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1. Tenants start battle for rent reductions

2. Government set to offload home loans

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1. Tenants start battle for rent reductions
MAGDALEN CHOW, SCMP 13 May 2003

Two tenants of public housing estates yesterday launched a legal battle against the Housing Authority to reduce rents, claiming they have reached an unlawful level and are unaffordable.

Their barristers, Philip Dykes SC and Johannes Chan, told the Court of First Instance the Housing Authority had failed in its duty to keep rents in accordance with the statutory formula in the Housing Ordinance. Mr Dykes told the court the authority had breached its statutory obligation under the ordinance to review public housing estates' rents every three years. The amended ordinance came into effect on March 13, 1998.

The case could affect the 2.12 million people - more than 31 per cent of Hong Kong's population - who live in public housing estates managed by the authority or the Housing Society.

Mr Dykes submitted that Ho Choi-wan, 73, a retired dim sum waitress, and Lam Kin-sum, a security guard, had a legitimate expectation the rents would be fixed at the end of the periodic review at a level not exceeding 10 per cent of median income - a statutory indicator of affordable housing.

Since the second quarter of 2000, the rent-to-median-income ratio had, with the exception of one quarter, exceeded 10 per cent, the court heard.

It stood at 12.1 per cent in the fourth quarter of 2002. However, the authority has repeatedly deferred its review of public housing estate rents, including the Kwai Chung Estate where the two applicants are tenants, the court heard.

"The prevailing condition in the determination of rent in public housing is the affordability of the tenants," Mr Dykes said.

He said that unless a decision not to change rents could be construed as a determination of variation of rent under the ordinance, "the effect would be that the [ordinance would] permit an increase in rent when the economy is good but can be circumvented by freezing the rent when reduction of rent is most needed". Ms Ho and Mr Lam are seeking an order to force the Housing Authority to review the rent levels and to lower them to the statutory benchmark of 10 per cent.

Ms Ho relies on an old age allowance of $705 per month and lives on a monthly contribution of $8,000 from her son, a lorry driver. The rent on her flat is $2,110.

She was not entitled to rent relief as the rent to household income ratio did not exceed 25 per cent.

Mr Lam, a father of three, has a household income of $12,000. "His case is a typical case of a low-income family in public housing," Mr Dykes said.

The hearing continues today before Mr Justice Andrew Chung On-tak.

2. Government set to offload home loans
QUINTON CHAN and JIMMY CHEUNG, SCMP 13 May 2003

The Hong Kong government is to sell its $5 billion worth of civil servants' housing loans to the Hong Kong Mortgage Corporation this month as part of its plan to help balance the budget deficit.

A document submitted to legislators revealed that the authorities would sell the 12,400 loans to the official mortgage company.

The Financial Secretary, Antony Leung Kam-chung, announced in his budget the plan to sell a string of prime government assets over the next five years in a bid to raise $112 billion.

Mr Leung expected the sell-off would raise $21 billion in the current financial year. Finance officials have pointed out that the assets at stake this year include $15 billion in government loans and several tunnels worth $6 billion.

Other assets involved in the next few years are likely to be the remaining government loan portfolio of nearly $23 billion and stakes in the semi-privatised Mass Transit Railway Corporation (MTRC), the wholly owned Kowloon-Canton Railway Corporation (KCRC) and the Airport Authority.

According to the document, the government would continue to keep its legal and statutory rights and continue administering the schemes. Terms and conditions of the loans would not be changed.

Federation of Civil Service Unions president Leung Chau-ting said he was shocked by the proposals. The unionist said the government had not consulted the union on the changes. He said staff would be worried that the mortgage interest rate might surge as a result of the move.

Civil servants who have yet to apply for housing loans would also be concerned they would lose out after the change, he said.

"We do not object to such a move because of the budget deficit. The question is how to enhance monitoring.

"We hope that the government will take good care of our interests and try to be as transparent as possible about how we will be affected,'' he said.

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Scmp,13 May,2003