**********************************************************
Following is a question by the Hon Leung Kwok-hung and a written reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council today (February 8):
Question:
Regarding the domestic rental income of the Housing Authority ("HA"), will the Government inform this Council of:
(a) the domestic rental incomes generated respectively by the following building categories in each year during the period between 1999-2000 and 2004-05, as well as their respective percentages in the relevant total incomes of the years concerned:
(i) buildings completed before 1973;
(ii) buildings completed between 1973 and 1999, together with a breakdown of such figures by geographical distribution (urban areas, extended urban areas and the New Territories); and
(iii) buildings completed after 1999, together with a breakdown of such figures by geographical distribution (urban areas, extended urban areas and the New Territories); and
(b) the reasons for the increase in the total domestic rental income in 2004-05 as compared to the two preceding years; and whether HA plans to reduce or waive public housing rentals; if not, of the reasons for that?
Reply
Madam President,
My reply to the two-part question is as follows:
(a) Breakdown figures on income from the Housing Authority﷿s public rental housing programme from 1999-00 to 2004-05 are set out in the Annex.
(b) No adjustment to public housing rents has been made since 1998. The increase in overall rental income in 2004-05 as compared to the previous two financial years is due to the following three main reasons:
(i) the total number of flats has increased from 646 681 flats in 2002-03 and 660 916 flats in 2003-04 to 676 676 flats in 2004-05. The increase in households has brought in additional rental income;
(ii) with implementation of the Comprehensive Redevelopment Programme, more older-type flats of lower rents have been replaced by new, larger and better-provisioned flats of higher rents; and
(iii) in 2002-03 and 2003-04, to assist public housing tenants to tide over the economic downturn, the Housing Authority waived the payment of rates which formed part of public housing rents, resulting in reductions in rental incomes in these two years. In 2004-05, with economic recovery in evidence, the Housing Authority did not grant any further waiver and rental income had correspondingly bounced back to the normal level.
The Housing Authority has no plan to reduce public housing rents across-the-board, but will instead adopt a targeted approach of providing rental relief for tenants in financial hardship who are unable to afford normal rents. The Housing Authority has decided to further enhance the eligibility criteria of the 䩕Rent Assistance Scheme蒅. While non-elderly tenants with household income below 50% of the Waiting List Income Limit or with rent-to-income ratio exceeding 25% will continue to enjoy a 50% rent reduction, an additional eligibility tier will come into effect from 1 March this year to provide 25% rent reduction to non-elderly tenants whose income is between 50% and 60% of the Waiting List Income Limit or whose rent-to-income ratio stands at 20-25%. The new arrangement, which has in practise capped the rent-to-income ratio of public housing tenants at 20%, provides an effective relief to ensure rents are affordable to individual tenants.
The Court of Final Appeal ruled on the judicial review cases on public housing rents in November 2005. These cases clearly demonstrate the need for a more flexible and viable rent adjustment mechanism which can truly reflect tenants﷿ rental affordability, offer more choices for public housing tenants and ensure the sustainability of the public housing programme. The Housing Authority is now conducting a comprehensive review on its domestic rent policy. The public will be consulted on the proposals shortly.
Ends/Wednesday, February 8, 2006
Issued at HKT 12:50
NNNN
