Tightening Housing Policies: tenants to declare their properties every two years

With longer wait times and public housing in short supply, policies on well-off tenants have been controversial. In view of this, the Housing Authority's Subsidized Housing Committee met last Wednesday and approved the tightening of the policy in order to combat the abuse of public housing.

Under the current policy, the household income of a Public Rental Housing (PRH) household shall not exceed five times the income limit, while the total net asset value of the household cannot exceed 100 times the income limit. Moreover, the household must not own property in Hong Kong, or the tenants must vacate their PRH unit within 12 months.

Five categories of households are exempted, including (1) all members aged 60 or above, (2) all members on the Comprehensive Social Security Assistance (CSSA) Scheme, (3) all members eligible for/receiving Disability Allowance from the Social Welfare Department, (4) all members made up of the above three categories of persons, and (5) all members who share a flat under a joint tenancy. 

How is the government tightening housing measures? The Housing Authority started in three main directions, including changing the asset review period from 10 years after moving in to declaration every two years, particularly to find out if tenants own other properties in Hong Kong. In the meantime, tenants will also need to authorise the Housing Authority to inspect their assets, but stress that these declarations will not require money. 

If a tenant's income and asset limits exceed the ‘well-off tenant’ policy, the Housing Department will issue a Notice to Quit, and if the tenant has a temporary housing need, they may apply for a Temporary Residence Permit. In order to prevent these tenants from using the temporary housing period to transfer their assets to meet the requirements, the HA shortens the temporary housing period from 12 months to four months, after which they must move out. 

In addition, the HA also regulates public housing tenants to declare their assets within one month after purchasing a property, if the tenant fails to do so, this will be considered as providing false qualifications, a criminal offense; if the tenant refuses to declare property, the most serious punishment can be lease termination. 

Will the tightened measures help to combat public housing misuse? The original aim of the ‘Well-off Tenants Policies’ is to make better use of resources. Encrypted asset reviews can also identify ineligible tenants early, plug the loopholes to speed up the circulation of public housing, and help those who urgently need to improve their living environment. 

However, the revision of these measures may give rise to problems including cost, implementation, time, and market impact. Regardless of whether the tightening of the reporting period will inconvenience residents, the government will need to arrange more manpower to process the declaration materials and spot checks. This process will certainly cost more than before, and needs to be properly controlled to be truly effective. 

In terms of implementation time, since the amendment has been passed, ineligible tenants may speed up the transfer of their assets to meet the new requirements. Therefore, the government must first set a timetable and implement it as soon as possible, to catch more tenants avoiding the policy.  

In addition, some tenants who are unable to transfer their assets will be able to enter the secondary unpaid market through the Green Form in order to avoid termination of their tenancy, leading to an increase in transactions in the unpaid market and perhaps record prices. 

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