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2.2. Limited effect of well-off tenants policies and Home
Ownership Scheme (HOS) on PRH unit circulation

Over the last few decades, there has been much overlap between the
household incomes of public housing tenants and those of private hous-
ing tenants. As the incomes of a growing number of PRH tenants have
risen significantly since they first moved in, many of them have become
well-off enough to be home owners. The longer their tenancy, the more
likely it is for them to become well-off tenants.

One of the main causes of the ongoing rise in sale prices of private
properties in the 1980s and the 1990s was that many PRH tenants were
not poor at all. Many of them bought private properties to improve their
living conditions or to use them as investments. According to the HA’s
estimates, in the early 1990s, approximately 13% of PRH tenants, or 74,000
households, owned properties in Hong Kong. The private properties owned
by PRH tenants accounted for 11% of total private properties in Hong Kong.
Up to 84% of the private properties owned by PRH tenants were for self-oc-
cupation while only 16% of the properties were for rental. In other words,
some of those registered on the PRH tenants’ list, e.g., the children or par-
ents of the household head, actually lived in a privately-owned property. In
some cases, the whole household actually lived in a private property and
used their PRH flat as a storage facility.
The number of PRH tenants who own private homes has been on an
upward trend. Through a random sample of 2,000 property transactions
between October 1992 and March 1993, an analysis by the Government’s
Rating and Valuation Department found that transactions in which the
buyer is a PRH tenant accounted for 24% of the total. A survey by the HA
in August 1992 found that the percentage of registered household mem-
bers not living in the PRH flats was as high as 18% . 1

However, some “well-off tenants” who already owned private proper-
ties refused to surrender their PRH flats. Owing to shortage of land sup-
ply in the 1980s, under the new public housing policy, PRH tenants were
subject to means tests. If found to be “well-off tenants”, they would be
required to pay double rent. But since the rent would still be cheap, the
tenants would still be unwilling to give up the flats. Instead of being sub-
ject to the tests, some of them even chose to voluntarily pay double rent.

Since the introduction of the “super well-off tenants” policy, the num-
ber of “well-off tenants” has remained stable.

Table 2. Number of PRH households paying additional rent
Rent / Year 1992 1994 1998 2002 2006 2010 2013

1.5 times net rent plus rates 0 10,417 15,656 9,429 14,654 20,560 1,8190

Double net rent plus rates 54,414 35,363 6,448 1,569 2,271 3,204 2,321

Market rent 0 0 1,774 79 16 37 15

Households paying additional rent 54,414 45,780 23,878 11,077 16,941 23,801 20,455
Percentage of all PRH 10% 8% 4% 2% 3% 4% 3%
households
Source: Lau Kwok Yu (2013)

1
Those whose income exceeds the income limit were required to pay double rent but not surrender their public rental flats.

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