Hong Kong rents will rise for the first time in 13 years and public flats will pain
About 700,000 families living in public housing will have to pay an extra HK$11 to HK157 a month from September 1 as rents rise for the first time in 13 years.

Subsidized Housing Committee chairman Anthony Cheung Bing-leung said the move will see rents rise by an average of 4.68 percent.

Fred Li Wah-ming, a member of the committee, said the rent increases are in line with the rental adjustment mechanism and inflation.

However, Li added the authority may waive two months' rent over the next two years to ease the burden on tenants.

Cheung said public household income increased by about 3 percent from 2007 to last year. Rents in public housing are reviewed once every two years.

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He said rents have to be increased or the authority will be accused of violating the adjustable rent legislation for public housing established in June 2007.

The authority had reduced rents by 11.6 percent in August 2007.

"But to alleviate the impact of increased rents to households, the government may consider relief measures, such as a month of free rent," he said.

Rents in private housing estates increased an average 5.5 percent in the first five months of the year, according to Centaline Properties.

Cheung said the committee will hold a meeting next Thursday following Executive Council approval of any relief measures.

According to the government, the rent increase would bring in extra revenue of HK$500 million in each of the next two years. A one-month rent relief scheme would reduce government revenue by HK$910 million, offsetting the gains from the rent increase.

Federation of Public Housing Estates chairman Wong Kwun questioned why rent increases are based solely on households' average monthly income while the inflation rate is not taken into account.

Under the current law of adjustable rent for public housing, about 2,000 households are sampled each month for average income investigation.

The selected households exclude the "rich group" and those receiving Comprehensive Social Security Assistance.