Lobbying for rent regulation in Hong Kong: Rental market politics and framing strategies

Introduction

Difficulties in accessing owner-occupied housing in the post-Global Financial Crisis (GFC) era has been associated with growing demand for private renting across different cities. Recent studies demonstrate that home ownership rates among younger households have dropped most substantially in more financialised housing systems, such as the UK and Denmark, which were characterised by more lenient mortgage lending practices before the GFC (Lennartz et al., 2016: 833). Tightening of mortgage lending criteria after the GFC has restricted housing ownership among younger adults, who have become more reliant on the private rental sector, especially in more individualistic societies where inter-generational co-residence is less favoured (Lennartz et al., 2016: 825).

Housing financialisation has also been associated with the growth in short-term investment behaviour in the private rental sector. In England, for example, the rental sector has been shaped by the expanding market of ‘buy-to-let’ (BTL) mortgages since the late 1990s, which has provided relatively cheap and easy-to-secure mortgages to private landlords (Kemp, 2015: 607–608). Although the GFC led to momentary collapse of the BTL lending market, quantitative easing measures and continuously low interest rates reinforced interest in rental investment for capital gains (Kemp, 2015: 613). Similar trends have been observed in places such as Australia, where there has been considerable investment in properties commanding mid-market rents, with perceived high prospects of capital gains (Hulse and Yates, 2017: 264).

Investors’ interest in short-term capital gains in the rental market, together with growing demand for rental accommodation, has been accompanied by rising rents in many places. This has contributed to vigorous debates about whether and how the private rental sector ought to be regulated. Indeed, policy debates and academic research on rent regulation have existed for a long time (e.g. Haffner et al., 2008). Yet, there is often a lack of conclusive evidence about the relationship between regulation and supply in the rental market, thus proposals for regulation often encounter substantial opposition (Rugg and Rhodes, 2003: 943). Even in places such as Germany, which is characterised by a more established culture of private renting, there are conflicting perspectives between policymakers and researchers about the effects of setting a rental brake (Kholodilin et al., 2016).

Compared with European countries, the academic and policy communities in Hong Kong have conventionally paid little attention to the private rental sector. As argued by some local researchers, the private rental sector has been neglected by the government in the formulation of housing policy (La Grange and Pretorius, 2002: 734), while academic research on the sector is almost non-existent (Yip and La Grange, 2006: 996). There have been several studies on rent regulation, although these date back to the 1970s (e.g. Bradbrook, 1977).

More attention has been given to the sector since the early 2010s, mainly because of the proliferation of poor-quality rental units in the low-end rental market, as well as rapid rent increases. Grassroots lobbying groups have called for tighter regulation of the private rental sector, which has been reflected in the review of the Long Term Housing Strategy (LTHS) from 2013 to 2014. Although previous governments have tended to avoid the topic of rent regulation, it was explicitly included in the LTHS consultation document (HKSAR Government, 2013: para. 5.41–5.45).

Despite the growing visibility of rent regulation in media and public discourses, there has been scarce academic research on the dynamics of the rent regulation debate in Hong Kong. This paper seeks to address the gap in knowledge, especially by situating recent policy debates within the context of more longstanding debates, especially those dating back to the 1990s and 2000s, when the private rental sector was deregulated through removal of rent control and security of tenure.

A brief history of rent regulation in Hong Kong

Rent control was first introduced in Hong Kong in 1921, as a result of housing shortages caused by a large influx of refugees from mainland China (Bradbrook, 1977). After the Second World War, the Landlord and Tenant Ordinance 1947 was enacted, which specified permissible rent increases. The most critical piece of legislation came in the form of the Landlord and Tenant (Consolidation) Ordinance 1973, which involved consolidation of the Landlord and Tenant Ordinance and the Rent Increases (Domestic Premises) Control Ordinance.

