Ease restrictions on letting scheme to assist needy tenants
【譯文】Launched by the Hong Kong Housing Society (HKHS) in September 2018, the "Letting Scheme for Subsidised Sale Developments with Premium Unpaid" has only received lukewarm response. Sources said the HKHS is now planning to loosen restrictions, allowing entire flats to be leased out. Also, the letting scheme might be expanded to include subsidised flats that were sold by the Hong Kong Housing Authority, which would add another 410,000 eligible flats to the scheme. Relaxing the restrictions on the letting scheme and releasing more affordable flats to the rental market will make it possible to really improve the living conditions at the grassroots level. The authorities should set a cap on the rent a landlord could charge, so as to achieve social equity while realising the goal of helping the grassroots.
Over the past few months since the HKHS' letting scheme has been rolled out, only five owners have been approved to rent out their rooms, while 22 tenants have been found qualified to rent them. Not a single successful match has been made. It is obvious that the numerous restrictions have undermined the attractiveness of the scheme. The biggest flaw of the scheme is that it only allows owners to rent out spare rooms, not the entire flat. The era of the 1970s classic, "the House of 72 Tenants", has been long gone. As people nowadays value private space, it is only natural for them to find the letting scheme unappealing, as they will have to live under the same roof with strangers, or even a whole different family. Therefore, loosening the restrictions to allow entire eligible flats to be rented out could boost the letting scheme's attractiveness.
At present, subsidised sale flats in Hong Kong are mainly comprised of Home Ownership Scheme flats and Tenants Purchase Scheme flats. Under the provisions of the Housing Ordinance, these flats shall not be leased out unless the owner settles the land premium first. The maximum penalty for unlawful alienation is a fine of HK$500,000 and imprisonment for one year. As the Home Ownership Scheme and the Tenants Purchase Scheme had been launched for 40 years and 22 years respectively, expanding the letting scheme to allow these units to enter the rental market can swiftly increase supply. This will be a pragmatic approach to alleviate the high rents and the housing shortage in Hong Kong.
However, since the subsidised flats with unpaid premium were purchased at a discount and specific for self-use purpose only, it will precipitate double benefits and contradict social equity principles if owners are allowed to freely lease out such flats on market rates. Therefore, the government must hold firm its original intention of addressing the needs of the grassroots when considering to ease the restrictions of the letting scheme, and seek to set reasonable limits on the qualifications of flat owners and tenants.
Under the current rules of the letting scheme, eligible owners must have owned the property for 10 years or more. Such provisions should be kept unchanged in order to prevent attracting speculative Home Ownership Scheme applicants, who only seek to rent out their flats for profit. In such a case, those who are in need would have a greatly reduced chance of a successful application, and the Home Ownership Scheme flats would be reduced to money-making tools of opportunists. The authorities should also adhere to their intention of assisting those who are waiting for low-rent public housing, and limit eligible tenants to those who have been in the queue for public rental housing for at least three years. As for rental rates, despite the HKHS said it will be set through negotiations between the owner and the tenant, the letting scheme is originally intended to help needy individuals and families that are on the waiting list for public housing. Instead of allowing owners to lease out their subsidised flats at market rates, a reasonable cap on rents should be put in place, otherwise it will defeat the purpose of addressing the needs of the grassroots.■Jeffrey Tse (email@example.com)
3. 香港房屋協會 (房協)
5. 香港房屋委員會 (房委會)
2. tenancy agreement
3. the Hong Kong Housing Society
4. the Housing Department
5. the Hong Kong Housing Authority