Housing Subsidy Policy

Under a modified Housing Subsidy Policy introduced in April 1993,
tenants who have lived in public housing for 10 years or more are
required to declare household income at two-yearly intervals. Households
with income exceeding twice the Waiting List Income Limit are required
to pay 1.5 times rent plus rates. Those with income exceeding three times
the Waiting List Income Limit or who choose not to declare income have
to pay double rent plus rates. Since 1987, 379 228 households have been
affected and some 24 500 households are paying extra rent.

The Policy on Safeguarding Rational Allocation of Public Housing
Resources was introduced in June 1996. It requires tenants paying double
rent to declare the net value of their household assets at two-yearly
intervals. In April 1997, some 1 300 households were invited to declare
their household assets. Households whose assets exceed the prevailing
Net Asset Limit - which is 104 times the 1997 Waiting List Income
Limit - will have to pay market rent from April 1998.

In 1996, asset assessments on 16 000 households were completed.
Among them, about 4 000 households had to pay market rent with effect
from April 1997. Another 2 400 households either voluntarily surrendered
their public rental housing flats to the Housing Authority or bought Home
Ownership Scheme flats under a priority arrangement approved under the
policy. Public rental housing flats recovered from these households are
re-allocated to those in genuine need.

Although income limits are one of the eligibility criteria for public rental
housing applicants on the waiting list, hitherto there have been no limits on
assets, other than the restriction on ownership of private domestic
property. To ensure that housing resources are allocated to people more in
need, that is, to those who really cannot afford adequate housing in the
private or subsidised home ownership sectors, limits on both income and
assets will be set for all public housing applicants. Prospective tenants will
be required in 1998, before entry, to undergo comprehensive means tests,
covering both income and net assets. In addition, the government will not
permit public rental tenancies to be passed on automatically from one
generation to the next. Adult members of a family where the principal
tenant and the spouse are both deceased will be required in 1998 to
undergo comprehensive means tests, covering both income and net
assets, before the grant of a new tenancy.

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