Rent controls are necessary!
Realistic to consider rent control
The face of Hong Kong’s property prices and rents rising every year , the people living in private housing rental burden has been getting bigger . According to 2011 census data show that renting private flats with income below the poverty line people , the median rent to income ratio has reached 36% , ie more than half of the poor people renting private flats , monthly there are nearly forty percent of the revenue shall be used to pay rent.
In addition, people with higher incomes are also not immune to the territory of the people renting private housing rent to income ratio median of 26% ( 23% of the value of New York ) . Due to the recent trend of rising rents continued for two years , so the estimated current rent burden heavier than the 2011 situation .
Faced with this situation , many civil society groups in recent years have suggested that the Government must re- implement rent control . However, just published a long strategy consultation document , but simply to ” rent control will lead to rising rents ,” the grounds, rejected the feasibility of implementing rent control .
Poor elderly were often forced eviction
Reference to overseas experience of rent control can have different forms for different groups of people nor consistent , I believe that this policy be easily negated , not responsible.
To discuss the impact of rent control , it should first discuss the different forms of regulation . Generally, rent control can be divided into restrictions on all leases ( whether new or lease ) rent increase ( also known as first -generation rent control ) ; or only limited renewal of the old tenant ‘s rent increase ( also known as second-generation rent control ) , this system is actually security of tenure , usually with security of tenure other measures, such as protection of tenants from eviction , or set a minimum term of the lease .
LTHS will consult existing documents referred to in rent control , but have actually respond to security of tenure policy , but did not mention the old and new leases for control considerations.
If both the old and new leases regulation prohibiting a rent increase or allow only limited rent increases , mainstream economics asserts , when rents than the market price is low, the market will reduce the supply of rent ; But in the short run , reducing the extent of rent , depending on the owners of the building in addition to leasing , but how many other options ( for example, the rent becomes sale , or to recover from live ) , which is required for the actual data demonstrate the problem .
In the long run , rent control can theoretically reduce new housing supply , but high land prices in Hong Kong , property developers oligopoly cases, loss of profits caused by rent control , and perhaps most developers will only result in reduced profits or premium reducing the supply of housing may not have much impact. More importantly , Hong Kong’s housing supply has never been determined by market forces alone , a simple change in the government ‘s housing policy , the impact can mask the impact of rent control .
Now more people , including long- III consultation paper , in fact, talking about the security of tenure . Security of tenure goals, not mainly lower overall rent, but to protect the tenants have a more stable living environment.
At present the grassroots often face a rent increase or eviction plagued Hong Kong Council of Social Service recently conducted survey shows that refrain elderly living in private buildings of poor elderly who live alone , have moved twice in the past five years or more . In fact , faced with eviction rent , nor independent grassroots people face problem, I believe this is also a friend of many middle-class common experience .
Every eviction , in addition to the time and money required for relocation expenses, have to face a lot of problems : children forced to change schools , adults are forced to change jobs , the disintegration of social networks and so on .
In fact, not only forced to move themselves , society will also need to bear the cost eviction : schools need to deal with a series of administrative expenses of the students change schools issue ; bring unemployment due to relocation , change jobs , will also cause social ( temporarily ) loss of labor ; disintegration of social networks also mean less of a community can support each other in the neighborhood .
Owners favorable bargaining position
Tenant without a stable residence to tenants , the community as a whole has a negative effect ; owners business, and if they are willing to pay higher rents for tenants , and no duty to consider the social costs. Implementation of one of the objectives of security of tenure , through the policy is to create a more stable living environment , reduce evictions and negative social effects.
In addition, tenants fear eviction , landlord and tenant bargaining , often enjoying more favorable position . To the tenant , do not want to move it means that there is no other housing options ; right owners, tenants do not renew , he still numerous tenants to choose from. Therefore, the implementation of security of tenure , thus reducing the owners or the monopoly advantage, improve bargaining power of tenants , thus boosting social rents downward.
LTHS consultation document will oppose rent control ( actually refers to security of tenure ) , which will be led to rising rents for new leases ( the owners to be compensated in the future not just the loss of rent ) , will reduce the supply of new rent , so the new tenant or tenant adverse short-term .
However, the objectives of security of tenure is precisely because there is no guarantee the old tenants willing to pay higher rents new tenants evicted , as adverse short-term tenant problems, the idea behind the security of tenure is one of is to help maintain a more stable housing patterns , policies in the long term interests of tenants with short-term tenants re- balanced, is also not without delicious .
Any policies have positive and negative effects , the question is how the different policy objectives and interests of different groups to make trade-offs , I think the Consultative Council consultation document simply rent control made dogmatic negation is not realistic approach.
In the current environment of high rents , tenant and landlord bargaining position , the public housing stability and flexibility of orientation has also been changed, so rent control or security of tenure should be re- incorporated into the housing policy agenda ; government should seriously encompassed rent control measures may bring positive and negative effects, so that the public can make a real in-depth discussion and consensus building .
The author is a member of the shadow LTHS
- Santa Monicans for Renters’ Rights To Hold Annual Membership Convention Sunday (smmirror.com)
- Christie conditionally vetoes bill looking to uphold rent control in senior complexes (nj.com)
- Out of control (thedailystar.net)