HK lawmaker questions need for subsidy payments to entice landlords to take part in temporary housing scheme

08-May-2021 Intellasia | South China Morning Post | 5:02 AM Print This Post

A Hong Kong lawmaker has expressed misgivings about whether landlords should benefit from a scheme to convert vacant properties into temporary homes for the poor, pressing for more clarity as officials asked to expand the programme to include additional payments to owners.

Housing officials on Wednesday said subsidies to landlords were necessary to lure more property owners into taking part in the temporary housing scheme. But Michael Tien Puk-sun, of the pro-establishment political organisation Roundtable, said he was “not comfortable” with the direction the scheme was heading in, suggesting officials had not been clear when it came to how the programme worked.

“I would like to ask whether landlords were going to charge rent all along. If so, why didn’t you tell us in the first place?” he said. “You gave people an impression that the premises were vacant anyway, and they would be simply made available to help others.”

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The scheme, first announced by city leader Carrie Lam Cheng Yuet-ngor in 2019, aims to improve the living conditions of low-income families on the waiting list for public rental housing by supplying 15,000 temporary homes by 2023.

The HK$8.3 billion in funding pays for NGOs to convert vacant public or private buildings into temporary housing, or to construct modular housing units on disused land. The funding scope covers construction and renovation works, professional services, administrative work and insurance, with ongoing management of the facilities handled by the NGOs.

But at a meeting of the Legislative Council’s housing panel on Wednesday, officials proposed the scope of the scheme be expanded to cover additional rental payments to property owners who lent their buildings for the scheme.

Currently, it is the NGOs that collect rent from tenants at well below the market rate, passing some of that money on to the landlords.

However, there are no official guidelines as to whether, or how much, participating landlords can charge the NGOs in rent. Some big developers, for instance, choose to charge only nominal rent on land they put up for the scheme, seeing the contribution as a form of philanthropy.

But officials on Wednesday said that based on the feedback groups involved in the scheme, the amount of rent collected from tenants by the NGOs might not be enough to cover what they, in turn, have to pay to the landlords. As such, additional payments to landlords may be necessary to make the scheme worth property owners’ while.

Tien, however, questioned whether such an arrangement was appropriate, and asked whether the sweeteners for landlords were anticipated in the original design of the scheme.

He also slammed as unreasonable the amount of rent paid by residents of such housing facilities, which is capped at 40 per cent of the income limit for public rental housing applicants. Based on the monthly income threshold of HK$24,410 (US$3,142) for a three-member household, rents under the temporary housing scheme could be as high as HK$9,764, he said.

“From a rational perspective, I don’t know what’s going on, because this proposal simply doesn’t work,” he said. “You are subsidising rent for owners and you are doing conversion works for them, and the tenants are also suffering. Why don’t you simply give the money to tenants so they can rent premises?”

Under the scheme, NGOs get HK$200,000 to cover conversion costs for each unit of transitional housing provided through existing buildings, and HK$550,000 for each unit built from scratch.

Officials maintained the proposed subsidies for landlords could be absorbed within the current funding limits.

Responding to Tien, Undersecretary for Transport and Housing Raymond So Wai-man said the government needed to offer the additional payments to landlords to encourage them to contribute their properties to the scheme.

“There are different considerations for different projects. Some landlords won’t charge any rent but others will charge rent at the market rate when leasing their premises to NGOs to provide transitional housing units,” So said.

Panel chair Tommy Cheung Yu-yan made the decision to pass the proposal to the Finance Committee for approval, noting that all political parties supported the proposal except Tien.

So far, about HK$2.6 billion out of the HK$8.3 billion in total has been approved under the funding scheme.


Category: Hong Kong

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