Chapter 12: Public Rental Housing

At present, about 2.12 million people or 31.35 per cent of Hong Kong's population live in public rental housing estates managed by the HKHA or the HKHS. It is the Government's policy to ensure that these flats are allocated to families in genuine need. At the end of December 2001, there were 95 800 households on the Waiting List for public rental housing, including 19 500 singletons.

The current average waiting time for public rental housing is 3.7 years, and the Government has undertaken to reduce the average waiting time to three years by 2003, two years ahead of its original schedule.

The Government pledged in the 2001 Policy Address exercise to examine in 2002 the feasibility of a pilot scheme to provide rental allowances to eligible non-elderly households as an alternative means of providing public rental flats.

The affordability of flats in the private sector is the key factor in considering rent levels of public rental flats. There is a statutory requirement that rents for existing public housing estates cannot be adjusted more frequently than every three years, and that the overall Median Rent-to-Income Ratio for all estates following rent adjustment should not exceed 10 per cent. Other factors taken into consideration include estate value, inflation, rates, and maintenance and management charges. At present, public housing rents include rates and management and repair expenses. Public housing tenants pay, on average, 39 per cent of the assessed market rent (inclusive of rates) for the flats they live in.

Public housing tenants facing temporary financial hardship may apply for a 50 per cent rent reduction under the Rent Assistance Scheme operated by the HKHA. At the end of the year, 7 200 households benefited from this scheme.

Better-off tenants are required to pay higher rents. In 2001, the subsidy saved through charging additional rent amounted to $139 million. Some 2 844 better-off tenants, including 1 912 households which acquired their own flats under the HOS, PSPS or HPLS, returned their public rental housing flats to the HKHA. Tenants who exceed both the income limit and the net asset limit, and double-rent paying households which choose not to declare their household assets are required to move out. Since February 1999, 9 200 households have surrendered flats to the HKHA under this policy.

In 2001, 70 527 flats were allocated by the HKHA and the HKHS to various categories of applicant. Of these flats, 49 900 were new, 19 700 refurbished and 927 being vacant flats: 56 per cent were allocated to Waiting List applicants, 29 per cent to tenants affected by the HKHA's Comprehensive Redevelopment Programme, 1 per cent to families affected by clearances, 2 per cent to junior civil servants, and the remainder to victims of fire and natural disasters, occupants of huts and other structures at dangerous locations, and compassionate cases recommended by the Social Welfare Department.

Flats are allocated in accordance with the order of registration and applicants' choices of district. Applicants are required to satisfy comprehensive means tests (covering income and assets), a non-domestic-property rule and residence requirement before being admitted into public rental housing.

Since the launching of the HKHA's Comprehensive Redevelopment Programme in 1988, 515 housing blocks have been redeveloped to improve the living conditions of some 173 300 households. In 2001, 55 blocks were cleared and 25 900 households were rehoused. Over the next five years, another 51 old blocks will be redeveloped.