Apart from control over rent increases, the legislation also provided security of tenure, which protected tenants from unjust evictions. Landlords were restricted from repossessing their properties at the end of the tenancy period, if the tenants were willing to pay the prevailing market rent. The Consolidation Ordinance was amended multiple times throughout the 1970s and 1980s to raise controlled rents progressively. During this time, landlord groups were increasingly vocal about deregulating the private rented sector through abolishing rent control.

The first serious attempt to develop a timetable for deregulation occurred in May 1992, when the government formally announced the Landlord and Tenant (Consolidation) (Amendment) Bill, which proposed the phasing out of rent control by the end of 1994. At that point in time, the existing Ordinance had already permitted a 30% rental increase every two years (or up to a specified rent ‘ceiling’, expressed as a percentage of the prevailing market rent). Phasing out would mainly be achieved through gradually raising the specified rent ‘ceiling’, from 70% of the prevailing market rent in 1992, to 92.5% of the prevailing market rent in 1994.

In the months that followed, there were major debates about the pros and cons of deregulation and possible social consequences. An ad hoc group was set up to study the Bill, which consisted of members of the Legislative Council. The ad hoc group held multiple meetings to discuss the Bill and to consider submissions from concerned groups and individuals. As noted by the convenor of the group, the views of the public were divided, and no clear consensus was achieved (LegCo, 1993: 4207).

In December 1992, the government proposed to defer abolition of rent control for another two years until 1996. After further debates in the Legislative Council, the Landlord and Tenant (Consolidation) (Amendment) Bill was eventually passed in June 1993. Several months before the intended abolition of rent control in 1996, councillors who were against deregulation proposed a further delay of the process, which resulted in delaying abolition of rent control until 1998.

In the early 2000s, Hong Kong experienced a weak property market and falling rents, which provided an opportunity window for the government to propose further deregulation. The Secretary for Housing, Planning and Lands announced in November 2002 that a review of the Landlord and Tenant (Consolidation) Ordinance would be conducted, with the intention of enabling the private rental market to operate more freely. A Consultation Paper was released in January 2003, which proposed relaxing security of tenure provisions for domestic tenancies under the Ordinance.

The standard term of a tenancy agreement in Hong Kong is two years – one year fixed term, and a break clause after one year with one or two months’ prior notice. The government’s preferred option in 2003 was to remove security of tenure for all tenancies, irrespective of the rateable values of the properties, or whether they were new or existing tenancies (HKSAR Government, 2003: para. 10–12). Previously, tenants were protected by Part IV of the Ordinance, which restricted landlords from repossessing their properties even at the end of the tenancy period, if the tenants were willing to pay the prevailing market rent. In the event that landlords wished to repossess their leased premises because of redevelopment, self-occupation or non-payment of rent, they would have to apply for permission from the Lands Tribunal. This statutory right to renew tenancy at prevailing market rent was removed, however, when the Landlord and Tenant (Consolidation) (Amendment) Bill was put to the vote in June 2004, and the majority of lawmakers voted in favour of the bill (LegCo, 2004).

Nature of the private rental sector since the 2000s

From 2001 to 2011, the number of households renting their accommodation in the private sector increased from around 320,000 households to 346,000 households. By 2016, the figure had increased to around 433,000 households (Census and Statistics Department (CSD), 2016). In the past, the percentage share of private rental households among all households in Hong Kong had remained relatively stable at around 14% to 15%, but in 2016, the percentage share had increased slightly to around 17%.

One of the biggest challenges of studying the private rental sector in Hong Kong is that relatively little data or research exist to draw from (La Grange and Pretorius, 2002: 722). Official statistical data is either unavailable or incomprehensive. On one hand, there are no landlord surveys, meaning that there is scarce information on the types of landlords and their motivations for renting out their properties. On the other hand, although the Rating and Valuation Department (RVD) provides statistics on changes in the total stock of private domestic flats, these figures do not differentiate between flats that are owner-occupied and those that are rental flats.

