Legislative Council Panel on Housing
Special Meeting on 20 October 1999
Review of Residence Qualification for Public Rental Housing
PURPOSE
This paper informs Members of the proposed changes in the residence qualification for public rental housing (PRH) and their impact.
BACKGORUND
2. To apply for PRH through the Waiting List (WL), applicants must satisfy, inter alia, the following eligibility criteria-
- the applicants must be 18 years old or above;
- the total monthly income and net asset value of the applicants and their family members must not exceed the prescribed limits set by the Housing Authority;
- the applicants and their families must not own or co-own any domestic properties during the 24 months prior to the date of registration up to the date of intake; and
- at the time of flat allocation, the majority (at least 51%) of the family members, including the principal applicants, must be residing in Hong Kong (without any conditions of stay) and have at least seven years' residence in Hong Kong. New arrivals who do not satisfy the residence qualification can still be registered on the WL. Flats will be allocated to them once they have met the residence rule and other eligibility criteria. Children born locally are deemed as having complied with the residence requirement provided one of their parents has lived in Hong Kong for seven years.
3. The residence qualification was first introduced in 1979 to safeguard the interest of longer-term residents having regard to the influx of migrants from the Mainland of China at that time. As resources for public housing are limited in relation to demand, there is a need to set priorities for the allocation of PRH flats.
4. As at end August 1999, there were 118,000 applications on the WL, about 38,000 (or 32%) of which did not fulfill the residence qualification. Amongst these applications, about 5,800 applications have been due for flat allocation but were being held up as a result of the residence qualification.
5. All along, the residence qualification has been an effective measure to ensure rational allocation of scarce public housing resources. Nevertheless, with the growing number of legal migrants from the Mainland, there has been increasing concern over the "majority rule" and the preferential treatment given to locally born children only. Many newly arrived families are at the bottom end of the income scale and may be in need of housing assistance. Some of them are however ineligible for PRH because of the way in which the residence requirement is currently applied.
PROPOSED CHANGES
6. In view of the foreseeable increase of PRH supply in the coming years, we are reviewing the residence qualification for PRH in order to meet the housing needs of the new arrivals more effectively and to facilitate their integration into the community. The Chief Executive has also indicated his support to this review in the 1999 Policy Address.
7. We now propose to maintain the seven-year residence rule, but to relax the "majority rule" and to extend the exemption from the residence requirement to cover children born outside Hong Kong. The new arrangements will be as follows:
- All children under the age of 18, regardless of their places of birth, will be deemed as having satisfied the seven-year residence rule provided that one of their parents has lived in Hong Kong for seven years.
- Half (instead of 51%) of the family members (including the principal applicants) will be required to meet the 7-year residence rule upon flat allocation in future. For example,
| Household Size
| Existing Requirement:
51%
| Proposed Requirement:
50%
|
|---|
| 1
| 1
| 1
|
| 2
| 2
| 1
|
| 3
| 2
| 2
|
| 4
| 3
| 2
|
| 5
| 3
| 3
|
| 6
| 4
| 3
|
THE IMPACT
8. If the two proposed changes are implemented, we anticipate that 32,000 or 80% of the existing ineligible PRH applications with new arrivals will satisfy the residence requirement. Amongst them, 5,300 applications will be eligible for flat allocation immediately. The rest will be allocated PRH flats over time provided they meet other eligibility requirement.
9. The proposed changes will not increase the total housing demand so long as the number of new arrivals remains unchanged and continue to be governed by the One-way Permit Scheme. Rather, the proposed changes will advance the PRH demand of new arrivals in the next seven years as our original assumption is that their demand will have emerged seven years after their entry to Hong Kong. Now, on the assumption that 80% of the housing demand from new arrivals will benefit from the proposed changes (based on past trend), we predict an additional PRH demand for 3,800 flats per annum in the coming seven years.
10. To accommodate this additional demand, an extra provision of 5 hectares of land will be required annually in the coming seven years (as 1 hectare of land is expected to produce about 700 units). The Government will make more land available to the Housing Authority to ensure that other housing pledges, including the pledge on reducing the average waiting time for PRH to 3 years by 2005, will not be adversely affected.
11. The advancement of the production of around 3,800 PRH units per annum in the next seven years will have financial implications for the Housing Authority. As the total project investment cost for a new Harmony 2-bedroom PRH flat (39 m2 IFA) is about $0.52 million, the total investment for 3,800 PRH flats per annum is about $2 billion.
WAY FORWARD
12. We believe the proposed changes are appropriate in Hong Kong's present day circumstances. The Housing Authority's Rental Housing Committee will discuss the proposals on 4 November 1999.
Housing Department
October 1999
