Govt proposes smaller rent hikes for subdivided flats

Owners of subdivided flats will face tighter controls when they raise rents in future.

The government proposed in July a cap of 15 percent on rent hikes after two years to protect tenants living in these units. The Transport and Housing Bureau has proposed lowering the cap to 10 percent.

Officials said they made the change after taking into consideration lawmakers’ concern.

In a document submitted to the Legislative Council, the bureau said the change would offer low-income tenants greater protection.

DAB lawmaker Wilson Or, who chairs a committee currently vetting the bill, welcomed the change.

He said grassroots residents living in subdivided flats have little bargaining power, and the government must act as a gatekeeper to prevent owners from raising rent drastically.

The president of the Hong Kong Owners Club, Diamond Shea, said the change would harm tenants ultimately because it would reduce the supply of subdivided flats.

He said such units are usually located in old buildings and owners had to bear a large amount of maintenance costs.

Shea added if they couldn’t make money from running subdivided flats, they would stop doing so.

Sze Lai-shan from the Society for Community Organisation welcomed the change, calling it an improvement.

But she said even a 10 percent increase could be too much for the grassroots to bear. “We hope, of course, the landlords know those people actually can’t afford such a high level of increase in rent.”

The bill proposes giving tenants priority to renew their leases after two years by two more under a “standard tenancy agreement”, after which the landlord and tenant would be free to negotiate and enter into a new deal.
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Last updated: 2021-09-13 HKT 19:43