Nevertheless, some insights can be gleaned from data on the proportion of new completions that are leased out. Prior to 2005, the proportion of lettings among new completions remained relatively low, ranging from around 10% to 15%. For example, the proportion in 2005 was 12.7% (RVD, 2006). Since 2006, however, the proportion of lettings among new completions rose considerably to more than 30%, such as reaching more than 45% in 2012 (RVD, 2013). Although these data represent new rental properties only, they provide a degree of evidence of growing demand for private renting versus owner-occupation.

It appears that demand for private renting has been particularly strong for small-sized rental flats. According to the Rating and Valuation Department, private domestic properties are classified into five different size categories (Class A to E). The rental price index for Class A flats (saleable area less than 40 m²) has more than doubled in ten years, from 90.1 in 2006 to 184.8 in 2016 (RVD, 2017). Rent increases have exceeded wage increases: in the ten-year period from 2006 to 2016, median household income had only increased by 45% (CSD, 2016).

Growing demand for small-sized flats can be partly explained by growth in the number of low-income immigrant households from mainland China. Immigrant households are not eligible for public rental housing, until not less than half of the family members have resided in Hong Kong for seven years or more. If they are not able to afford home ownership, then it is likely that their housing needs would be met through private renting. According to the Census and Statistics Department, from 1996 to 2001, the number of domestic households with PMRs (Persons from the Mainland having resided in Hong Kong for less than 7 years) increased from 103,784 to 145,702 households, representing an increase of 40% (CSD, 2006). From 2001 to 2006, the growth in households with PMRs was not as big, but there was still a moderate increase from 145,702 to 148,617 households (CSD, 2012).

Indeed, rental demand from lower-income groups can be gauged by the growing length of the public rental housing waiting list, which has doubled from around 100,000 applicants in 2001 to around 200,000 applicants in 2011. Since 2015, the number of waiting list applicants has exceeded 280,000 (Hong Kong Housing Authority (HKHA), 2015). Although the Hong Kong government has maintained its commitment to build public rental housing, supply of public housing has not been fast enough to address the backlog of demand from low-income households, with only an annual average completion of around 17,500 public rental flats during the ten-year period from 2001 to 2011.

The review above is constrained by sparsity of data on the private rental sector; nevertheless, it sets the context for analysing the development of rent regulation debates in Hong Kong over the last two decades. The next section discusses theories on hybrid regimes and their relevance to the interpretation of power relations in the private rental sector in Hong Kong. This is followed by elaboration of key concepts from the framing literature, and examples of how framing theories have been applied to housing issues.

Power relations and framing theories

Previous research in democratic countries has adopted the notions of corporatist and non-corporatist power relations to interpret the dynamics of the private rental market (Kemeny, 2006). These analyses suggest that corporatist power structures are more likely to have an integrated rental market, characterised by more integration between non-profit renting and the open rental market, while non-corporatist regimes tend to have a dualist rental market, characterised by a weakly regulated market alongside a means-tested public renting sector (Kemeny, 2006: 2).

However, these theories may be less applicable to a non-democratic society such as Hong Kong, which can be characterised as a form of ‘hybrid regime’ (Fong, 2013). From the colonial era to the post-colonial era, Hong Kong’s political system has exhibited a combination of democratic and authoritarian elements – some (but not all) of the seats in the Legislative Council are chosen through popular election, while the Chief Executive is selected through an election committee rather than universal suffrage. Theories on hybrid regimes suggest that there is an incentive for semi-authoritarian incumbents to develop strong governance coalitions with business elites (Levitsky and Way, 2010), in order to sustain their control in the midst of opposition forces, which often results in preferential treatment for business interests.

This echoes recent findings in the housing literature, which demonstrate how powerful business groups and industry lobbyists can deploy subtle and overt tactics to influence policies in their favour (Gurran and Phibbs, 2015; Jacobs, 2015). Observations in the policy analysis literature also suggest that policy makers are motivated to develop policies that benefit advantaged groups, whose positive social constructions make it easy for them to get their issues on legislative agendas (Schneider and Ingram, 1993: 337).

