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HA Revises Mechanism for Access to Public Housing (Thursday, 28 February 2002)

The Housing Authority has revised the mechanism for determining eligibility for public housing - both for rent and sale - by rationalizing the calculation of the income and asset limits.

The mechanism also allows the Authority greater flexibility to respond to changes in market conditions.

New features of the revised formula include the introduction of differential unit rents for small families to reflect more closely their pattern on housing costs, and the provision of a contingency money to provide for emergency or other long-term plans.

Under the revised formula endorsed today (28 February) by the Authority's Home Ownership Committee (HOC) and Rental Housing Committee (RHC), the income and asset limits for applicants on the Waiting List (WL) for 2002/03 will be reduced by an average of five and ten per cent respectively, effective 1 April 2002. Those for the Home Ownership Scheme will be lowered by 16% and 20%.

In reviewing the mechanism, the Authority has taken a prudent approach to balance the need to ensure that limited housing resources only go to those in genuine need and the call for more generous limits for applicants under the current economic climate, said the HOC Chairman, Mr Walter Chan.

At the same time, latest figures on rental and property prices, interest rates as well as the general price levels will be used to ensure responsiveness in conducting future reviews, he added.

As a result, the income limit for singletons applying for public rental housing will be substantially increased by 16% to $7,200 following various improvement measures including the adoption of differential unit rents in the calculation of housing expenditure, the provision for a 5% contingency money, as well as the exclusion of the expenditure pattern of households comprising solely elderly or non-working members in deriving the non-housing expenditure.

Those for family applicants, however, will be reduced. A typical 4-person family will be eligible for public rental housing if the household income does not exceed $14,800 (net of statutory MPF contributions) per month and its net asset within $380,000 (details refer to chart below). The current income and asset limits for 4-person families are $16,400 and $440,000 respectively.

The RHC Chairman, Mr Ng Shui-lai attributed the reduction to substantial downward adjustments in the private sector rental and household expenditure.

"Special arrangements will be made to minimize the impact of the reduction on the applicants. Family applicants on the WL who have gone through vetting stage by 31 March will be exempted from the application of the new limits, benefiting about 22,000 out of the existing 74,000 households," Mr Ng noted.

He also pointed out that the period for which applicants who have failed the eligibility test are allowed to re-instate their original applications if their income/asset fall within the prescribed limits again will be extended from one to two years. The extension will apply to those who fail the income or asset test from 1 April.

On the HOS, family applicants earning less than $21,000 a month (net of statutory MPF contributions) and whose net asset is worth within $480,000 will be eligible to apply. The current income and asset limits are $25,000 and $600,000 respectively. The limits for singleton applicants will be halved.

Mr Walter Chan explained that the reduction is in line with the sharp adjustments in property prices and mortgage rates over the past year.

"We have also taken the opportunity to adjust the parameters for calculating the HOS income limits. The average mortgage rate of the past 12 months, or the prevailing rate - whichever is higher - will be adopted while a reduced mortgage term of 20 years will be used," Mr Chan added.

He said the revised HOS limits will be applied when a new phase of sale or resale is launched after the moratorium. Mid-year reviews will also be introduced to reflect the latest market situation.

However, in view of the Government's intention to merge the Home Purchase Loan Scheme (operated by the Housing Authority) with the Home Starter Loan Scheme (administered by the Housing Society), the limits and loan amounts for HPLS will remain unchanged, pending Government's decision on the new loan scheme.


Waiting List Income/Asset Limits for 2002/03
Household SizeIncome LimitAsset Limit
1-Person$ 7,200 ($7,579)$190,000
2-Person$10,800 ($11,368)$260,000
3-Person$12,500 ($13,158)$330,000
4-Person$14,800 ($15,579)$380,000
5-Person$17,100 ($18,000)$450,000
6-Person$18,900 ($19,895)$500,000
7-Person$20,400 ($21,474)$540,000
8-Person$21,600 ($22,737)$560,000
9-Person$23,400 ($24,632)$620,000
10-Person and above$25,000 ($26,316)$680,000


HOS Income/Asset Limits for 2002/03
Household SizeIncome LimitAsset Limit
1-Person$10,500 ($11,053)$240,000
2-5 Person$21,000 ($22,105)$480,000
6-Person$21,000 ($22,105)$500,000
7-Person$21,000 ($22,105)$540,000
8-Person$21,600 ($22,737)$560,000
9-Person$23,400 ($24,632)$620,000
10-Person and above$25,000 ($26,316)$680,000

Figures in ( ) denotes the effective income limits should a household be making 5% of its income under the Mandatory Provident Fund (MPF) Scheme as required by the law.
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Last revision date: 28 February 2002