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Wednesday, Jun 23, 2021

Rent control urged for subdivided flats

Rent control urged for subdivided flats

Concern groups want the government to control the starting rents of subdivided flats and not just the rent increases.
Their comments came as a working group on rent control is set to submit its final proposal to the government at the end of this month.

Earlier, the working group had refused to set a starting point for rents because it was difficult to find a calculation method acceptable for both landlords and tenants.

In a press conference yesterday, the Subdivided Flat Platform said the authorities must regulate both starting rents and rent increases for subdivided flats.

"If the government only regulates rent increases and ignores the starting rents, flat owners could set rents as high as they want when signing a new lease," said Tang Po-shan, convener of the group.

"Therefore, regulation of the starting rents and rent increases complement each other," he said.

Tang said setting reasonable starting rents was not as difficult as the authorities had suggested, and he recommended the starting rent upper limit to be 150 percent of a flat's rateable value.

Tang also said rental increases should be capped at no more than 10 percent each time and only be carried out every two years in accordance with inflation.

Tang also said there were no statistics to support the government's claim that limiting the rental increases would reduce the supply of subdivided units.

"The claim that a restriction on rental increase would reduce housing supply is actually overstated," he said. "Flat owners have already invested a sum of money in remodeling the house into subdivided units, and they will have to spend more money to remodel the house again should they decide to stop renting."

The group also suggested tenants have priority in renewing a lease for two years after expiry and there should be a minimum three-month notice period for relocation or a rent increase.

The call comes as a survey found that 70 percent of mothers living in subdivided units are prone to depression.

The Sham Shui Po Subdivided Units Mothers Mutual Aid Association surveyed 130 mothers living in the district and found their average rent was more than HK$5,000, accounting for about 55 percent of their income.

Around 70 percent of the respondents were prone to depression because of financial pressure and small living space.

The subdivided units also failed to provide an adequate living and studying environment for children, the respondents said.

The group urged the government to speed up the construction of public housing to reduce waiting time.

It also suggested the authorities should control the rents of subdivided units.

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