The existence of strong government–business coalitions helps explain why a hybrid regime can press through its policies with relative ease. In the case of Hong Kong, these coalitions were less challenged in earlier days, when business elites were perceived as benign leaders and mediators in the community; yet, the credibility of business elites has weakened in recent years, especially under an increasingly active civil society and the erosion of hegemonic discourses (Fong, 2013: 874). This changing balance of power has resulted in the prevalence of state–society conflicts across different areas of public policy.

Theories on power relations in hybrid regimes can be complemented by theories on social constructions, especially framing theories in the sociological literature. The concept of a ‘frame’ refers to the ‘schemata of interpretation’ which help individuals organise social reality and make sense of their experiences and actions (Benford and Snow, 2000: 614). ‘Framing’ refers to the processes of generating frames, in other words, the processes of constructing the meaning of occurrences within the social world (Benford and Snow, 2000: 614).

Framing researchers have highlighted several types of frames in policymaking processes. The first type is diagnostic frames, meaning frames which ‘diagnose’ the nature of a problem, such as frames which identify the victims of injustice, the causes of a problem and the agents to blame (Benford and Snow, 2000). The second type is prognostic frames, meaning frames which articulate the possible strategies for rectifying a problem. These can include ‘solution-oriented’ prognostic frames, which advocate and justify the efficacy of particular solutions to a problem, as well as ‘tactical’ prognostic frames (Noy, 2009), which specify how to make particular policies happen. The third type is motivational frames, meaning frames which construct the urgency of adopting particular policies, which provides the motives for actors to engage in collective action efforts and sustains their participation (Benford and Snow, 2000: 617).

Frames are not generated within a vacuum, but instead, frame articulators tend to appeal to a range of resources to construct and legitimise their interpretation of social reality. As Ernste (2012) points out, when actors appeal to specific frames, this involves invoking a combination of ‘values, norms, experiences, facts, interests, preferences, theories and cultures’ (p. 93). Furthermore, the credibility of articulated frames also shapes the extent to which such frames are resonant among the wider policy community. Frame articulators may strategically augment the credibility of their framings, through ongoing efforts of frame bridging, amplification, extension and transformation (Benford and Snow, 2000: 624–625).

Frame bridging refers to linking of two or more unconnected but congruent frames, such as linking to frames propagated by other individuals, groups, or social movements. Frame amplification refers to clarification or invigoration of existing beliefs and values, by tapping into more broadly accepted core values. Frame extension refers to depicting certain frames as extending beyond their primary adherents, to include issues and concerns that are presumably important to potential adherents. Frame transformation refers to attempts to modify old understandings and meanings and to generate new ones.

There are also additional processes that influence the dynamics of framing contests, including frame disputes, which refers to internal disagreements regarding how an issue is framed, as well as dialectic between frames and collective action events, which refers to how collective action events may alter the beliefs which underpin the frames of actors (Benford and Snow, 2000: 625).

Framing concepts have previously been applied to the analysis of policy debates on homelessness (Cress and Snow, 2000; Noy, 2009; Rochefort and Cobb, 1992). As illustrated by Rochefort and Cobb (1992), even the apparently straightforward phenomenon of homelessness is not a ‘given’, but is shaped by divergent diagnostic framings of the nature and causes of the problem, and thus divergent prognostic framings. For example, some politicians argue that homelessness is a matter of choice or personal responsibility. By framing the homeless as ‘undeserving’ or ‘unworthy’ of public sympathy, they justify withdrawal of government support for homeless programmes (Rochefort and Cobb, 1992: 60).

Despite the relevance of framing theories to housing policy analysis, there are few examples of their application to housing issues beyond homelessness. Thus, this paper seeks to apply framing theories to analyse the trajectory of the rent regulation debate in Hong Kong. The next section describes the research methodology for the study.

