Social housing rents to be adjusted this year

Friday, January 28, 2011
Issue 1223, Page 2
Word count: 511
Published in: Macau Daily Times

By Poyi (Natalie) Leung

Starting later this year, the majority of existing social housing residents are expected to pay less monthly rent, based on a new calculation method proposed by the Government.

According to vice-president of the Public Housing Affairs Committee, Leong Keng Seng, under the revised formula, the rents for up to 90 percent of households living in social housing units will remain unchanged or be reduced.

The existing rent ceilings – MOP 2,500 (a four-bedroom unit in the Macau peninsula) and MOP 2,200 (a four-bedroom unit in Taipa) – will also be lifted, so that households whose earnings exceeds the income cap will be subject to heavier rents and may consequently move out, Leong told reporters after a closed-door meeting yesterday.

“The new rents may be even higher than in the private market, which may then make the household decide to give up the social housing unit and move out,” he added.

There are nearly 6,000 families living in social housing units to date.

The new calculation method, Leong disclosed, is expected to make the Government receive MOP 600,000 less in rent per year.

The Housing Bureau said it is not yet certain whether the changes will be promulgated in a chief executive dispatch or administrative regulation, but either way it won’t need to go through the Legislative Assembly.

Leong said the Government “strives to implement [the new formula] within this year”.

According to the proposal of progressive calculation, household income will be calculated by four parts: (1) 2.5 percent for below or on the level of subsistence expenses (based on the minimum subsistence index); (2) 17.5 percent for between the subsistence expenses and the social housing application income cap; (3) 20 percent for earning between MOP 6,000 and MOP 12,000; and (4) 22 percent for earning more than MOP 12,000.

If a one-person household earns MOP 8,999 a month, its new rent will jump from MOP 600 to MOP 1,253.80; if it earns MOP 9,001 a month, the rent will increase from MOP 1,200 to MOP 1,254.20.

However, if this household’s monthly income is MOP 3,000, it will only need to pay MOP 129 in rent after the changes come into effect, down significantly from MOP 450 at present.

Leong said the committee members generally supported the new formula, and deem that it is “more advanced and scientific, and can better fulfill the principle of fairness as well as meet the social demand nowadays”.

According to the exit mechanism introduced in August 2009, social housing households whose income exceeds the ceilings for three consecutive years, or is more than twice the upper limit for two consecutive years, may have their housing contracts unilaterally terminated by the Housing Bureau when the contracts expire.

Leong explained that the existing calculation method does not fully take into consideration the minimum subsistence index, can lead to “unreasonable increase” in rents and is also unable to charge higher income households higher rents.

In the 2011 Policy Address, Chief Executive Fernando Chui Sai On announced that all social housing households would be exempt from paying rents between January and March.

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