Critics of new well-off tenant policy lack sound reasons
The waiting list for public rental housing has reached a record high. The current waiting time for public rental housing is far longer than the three years previously promised by the Housing Authority (HA). The main reason for this is that more citizens are turning to public rental housing as the housing cost in Hong Kong is so expensive that many people can no longer afford private housing. To solve the problem of insufficient supply, the solutions always lie in reducing the demand and increasing the supply. Hence, the HA is obliged to reduce the abuse of public rental housing, so that these scarce resources can be assigned to those who are in real need of public rental housing.
The Subsidised Housing Committee of the HA has recently adopted a new policy targeting well-off tenants. This policy, which will be in place next year, will look at the income level of the tenants and the value of assets they have. If either the income level or the value of assets on hand exceeds the prescribed limit, the tenants need to move out. Also, those who own a residential property in Hong Kong will not be allowed to live in public rental housing units. This differs from the current policy in which tenants are required to move out only if both the income and asset limits are exceeded.
Frankly speaking, this new policy cannot be said to be wrong. Take the income limit as an example. The new monthly income limit is HK$133,450 for a household of four. By any standard, a household with such a high income can well afford private housing. Theoretically, public rental housing should be for those who cannot afford private rental housing. And this is exactly the policy objective of the HA — to provide public rental housing for those who cannot afford the private rental market. It has never been the intention of the HA to help people buy a flat.
From a policy point of view, the new rule is to uphold the policy objective of the HA. Theoretically, when tenants of public rental housing units become well-off, they should move out so that the housing units can be allocated to needier people. The problem is the welloff tenants need to pay much higher rents in the private market if they move out of public rental housing units. Given economic rationality, the well-off tenants have no incentives to move out unless they are forced to. Despite previous efforts by the HA, the number of public rental housing units released by welloff tenants is not substantial.
It is still too early to evaluate the effectiveness of the new policy. But we need to evaluate the policy according to the objectives and not by unrelated figures. Hence, it will not be appropriate to conclude that the policy is ineffective even if not many well-off ten- The author is the dean of the School of Continuing Education at Hong Kong Baptist University.
From a policy point of view, the new rule is to uphold the policy objective of the HA. Theoretically, when tenants of public rental housing units become welloff, they should move out so that the housing units can be allocated to needier people.”
ants move out eventually. Given there is still 10 months to go before the new policy is in place, the well-off tenants have ample time to adapt to the new policies. The point is that we should look at the policy from the grounds of fairness and not just blunt numbers.
Undeniably, the new policy will affect the interests of some people and there have been criticisms that it has been adopted without careful consideration, with some claiming the new policy should be tabled before the Legislative Council for more thorough discussion before implementation. Some also have said that the tightening of the well-off tenant policy aims to divert people’s attention from the inability of the HA to produce sufficient flats. These comments are not valid. It is not true that there was not sufficient consideration. Three years ago, the Audit Commission already advised the HA to review the well-off tenant policy. It is always possible for policymakers to do a better job; however, it would be unfair to say that the policy was made without careful consideration.
Hong Kong is a society with differing views. The HA’s Subsidised Housing Committee has its own mandate in formulating policies for public rental housing and there is no need for it to seek approval from LegCo on every decision it makes. Also, the volume of public rental housing units constructed is closely monitored by the community and people’s attention to this aspect will not be diverted by other housing policies. In short, critics of the new well-off tenant policy have failed to come up with sound reasons.