Research methodology

A combination of data collection methods were used in this study, including secondary statistical data, documentary data and in-depth interview data. Secondary data from the Census and Statistics Department and the Rating and Valuation Department have been analysed to establish the nature of the private rental sector in Hong Kong. In order to trace the history of rent regulation debates in Hong Kong, a range of policy documents were examined, including minutes of Legislative Council meetings, consultation documents and reports, and policy papers prepared by government departments. News reports on rent regulation debates were also examined to identify salient framings.

The time period for analysis extends across 15 years, from 1992 to 2017. As mentioned in the introduction and brief history, analysis of the rent regulation debate in Hong Kong includes several key moments: (i) 1992–1998, related to removal of rent control; (ii) 2002–2004, related to removal of security of tenure; and (iii) post-2010, when tightening of rent regulation was debated, in the context of a proliferation of poor-quality rental units and rapidly rising rents. Debates in the post-2010 period resonate with global trends, since the property market in Hong Kong also experienced speculative investment under the low interest rate environment of the post-GFC era. The key feature which distiguishes Hong Kong from other places is that there were relatively ambitious plans to build around 20,000 public rental flats per year, following the review of the Long Term Housing Strategy in 2013–2014.

All documentary data were analysed by adopting the analytical tools in the framing literature, paying attention to the diagnostic, prognostic and motivational frames (Benford and Snow, 2000) deployed by different actors, and the range of ‘values, norms, experiences, facts, interests, preferences, theories and cultures’ (Ernste, 2012: 93) that actors appealed to in their attempts to establish the credibility of their claims.

In addition, the study involved in-depth interviews with key policy actors, including legislative councillors and representatives of lobbying groups. Two legislative councillors were invited for interview, based on their understanding of the tensions between landlord and tenant interests, and their familiarity with debates on rent regulation legislation. Thirteen actors from lobbying groups were invited for interview, and a total of six interviews were completed. The lobbying groups included tenant advocacy groups, as well as low-income advocacy groups representing the broad range of interests of low-income households.

Among these grassroots lobbying groups, some of them have been established for over 40 years, while some have only emerged in the post-2010s. Interviewing a mix of well-established and recently established groups ensures that there are both interviewees who understand the history of rent regulation in the city, as well as interviewees who are more focused on recent housing problems.

Landlords in Hong Kong are represented by a handful of homeowner groups. These are mainly advisory groups, which provide legal and other property-related information to support homeowners. The voices of these groups tend to be adequately represented by pro-market legislative councillors, who are closely aligned with policy actors within the market-oriented government of Hong Kong. Thus, this study focused on interviewing tenant groups and low-income advocacy groups, while landlord groups were not interviewed.

There were some difficulties in gaining access to relevant actors; on one hand, some grassroots groups were more focused on service delivery, and were less acquainted with policymaking processes, especially processes that occurred in past decades. On the other hand, some groups were only active at the time of the review of the housing strategy (i.e. 2013–2014), and were no longer operational or were unavailable for interview. Furthermore, although there appears to be a significant number of grassroots groups, some of these groups are actually represented by the same actors, which explains the relatively small number of interviewees.

Nevertheless, the study focused on securing interviews with those key actors who were consistently active in policy deliberation processes, and who had a good grasp of the evolvement of rent regulation debates in the city. The interview data were also triangulated with the documentary data to achieve a more comprehensive interpretation of policymaking processes and outcomes.

Analysing power relations within the rental market

Back in the 1990s, government officials framed removal of rent control as a more ‘even-handed’ approach which balances the interests of tenants and landlords (LegCo, 1993: 4227). These beliefs were echoed especially by legislative councillors from the Liberal Party:

Many landlords affected by rent controls think that the government is depriving them of their right to earn a reasonable return and they are subsidizing their tenants indefinitely. (LegCo, 1993: 4213)

While such perspectives are quite typical of landlords anywhere, they also reflect socio-economic conditions in Hong Kong at the time. During the change of administration in 1997, the government committed itself to an ambitious housing construction programme, as epitomised in the 1998 Long Term Housing Strategy, which pledged to supply 85,000 units per year, 50,000 of which would be public rental housing. In the context of anticipated increase in supply, there was a much more credible basis for opponents of rent control to dismiss the need for regulation, especially through appealing to supply and demand theories.

