The Housing Authority (HA) yesterday passed by an overwhelming majority the proposal of an across-the-board 11.6 percent rent cut for the 630,000-strong public housing households including wealthy households.

Since the rent cut hinges on amendment of the Housing Ordinance with regard to the implementation of a flexible rent adjustment mechanism, the HA also passed by majority the proposal to waive public housing rent for February 2007 as an interim concessionary measure, but the wealthy households are excluded.

HA chairman Michael Suen, who is also Secretary for Housing, Planning and Lands, said the Department of Justice had started the drafting work and the government would introduce a bill in the Legislative Council for the amendment of the Housing Ordinance this month.

"We hope this will be passed by the middle of next year in order to get the new adjustment mechanism running as soon as possible," he told the press. But when asked if he would consider further waiving the rent if law amendment was prolonged, he did not give a direct answer but said this was not what people wanted to see.

The HA yesterday held a plenary meeting to discuss the report on the review of public housing rent by an internal ad hoc committee. Noting that the statutory requirement that public housing rent cannot exceed 10 percent of the media-to-rent-ratio, the committee proposed to strike off this by way of amendment of the Housing Ordinance before a flexible adjustment mechanism can come into place.

In future, public housing rent adjustments will be determined by income change of the residents as reflected by an income index.

The committee also proposed cutting public housing rents be cut by 11.6 percent for all households to allow public housing rents to go back to a reasonable starting point, but it is the government's wish that the rent cut shall only come after the law amendment.

Though most HA members agreed to the rent cut proposal, members Shih Wing-ching and Fred Li opposed to "tying up the law amendment and rent cut proposals together as a bundle".

Shih said: "It is anything but a political bargaining to trade the rent cut in exchange of the law amendment. And if we refuse to amend the law, the rent cut will be a very distant thing."

As for the rent waiver, three HA members Fred Li, Chan Kam-lam and Wong Kwun proposed waiver for two to three months instead of just one month. It is because of deflation and the tenants' income has decreased owing to the economic downturn over the past 10 years, they insisted.

The meeting was twice marred by protests by tenants at the public gallery. About half an hour into the meeting, a group of some 20 tenants shouted and raised banners against the law amendment and the meeting only resumed after they were removed by security guards about 10 minutes later. Before the first proposal was put to vote, a tenant also protested but he was whisked away.

(HK Edition 01/18/2007 page6)