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The myth of "interference in the free market" of rent control

2020-11-03T02:11:33.592Z

On October 3rd, the Research Group on Subdivided House Rent Control held the "Online Public Forum on Research on Subdivided House Rent Control" on Facebook. The first member of the public to speak at the public forum was the owner of the subdivided housing. He mentioned that "the subdivided rent control policy is unfair to the landlord, and the market is a free economy...". The proposition of a free economy such as "small government and big market" seems to be the cornerstone of Hong Kong's long-term business environment, but whether "removal of market restrictions" is sufficient to be the basis for all economic behaviors, and whether "interference in the free market" becomes an evasion of regulation the reason? Hong Kong pays attention to the sub-real estate platform Xue Jiajin



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Author: Contribution

2020-11-03 10:00

Last update date: 2020-11-03 10:00

On October 3rd, the Research Group on Subdivided House Rent Control held the "Online Public Forum on Research on Subdivided House Rent Control" on Facebook.

The first member of the public to speak at the public forum was the owner of the subdivided housing. He mentioned that "the subdivided rent control policy is unfair to the landlord, and the market is a free economy...".

The proposition of a free economy such as "small government and big market" seems to be the cornerstone of Hong Kong's long-term business environment, but whether "removal of market restrictions" is sufficient to be the basis for all economic behaviors, and whether "interference in the free market" becomes an evasion of regulation the reason?

Hong Kong pays attention to the sub-real estate platform Xue Jiajin

The subdivided rent control research working group was established in April this year to study the feasibility and feasible options of subdivided rent control.

(Photo/Photo by Gao Zhongming)

In the past, government officials or landlords regarded subdivided housing as a commodity on the market, and the market price should be determined by the supply and demand in the market; the price of subdivided housing had a market, and the government regarded landlords and tenants as the relationship between suppliers and buyers. Buyers/ Tenants who are dissatisfied with the goods/subdivided houses can change suppliers/owners at any time.

Under the residual model under neoliberalism, the government believes that the market is used to solve welfare problems. Housing problems are not government responsibility, and the government has no role to intervene in market supply and demand.

However, the General Opinions No. 4 (1991) and No. 7 (1997) of the United Nations Committee on Economic, Social and Cultural Rights on the right to adequate housing and forced evictions stated that the government has the responsibility to ensure that citizens are protected by the right to adequate housing. In particular, it protects basic-level households whose wealth is unevenly distributed and affirms that housing is a human rights and basic need.

The housing problem is closely related to the land and housing policies implemented by previous governments. The lack of long-term goals for public housing construction, high land price policies, and laissez-faire subdivision housing management have caused close to 260,000 grassroots households to wait for public housing. The waiting period is reached. In 5.5 years, there were nearly 200,000 people living in sub-building units.

How can the "cause" of the government's housing chaos play no role in the "effect"?

The government has an unshirkable responsibility for the proliferation of subdivided housing. If the government uses the free market to transfer the responsibility of protecting citizens' housing rights, it will be difficult to explain it to the grassroots.

According to the figures released by the Census and Statistics Department earlier, based on the results of the 2016 Population By-census, there are currently about 92,700 subdivided units in Hong Kong, and an average unit is divided into 3.4 subdivided units.

(Photo/Photo by Gao Zhongming)

On the other hand, the free market is not without legal and ethical restrictions. For example, if both parties agree to trade in organs under completely transparent market information, this economic behavior is also "illegal" and "should not".

Quoting the "Special Study on the Violations of Subdivided Housing in Hong Kong" released in September by the Hong Kong Concerned Subdivided Housing Platform, it is estimated that 80% of the subdivided housing is rebuilt in violation of regulations (Note 4).

These include the failure to apply for minor works of the Buildings Department or pass the Building and Fire Protection Ordinance. At the same time, in order to avoid taxation, the landlord restricts or prevents tenants from "printing". Various behaviors have exceeded the legal limit of permission.

Recently, online and newspaper reports on "Uncle with a monthly rent of 1,700 living in a subdivided room of more than 20 square feet" have received a lot of attention, and reports on subdivided houses of "Qize" or "Integrated Kitchen and Toilet" are not uncommon.

In order to make more profits in the free market than renting out the entire unit, the sub-house operators sacrifice the safety, space needs and health of the residents.

This kind of self-interested economic behavior is also immoral, not to mention the social costs to the entire society in terms of building safety, building management, residents' physical and mental health, and extended social service needs.

In conclusion, sub-divided housing should be gradually banned while balancing social interests.

The "free market" is not a shield to obstruct the legal and moral boundaries. Rent control is the first step to correct chaos, effectively reducing social costs and protecting citizens' housing rights.

Will rent control encourage the emergence of rent tyrants?

The second forum of the sub-house rent management group sub-house tenants often hear the "moving sound" of Feng Sister

Many people in the sub-house group forum criticized some group members for operating sub-houses and She Qingyun countered: there are prejudices

Dismantling the myth of the reduction in the supply of subdivided rent control units

Subdivided House Rental Control

Source: hk1

All news articles on 2020-11-03

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