One might have expected a shift in perspective in the early 2010s, when major doubts were raised about the balance between supply and demand. Supply of both public and private housing had not been able to keep up with growing demand, resulting in exorbitant increases in housing rents and prices. In response to these changing conditions, there was much stronger lobbying for rent control, compared with the 2000s. Yet, despite the growing visibility of grassroots lobbying groups, the bargaining power of private tenants remained relatively weak compared with that of property owners:

These people [private tenants] constitute a small group … we always say that the private rental sector is not large, but the low-end of the private rental sector is even smaller … so the government will definitely focus on homeowners … that group is more important than private tenants. (Interviewee 2, tenants group)

Thus, despite fluctuating socio-economic conditions over the last two decades, it seems that the balance of power within the rental market in Hong Kong has not shifted much. Furthermore, apart from the fundamental conflict of interest between landlords and tenants, almost all of the interviewees concurred that political leadership was a key factor in explaining the lack of policy change over the last two decades. By political leadership, they referred primarily to the political stance of the Chief Executive, and by implication, top government officials who are directly accountable to the Chief Executive. As a member of the Legislative Council observed:

In past years, the government has been more of an advocate of free-market economics … the truth is that many key actors within the government are supporters of the free market. (Interviewee 7, legislative councillor)

In addition, the political stance of the government tends to be fortified by the balance of power within the Legislative Council, which has long been dominated by so-called pro-establishment councillors. These pro-establishment councillors have a tendency to support the government’s stance on most public policy issues, and together with those councillors representing market interests, are capable of resisting rent control proposals through majority vote. In other words, unless the government relaxes its stance and sides with advocates of rent control, it is very unlikely for any changes to occur within this policymaking context:

In terms of what can be practically done now regarding rent control … I am not optimistic at all. To be honest, if we want to pass any amendments through the Legislative Council, the timescale we are talking about is by years, not months. (Interviewee 2, tenants group)

Diagnostic frames: Convergent perceptions of the causes of rental affordability problems

While it is true that divergent interests between landlords and tenants help explain their conflict over rent control, the evidence suggests that political differences alone cannot fully explain the trajectory of the rent regulation debate. In particular, there has been apparent convergence of perceptions between actors on both sides of the debate, especially regarding their diagnosis of rental market problems. Advocates and opponents generally agree that undersupply of public rental housing is the primary cause of the crisis in the low-end private rental sector.

It may not be a surprise that legislative councillors in support of grassroots tenants have pressured the government to increase supply of public rental housing – what is interesting is the convergence of diagnostic framings between pro-grassroots councillors and councillors with more liberal economic perspectives. As one of the members from the Liberal Party expressed back in the 1990s:

The crux of the housing problem is the shortage of supply, and its long term solution lies in the allocation of more land and speeding up the housing developments. (LegCo, 1997: 134)

Despite similar diagnosis of rental affordability problems, there is disagreement between advocates and opponents about the desirability of relying on public housing supply as the only solution. In particular, actors engaged in selective assessments of the government’s progress in delivering public housing, depending on whether or not they favoured rent control as a supplementary measure alongside public housing supply. On one hand, rent control opponents tended to paint a positive picture of housing delivery:

As the housing construction programme in the public sector is making good progress, the waiting period has now been shortened to five years. It is expected that the target of reducing the waiting period to three years can be reached by the end of 2003. (LegCo, 2000: 1022)

Rent control advocates, on the other hand, have repeatedly questioned the ability of the government to deliver public housing on time. These actors appealed to their observations of past trends – suggesting that public housing supply has been highly uncertain over the years:

The government alleges that, on average, 40,000 rental housing units are built each year. The number of units finished in the past few years, however, are lower than this target. In 1995, only some 20,000 units were finished. This figure is far below the original projection. (LegCo, 1997: 125)

Uncertainties about future supply of public housing, and appeals to past experiences of shortfalls in housing delivery, have weakened the credibility of those who claim that public housing can be relied upon as the only solution for rental affordability problems. This helps explain why advocacy groups have insisted on the need for tightened rent regulation, alongside the long-term solution of public housing supply.

