Opinion | Subdivided Units finally get undivided government attention

By Philip Yeung, A Chinese-Canadian Contrarian and university teacher

My jaws dropped when the Secretary for Transport and Housing Chan Fan tabled the Landlord and Tenant (Consolidation) Amendment Bill 2021.

In it, Chan spelled out that the proposed Bill, if passed by Legco on Wednesday 14 July, will cap rental increase of the notorious Subdivided Units (SDU) at 15% over two years. If the purpose of this policy is to alleviate the plight of the bottom-of-the-barrel tenants, then it leaves me speechless. This rate of increase, if adopted by greedy landlords, will push many financially precarious tenants out into the streets. When asked why he wouldn't tie the rate of increase to rental increases for public housing, Chan hemmed and hawed, to the effect that SDU's belong to the private housing market, whereas Public Housing as its name suggests is in a different domain. He forgets that the primary purpose of the Bill is to alleviate tenant hardships. If they see the 15% cap, they won't applaud the minister, they will curse him instead, as these are terrible times.

Finally, the SDUs have appeared on the government's radar. That is long overdue. But the proposed cap is too little too late.

The minister forgets that rents in public housing range only from $320 to $4260 or an average of about $1700, a far cry from the exorbitant rents paid by SDU tenants. But getting into a cheap public unit takes an average waiting period of 5.8 years, an eternity for those hanging on by their fingertips.

In his official statement, Chan admitted that part of the purpose of the bill is to "ensure that the legislative proposal could not disproportionately infringe on the property rights of the owners." In other words, he must balance the need of guaranteeing rental yields for landlords against affordability for financially drowning tenants. But why 15%? Why not 8%, or a 4% yearly return, which is what most banks pay their best customers for deposits.

In his delicate balancing act, Chan has forgotten his priority: that relieving tenant hardship overrides protecting landlords' profits. After all, they have grown fat in a landlord's market for years. It's time to give renters a break. Tenants get no tax breaks, whereas landlords often do, in the form of generous rates rebates.

These miserable tenants are victims of an economic injustice. Their rental rates per square foot are even higher than super-luxury apartments. A 100 square-foot cubbyhole commands a monthly rental as high as $8000 plus utilities. The poor are paying more per square foot for subhuman accommodation. How can this cruel absurdity be morally justified?

Still, having a cap or control is far better than none. It is an exploitative market that has crossed the pain threshold.

The Bill's one indisputable redeeming feature is that these poor tenants will no longer be subjected to unconscionable overcharges for utility, paying per meter readings instead of at the whim of the landlord who has, in effect, been stealing from the beggar's bowl.

The Bill's most powerful message to the market should be: stop exploiting the vulnerable.

In an ideal world, SDU owners should only be allowed to charge their tenants at per square rates no higher than the average domestic housing units. This will redress the injustice. But don't hold your breath. Hong Kong always tends to nickel-and-dime its poor.

Does the minister know that these tenants are pinching pennies and often go hungry to make rent? A 15% rent hike is like a sledgehammer blow on their fragile existence.

Hiding in this Bill is a cruel irony. In the throes of the pandemic, residential (as well as commercial) rents are coming down. How I wish that SDU rates could fall in tandem with the downward market!

Of the five criteria of good government, catering to housing needs ranks near the top. Here, Hong Kong's records are dismal.

We are the only city in the world that has invented such colorful but disgraceful names to reflect our distorted housing market: coffin places, cage homes, nano-flats, rooftop homes, podium houses, subdivided units and McRefugees for the homeless who shelter in 24-hour McDonald outlets. They are a sharp indictment against government inaction. I wonder if local officials have ever set foot inside one of these hideous places.

To any clear-eyed critic, the SDU proposal appears to be innocent of any knowledge of how the poor live. Chan said that this suggested cap comes from the rental index compiled by the Rating and Valuation Department. If so, these experts are missing something: how can the poorest of the poor be paying the highest rental rates per square foot when they can least afford to?

After last year's vicious political body blow, it is time for Hong Kong to repair and recuperate. Time to turn the government's full attention to livelihood concerns that have been sidelined for so long.

It's time the SAR government grew some teeth in its Accountability System and hold any official to account. A mandarin, whether in housing or healthcare, who lets problems fester is a disservice to Hong Kong and dishonors "one country, two systems".

The views do not necessarily reflect those of DotDotNews.