PLC Paper No. CB(2) 994

Ref: CB2/BC/7/97

Paper for the House Committee meeting
on 13 February 1998

Report of the Bills Committee on the Housing (Amendment) Bill 1998


This paper reports on the deliberations of the Bills Committee on the Housing (Amendment) Bill 1998.


2. The Housing (Amendment) Ordinance 1997 (the Amendment Ordinance) passed by the Legislative Council on 28 June and gazetted on 30 June 1997 provides that rent adjustment by the Housing Authority (HA) shall be implemented no more frequently than once every three years and no rent adjustment shall cause the overall median rent to income ratio (MRIR) of households living in the HA’s public rental estates to exceed 10%. The Amendment Ordinance shall come into operation on a day to be appointed by the Secretary for Housing.

3. The HA has conducted a detailed assessment of the Amendment Ordinance and has identified the following operational difficulties in implementing it -

  1. it will prevent the HA from varying rents according to the financial circumstances of individual households;

  2. it will require the incomes of households in cottage areas and interim housing to be included in the calculation of the MRIR, contrary to the original intention of the Amendment Ordinance; and

  3. the failure of the Amendment Ordinance to specify clearly how the determination of MRIR is to be made could expose the HA to legal challenges.

The Bill

4. The Bill seeks to address the above difficulties by introducing technical amendments which include -

  1. excluding from the scope of the Amendment Ordinance licence fees charged in respect of cottage areas and interim housing;

  2. excluding from the restriction imposed by the three-year rent review cycle better-off tenants who are required to pay additional or market rent and beneficiaries of the Rent Assistance Scheme; and

  3. providing for a clear definition of the MRIR and allowing the HA to maintain its practice of determining the MRIR of public rental housing (based on sample surveys).

The Bills Committee

5. At the House Committee meeting held on 23 January 1998, Members agreed to form a Bills Committee to study the Bill. The Bills Committee met on 6 February and Hon CHAN Kam-lam was elected chairman. The membership list of the Bills Committee is at the Appendix.

6. The Bills Committee completed its discussion with the Administration and the scrutiny of the Bill in one meeting.

Deliberations of the Bills Committee

7. In general, members support the technical amendments proposed in the Bill. The main deliberations of the Bills Committee are set out in the following paragraphs -

General application of the three-year rent review cycle

8. Members generally share the view that the Administration should ensure that the basic rent should only be increased once every three years. They have asked the Administration to clarify whether better-off tenants will have their rents increased every two years or three years. The Administration clarifies that the amendment in respect of better-off tenants and tenants in temporary financial difficulties paying reduced rents under the Rent Assistance Scheme is to maintain flexibility in dealing with these groups of tenants. Members present all hold the view that the interval between increases in the basic rent for these tenants should be the same as other tenants i.e. three years. The Administration will refer the matter to the HA for policy consideration to make sure that there is no conflict with the spirit of the Amendment Ordinance.

9. As regards tenants filling casual vacancies, members share the view that there is a need to ensure that the same interval of three years between rent increases should be maintained for those tenants. The Administration has informed the Bills Committee that a computer system is being devised to identify those tenants so that they will not have their rent increased in less than three years.

Drafting of section (1A) of the Amendment Ordinance

10. Two members have commented on the lack of clarity of the term "class of land in an estate" in section (1A) of the Amendment Ordinance and the drafting of the section in general. They have suggested that the Administration should re-draft the section. The Administration agrees that the proposal made by the two members is an alternative way of dealing with the matter but what the Administration has done is to try to retain the original wording and to set out the exceptions to address the operational problems so that there will be no misunderstanding of the Administration’s intention. Members accept the Administration’s explanation.


11. The Bills Committee recommends the resumption of the Second Reading debate on the Bill on 25 February 1998.

Advice Sought

12. Members are invited to support the recommendation of the Bills Committee in paragraph 11 above.

Provisional Legislative Council Secretariat
11 February 1998