Prognostic frames: Divergent perceptions of the consequences of tightened regulation

Recurring deadlocks in the debate can be further understood as divergent framings of the possible consequences if rent control is implemented as one of the solutions. Opponents of rent control, including the government, tend to amplify their concerns based on the perceived unintended effects of rent regulation:

… we are concerned that introducing additional regulation for the rental market hastily amidst the present tight housing supply situation may discourage landlords from renting out their premises, thereby reducing supply of flats. (LegCo, 2014a: 2804)

Supporters of rent control, on the other hand, tend to discredit the government’s claims by appealing to intuitive theories about landlord behaviour:

… some members were not convinced and considered that it would be irrational for property owners to withhold their properties from letting even if rental control was introduced, as it would mean forgoing rental income. (LegCo, 2014b: para. 10)

Given that actors on both sides of the debate have been constructing the hypothetical consequences of implementing rent control, neither side has much in the way of concrete facts to boost the credibility of their theories. As one of the interviewees remarked, the inability to visualise policy consequences is one of the key reasons behind this intractable frame conflict:

It’s like the parable of the blind men and the elephant … everyone is just saying what they believe to be true – and that includes advocacy groups – what they say may not always be right. (Interviewee 3, low-income advocacy group)

The comment above appears to suggest that the availability of more concrete data or projection figures could facilitate the unlocking of policy deadlocks. Yet, historical experiences also reveal that any available data are open to selective interpretation by actors on either side of the debate. Back in the 1990s, when the government proposed abolition of rent control, there were relatively concrete figures estimating the number of tenants that would be affected by decontrol and subsequent rent increases.

The data at the time revealed that around 19,000 premises (around 25,000 households) would be affected by decontrol, with a projected annual increase in market rental level of around 10% (LegCo, 1998). While the existence of these ‘objective’ data seems to provide more substance to the debate, it is clear that whether or not this constitutes a ‘minimal’ impact depends on the selective interpretation of the facts by different actors. Indeed, advocates on the other side of the debate repeatedly emphasised that many people living in decontrolled premises are not on the public housing waiting list, and hence would be vulnerable to future rent increases.

If we fast-forward to the most recent phase of debate in the 2010s, a similar degree of uncertainty exists regarding the impacts if rent control is re-introduced. This time, however, the government has not conducted projections of the impacts of re-control, unlike what was done in the 1990s. The burden of proof appears to have fallen on the shoulder of grassroots advocacy groups, who are expected to produce evidence to discredit the government’s claims. Lack of financial and human resources, however, means that grassroots groups have no hard data for contesting the government’s theories (Interviewee 4, low-income advocacy group).

Motivational frames: Shifts in lobbying strategies of advocacy groups

In the years immediately following abolition of rent control and removal of security of tenure, that is from 2004 to around 2010, divergences between adversaries remained more or less unchanged. As interviewees acknowledged, grassroots groups were relatively less active in their advocacy work during this period of time, since there were no signs that rent regulation would be on the administration’s agenda in the near future. From their perspective, the intractable deadlock simply rendered further deliberation meaningless.

The first signs of change came in around 2012, when the newly elected administration indicated that the Long Term Housing Strategy would be subject to review. This opened up a political opportunity for grassroots groups to lobby for rent regulation once again, especially in view of the proliferation of poor-quality flats in the low-end rental sector. However, despite the new administration’s willingness to deliberate on the housing needs of low-income households, the Chief Executive (and the Secretary for Housing) were quite clear that political support would be given to public housing development, but not rent regulation.

In response to consistent lobbying from grassroots groups, the government did conduct studies on rent regulation as part of the Long Term Housing Strategy review, as well as commissioning the Legislative Council Secretariat to undertake research on international rent regulation experiences, but eventually concluded that the downsides of rent regulation outweighed any benefits.

