I was interviewed via email by an Apple Daily reporter last week, who asked for my comments on the housing strategy as laid out in CY Leung’s Policy Address.
This was my reply in full (in Chinese):-
紐約市自1969年以來施行租金穩定法例 (Rent Stabilization Law), 其目的在幫助低收入人士租住居所,一向行之有效,值得梁政府細心研究及仿傚。
The impression I get from the CE’s Policy Address on his housing strategy is that for the longer term, gradual increases in land and housing supply may perhaps serve to slightly loosen the property cartel’s tight grip on the property market; however, supply increase, which cannot happen overnight, is hardly an antidote for quenching the immediate housing thirst.
I am particularly puzzled as to why the CE resists reviving rent control. He kept saying that it might be counter-productive, but fell short of an explanation. People who are against rent control have a theory. They hold the view that rent control would discourage property owners from letting out their rental properties, which would thus put a squeeze on the number of available rental units and force up rents further. My only question is: from a property investor’s standpoint, which would be a preferable option: getting a little less rent or getting no rent at all? It seems to me that those rent control naysayers are just being selfish and totally callous towards the plight of people seeking (but not finding) affordable rental housing and their theory is flawed.
In order to help the low income group to get affordable shelter, the most direct and most rational solution would be to impose rent control targeting medium- to small-size flats and subdivided flats.
New York City (the bastion of capitalism not unlike Hong Kong) has been operating a Rent Stabilization Law since 1969, aiming to help low- to middle-income people get/remain in affordable rental homes. (One condition for the law to be operative is when the city’s rental vacancy rate is less than 5%.) That law may be worth studying.
Link for reference:-
In view of the stratospheric level of property prices and rents now prevalent, giving home renters some sort of protection against obscene rent increases and possible eviction would obviously be a more prudent measure than luring them into the trap of purchasing homes (even subsidized ones) beyond their means at or near a price peak. Longer term, renting should always remain an available alternative to purchasing with appropriate regulations giving tenants security of tenure and protection from unreasonable rent increases demanded by landlords. Obviously, the rent control regulations that served Hong Kong so well pre-1997 were abandoned at the behest of vested interests.