Public Rental Housing

Under the new policy framework, the provision of assistance to those in genuine need continues to lie at the heart of the Government's housing policy. The Government would work to ensure that all those who cannot afford adequate accommodation in the private market have the opportunity to have access to subsidised PRH. It is committed to maintaining the average waiting time for PRH at around three years and ensuring that there is an adequate supply of public rental housing through a rolling construction programme run by the HKHA. The actual quantum of PRH units to be built will be adjusted regularly taking account of the housing demand of low-income families and the turnover in PRH tenancies. To maximise the cost-effectiveness in the construction process, the HKHA has reviewed the design standards and finishes for new public rental housing in support of the concept of a 'Functional and Cost-effective' design.

At present, about 2 130 200 people or 31 per cent of Hong Kong's population live in public rental housing estates managed by the HKHA or the Hong Kong Housing Society³. At December, there were 90 240 households on the Waiting List for PRH. The current average waiting time for PRH is 2.1 years.

Rent Policy

The affordability of tenants is the prime factor in determining rent levels of public rental flats. Other factors taken into consideration include estate value, maintenance and management charges, rates and general household incomes. At present, public housing rents are inclusive of rates and management and maintenance expenses. Public housing tenants pay, on average, 48 per cent of the assessed market rent (inclusive of rates) for the flats they live in.

The HKHA has established an Ad Hoc Committee on Review of Domestic Rent Policy to conduct a comprehensive review of its domestic rent policy. The objective is to map out a rent adjustment mechanism that is more flexible, draws a closer link with tenants' affordability and promotes the long-term sustainability of the public housing programme.

Rent Assistance

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. The scheme was revised in October 2002 and the eligibility criteria for elderly households were relaxed. Tenants affected by redevelopment were also allowed to apply for rent assistance immediately upon rehousing. By year-end, 20 903 households had benefited from this scheme since its implementation in 1992.

Better-off Tenants

Better-off tenants are required to pay higher rents. At December 31, there were 14 879 households paying the higher rents. The subsidy saved through charging under this scheme amounted to $164 million in 2003. In addition, tenants living in estates for more than 10 years with both household income and assets exceeding the prescribed limits, or choosing not to declare household assets, are required to move out. In 2003, some 962 better-off tenants, including 503 households which acquired their own flats under the HOS, the Private Sector Participation Scheme (PSPS) or the HALS, returned their public rental housing flats to the HKHA.

Allocation

In 2003, 40 091⁴ rental flats were allocated by the HKHA and the HKHS to various categories of applicants. Of these flats, 19 944 were new and 19 966 refurbished: 70.11 per cent were allocated to Waiting List applicants, 1.56 per cent to tenants affected by the HKHA's Comprehensive Redevelopment Programme, 0.88 per cent to families affected by clearances, 2.46 per cent to junior civil servants, 24.92 per cent to sitting tenants for transfers including overcrowding relief, and the remainder to victims of fire and natural disasters 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), not to own any domestic property and to meet the residence rule in Hong Kong before being admitted into public rental housing. To speed up the letting of some less popular flats, the HKHA launched the Express Flat Allocation Scheme and invited all eligible applicants on the Waiting List to select a flat from among the vacant flats, with prolonged vacancy periods, in all districts. During the year, 1 100 households were successfully rehoused under this scheme.

Rent Allowance Schemes

The Rent Allowance for Elderly Scheme was launched as a pilot scheme in August 2001 to give elderly applicants an arrangement to receive cash rent allowances to lease private accommodation in lieu of PRH allocation. Upon implementation, the pilot scheme attracted only a lukewarm response. Out of the total quota of 1 100 allowances in the two-year trial period, only about 620 were utilised. The HKHA therefore decided to phase out the scheme in September 2003 by ceasing to accept new applications. Existing beneficiaries, upon expiry of the current private leases, can opt for PRH units or continue to receive cash rent allowances provided that they still meet the prevailing eligibility criteria.