Eviction looms for 'well-off' tenants in HK public rental homes

Hong Kong

HONG Kong is set to kick out wealthier public housing tenants as part of controversial new policies in a city plagued by unaffordable housing woes and lengthening waiting times for such public rental homes.

The subsidised-housing committee of Hong Kong's Housing Authority late Tuesday night finalised and endorsed measures that will force "well-off tenants" in public rental housing (PRH) to vacate their homes, beginning this October. The authority said that this would allow it to better allocate resources to those with "more pressing housing needs".

"Well-off tenants" are defined as those whose monthly income exceeds the corresponding limit - ranging from HK$10,970 (S$2,000) for a single person to HK$52,440 for a household of 10 or more persons - by five times, or if their net assets exceed the limit by 100 times. Any tenants with private flats will also need to vacate their public housing units, regardless of income or asset worth.

Households that are required to vacate their PRH flats but have a "temporary housing need" can apply for a licence to stay on for up to a year by paying a licence fee "equivalent to the double net rent plus rates or market rent, whichever is higher".

Under existing policy, those who earn more than three times the income limit need to pay double the rent plus rates. As at June last year, there were about 26,000 such households - or less than 4 per cent of the 738,700 PRH households. These could be families whose household income grew after they qualified for PRH flats.

Housing authority statistics show that as at end December, there were about 148,800 general applications for PRH, with an average waiting time of 4.7 years - much longer than the government's target of three years.

A spokesman for the Housing Authority said on Tuesday night in a statement that the new measures "will not reduce the average waiting time for PRH in the short term", but that "in light of the increasing demand for PRH, it is necessary for us to examine whether we can better allocate PRH resources to applicants with more pressing need and also make the relevant policies more equitable".

The authority, in its proposal of the new policies, outlined Census and Statistics Department data showing that those earning five times the maximum income limit already belonged to the city's top 3 to 7 per cent of earners.

This means that for "households at this bracket on the verge of being driven out, their financial circumstances should be favourable, so they should have other options to better leverage housing investment", said Yip Ngai-ming from City University of Hong Kong's department of public policy.

The new measures "may push households to seriously consider other options rather than subsidised housing", but they come across as unnecessarily harsh, Prof Yip added. "You can encourage, not compel, people in better position to take up other alternatives, so as to free up subsidised housing. That's a better alternative than . . . forcing people to leave."

Public housing policy watcher Law Chi Kwong said that those in the waiting lines should also not get their hopes too high as the "number of affected tenants is small so the flats freed up would be rather limited". Families already in these residences may also suffer from an unintended "downside" of having grown children entering the workforce moving away from elderly parents in need of care so as to keep household incomes within PRH limits, he added.

But Rebecca Chiu, the director of the University of Hong Kong's Centre of Urban Studies and Urban Planning, said that the new policies signalled a much-needed tightening of the public housing sector, and erred on the "lenient" side.

"I think it should be further tightened by decreasing the multiplier limits. It would not be very effective as it is because only a small number will have to move out," Prof Chiu said, noting that a monthly income three times the limit, instead of five, would be a better benchmark. "The basic principle is to provide housing for those who cannot afford it ... not welfare housing."