the income index of the second period of the review (i.e. 2021) was higher than that of the first period (i.e. 2019) by 1.17 per cent. Therefore, PRH rent will be adjusted upwards by 1.17 per cent with effect from 1st October, 2022. The increase is about $26 per PRH household per month on average, and the range of monthly adjustment is from $5 to $66. 

 “At the same time, the SHC also decided to provide a special relief measure to PRH tenants by waiving the extra rent payable each month due to the rent adjustment in the first 12 months following the rent adjustment by virtue of section 17 of the HO. Notwithstanding the mild increase, members of SHC are mindful that the impact of the unprecedented COVID-19 pandemic may pose economic difficulties for PRH tenants. Given this special situation, the SHC considers it not unreasonable to provide some form of relief measure to ameliorate the possible economic burden on PRH tenants which may be brought by the rent increase. Having regard to the extent of the rent increase, the impact on PRH tenants, and the impact on HA’s financial position, the SHC endorsed providing the special relief measure to PRH tenants. The provision of the special relief measure will result in a total of $262 million of rental income foregone in 2022-23 and 2023-24 for HA,” a spokesman said.

The HA will notify all PRH tenants in writing one month before the implementation date of the new rent. The rent adjustment will take effect from 1st October, 2022.

 The HO stipulates the PRH rent adjustment mechanism, which came into effect in 2008. Under this mechanism, PRH rent is reviewed every two years. Section 16A(7)(b) of the HO provides that the C for C&S shall compute the income index for the first and second periods under a rent review. The income index is compiled by comparing the income data of about 24,000 PRH households in each of the periods. The mechanism provides an objective basis for the HA to determine when and to what extent PRH rent should be adjusted, taking into account tenants’ affordability. According to the mechanism, there is a 10 per cent cap on the rate of rent increase, whereas there is no floor in the case of rent reduction. The income of PRH households has increased cumulatively by 108.6 per cent from 2007 to 2021 while PRH rent will have only increased by 70 per cent cumulatively during the same period (upon a 1.17 per cent rent increase pursuant to the outcome of the current rent review), which shows that tenants’ income increase has exceeded the rent increase.

Comments