The Ad Hoc Committee on Review of Domestic Rent Policy has submitted its final recommendations on improving how the Housing Authority fixes and adjusts public housing rent.

Committee chairman Ng Shui-lai said today the committee recommends developing an income index tracking the movement in tenants' household income to determine future rent adjustments.

To ensure the proposed income-based rent adjustment mechanism operates effectively and fairly, the committee also suggests the current rent should be adjusted to provide a new starting point that is considered appropriate and acceptable to the community.

New starting point

Given that the rent of the majority of existing units and the 'best rent' for newly completed units were last reviewed in 1997, the committee suggests adopting a uniform rate of adjustment according to the extent of changes in the income index since 1997, that is, an across-the-board rent reduction of 11.6%.

To ensure proper operation of the new rent adjustment mechanism so that rent can move both upwards and downwards, amendments to the Housing Ordinance to remove the 10% median rent-to-income ratio cap is required, Mr Ng added.

The committee also made recommendations on various aspects of domestic rent policy, like improvements to the calculation of median rent-to-income ratio, and the rent assistance scheme.

The authority will discuss the recommendations on November 27. Subject to the authority's endorsement, an amendment bill will be tabled at the Legislative Council in the first quarter next year.