Legco Approves Rent Controls For Subdivided Flats

The Legislative Council on Wednesday passed a bill that will limit rent hikes of subdivided flats.

Under the new law, rent hikes will be capped at 10 percent at the end of a two-year contract.

Tenants will then be given priority to renew the lease for another two years.

While a majority of lawmakers supported the changes, they urged the government to do more to control the initial rental level of subdivided flats, to prevent landlords from raising rents substantially before the amended law takes effect.

The chairman of the committee that vetted the bill, DAB lawmaker Vincent Cheng, said the passage of the bill is an important step towards protecting grassroots tenants.

"More than 200,000 people are living in these very badly conditioned subdivided flats, especially in the old buildings. So we have this bill to have more protection for those people," he said.

Secretary for Transport and Housing Frank Chan said the approved measures struck a balance between offering protection to tenants and protecting the rights of landlords.

But he said the government could not regulate rents under the first lease.

"The rent of a subdivided flat is affected by many factors. Even for subdivided flats in the same unit, their rental levels may vary according to a whole basket of factors," he said.

"Before rental data in the subdivided flat market is available, the administration considers it unfeasible at this stage to formulate an objective and reasonable mechanism for the purpose of fairly determining the maximum initial rent."

At a housing panel meeting earlier in the day, Chan was asked when the government could achieve its target of shortening the waiting time for a public flat to three years.

Currently, the average waiting time is 5.8 years.

He said the government could achieve the target in about 10 to 20 years.