The Impact of Rent Increase on the Transportation Industry in Hong Kong: Government Subsidies and its Consequences

A certain proportion of private cars are parked in the paid parking lot in Lijing. (Photo by Li Zhiyong)

Under the epidemic situation, the government has reduced the rent of short-term leases of government land. The toll parking lot alone has cost the authorities 1.8 billion yuan in public funds, but the relief measures are not precise. Landlords who undertake short-term leases from the government as fee-paying parking lots can still receive a 50% rent discount until the end of this year. After the negotiation, the rent was still increased by 10%. The industry pointed out that at least more than a thousand commercial vehicles were affected, commercial vehicle parking spaces are decreasing day by day, law enforcement agencies are constantly copying license plates, and there is no clause in the short-term lease agreement requiring the owner and tenant to tide over the difficulties, questioning the government’s use of public funds to “subsidize” the owner in disguise, The rental increase of car parks has made a lot of money, which has hit the transportation business and even weakened the competitiveness of Hong Kong’s logistics industry.

The transportation industry hit hard by the epidemic, even if the business is “cleared”, container trucks and non-franchised buses are required to park and pay full parking fees. The industry rents the open-air toll parking lot on the land under short-term lease from the government. The monthly rent for each tourist bus is more than 3,200 yuan, and the monthly rent for a container truck is about 8,000 yuan. The industry was dissatisfied with the owner’s request for a rent increase of up to 50% while still benefiting from the rent reduction, and formed the “Transportation Industry Alliance” to complain to the government about the oppression of tenants by the owner.

4 sheets of beef jerky baked on the street for one night

Deng Ziqiang, vice chairman of the Public Bus Industry Association, said that the owner is only a “secondary landlord” and the owner is the government, so the subsidies provided by the government cannot be monopolized. Still insisting on a 10% rent increase, the industry can only “hard food”. He pointed out that the number of parking spaces for commercial vehicles is decreasing day by day, the government continues to reclaim the land for other uses, and the law enforcement agencies continue to issue tickets for illegal parking. , and said: “The government subsidizes them with public funds, but they are not strictly required to give some tenants. During the epidemic, the rent was reduced by 22% at most, but they tightened the subsidy by 50% to 75%.”

After receiving government subsidies, the rent will be increased by 50%

The Deng Pan government is taking this matter seriously and urging the owners to freeze the rent during the subsidy period. They should also review their rent increase and operating rationale, and account for the amount of subsidy they have received. He also pointed out that the current owner still prefers to increase the rent by 50% with the subsidy. Once the government stops the reduction next year, the owner may increase the increase to more than double. You don’t even have to do a single transportation business!”

The logistics industry, which was also hit hard by the epidemic, has yet to recover. Lin Haida, chairman of the Hong Kong Container Vehicle Owners Association, added that there are 10 parking lots involved in the increase in rent, mainly in Kwai Chung and Tsing Yi. Each parking lot ranges from dozens to 300 vehicles, and more than 1,000 commercial vehicles are affected. He said frankly that there are not enough parking spaces for container trucks at present, and the parking fee for each vehicle with a trailer is about 8,000 yuan. However, the cargo throughput in Hong Kong continues to decline. In May, both imports and exports fell by 15%. In the 1990s, Hong Kong’s container throughput ranked first in the world First, even though the parking fee reached about 10,000 yuan per month at that time, it was less than 10% of the cost, so the industry was able to cope. However, Lam lamented that due to the impact of the epidemic and the vigorous development of ports in the Mainland, Hong Kong’s competitiveness is no longer what it used to be.

The business plummeted and the container trucks had no choice but to leave

The turnover of container trucks has also fallen sharply. In the 1990s, the monthly business of each vehicle could reach 70,000 yuan, but now it has dropped to only about 40,000 yuan. Taking into account factors such as inflation, labor and fuel costs, the overall decline has exceeded half. The cost of parking is also close to 20% of the turnover. If the rent of the parking lot is allowed to increase, it will only intensify the wave of closures, and the rent of commercial vehicles parked in public housing is fully reduced. I don’t understand why the Lands Department only reduces the rent for the owners. He lamented that many container truck industries have withdrawn recently, and said frankly: “A trailer worth 100,000 yuan that has been used for 5 years, they paid 8,000 yuan and sold it.” If the government is still indifferent, the shipping center that Hong Kong is proud of The status will only plummet, and I am afraid that it will fall out of the top 10 within a few years.

In fact, the Housing Authority has earlier extended the 50% reduction in rent provided to qualified non-residential tenants, including car park parking space users who rent commercial vehicles on a monthly basis, until December 31, which is expected to reduce by about 496 million yuan rental income. In response, a spokesman for the Development Bureau pointed out that for a total of 45 months from April 2020 to December 2023, the total rent reduction and exemption will be about 1.8 billion, covering about 190 car park leases. These short-term leases do not include price control clauses. Considering that rent relief is a time-limited relief measure, and merchants face different operating conditions, it is not appropriate for the government to add clauses to the leases to rigidly stipulate how car park operators should use the relief amount. The government encourages beneficiary enterprises to share rent relief with customers as much as possible as operating conditions permit, and the arrangement after the relief period will be reviewed in due course.Reporter Lin Jianping

Commercial vehicles must pay full parking fees even if they are stopped during the epidemic.

The throughput of containers in Hong Kong has been declining steadily.

The major alliance of the transportation industry wrote to the Legislative Council earlier to oppose the increase in the rent of the parking lot with subsidies.

2023-07-15 21:45:00
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