Lack of support from key decision-makers meant that advocacy groups had to reassess their framing strategies at this point. Indeed, many groups have shifted towards more lenient perspectives that involve partial regulation of selected categories of rental properties, while others have moved towards broader consideration of alternative interventions. It appears that the government has quite successfully undermined the credibility of advocates’ proposals, by amplifying the negative consequences of rent regulation, especially through appealing to international experiences and academic theories of supply and demand, which point towards the risks of reduced supply and rent inflation.

In the absence of hard evidence to rebut this interpretive framework, rent regulation advocates have had to reconstitute their framings in an attempt to reclaim their credibility. Thus, over time, some grassroots groups have modified their strategies and proposed alternative solutions which seek to address potential side effects of rent control. For example, since around 2014/2015, advocacy groups have become increasingly vocal about increasing the supply of transitional housing.

In the face of strong counterframing activities of the government, lobbying groups have come under pressure to modify their strategies to demonstrate that they are active players in problem-solving:

I think if we want the government to do something, we actually need to develop some trial projects, to show them we have tried something which is feasible … of course, the scale would be very small, since community resources are limited. (Interviewee 2, tenants group)

In particular, since around 2012, some organisations have mobilised utilisation of vacant properties to provide low-rent accommodation for selected low-income households. Most cases involve support from individual property owners, while some involve conversion of disused government buildings. Through appealing to the concrete progress achieved through these collective efforts, advocates are able to discredit the government’s claims that interventions in the low-end rental market are too complicated to be implemented.

While these innovative efforts are relatively small-scale, their successful implementation has subtly altered the debate by demonstrating the feasibility of increasing the supply of low-rent dwellings in the private market. These initiatives demonstrate the willingness of some landlords to offer below-market rents and security of tenure to low-income tenants, through the coordination of non-governmental agencies. Thus, such initiatives provide evidence of the dialectic between frames and collective action events (Benford and Snow, 2000: 625), whereby existing perceptions of landlord behaviour in the rental market are altered through experiences of collective action.

Nevertheless, some advocacy groups have also expressed ambivalence towards these reframing strategies. While these transitional housing projects have been framed as innovative solutions, there is an awareness that such efforts may distract rent regulation advocates from policy advocacy work and risk diluting the debate on rent regulation:

This is what makes me very worried about pilot projects … if I propose another pilot project, would this actually provide the government with further justification to not pursue rent regulation? (Interviewee 8, low-income advocacy group)

Some interviewees also pointed out the interaction between material resources and framing strategies. Low-income advocacy groups are able to sustain their work because of donations from individual or institutional donors, who tend to be selective about the projects that they support. These donors are keen to see value for money, and as a result, there is pressure for advocacy groups to focus their energy on projects which have a higher possibility of generating visible results, rather than research and policy advocacy work which is unlikely to generate visible changes in the short term.

The risk of operating within this performance-oriented framework is that it may weaken the mobilisation power of low-income advocacy groups, who spend a lot of effort working out the details of pilot projects, which reduces the time and resources available for research and policy advocacy work:

… the downside of this kind of work [research] is that there is no visible progress, so donors do not want to invest in this. They would prefer to invest in innovative initiatives. If there is a new project idea, and it seems to enjoy good feedback, then they would choose to support this project … Everyone goes in this direction … and it becomes a competition … which affects making advancements in policy advocacy. (Interviewee 8, low-income advocacy group)

Thus, although low-income advocacy groups have sustained their credibility by reframing the debate towards alternative, innovative solutions, the unintended effect is that they may spend less effort in developing convincing ‘vocabularies of motive’ (Benford and Snow, 2000: 617) to sustain participation in and support for the rent regulation movement, especially when their financial and human resources are limited.

As some of the interviewees pointed out, lack of further research on different models of rent regulation, and lack of a compelling proposal that addresses wider policy consequences, mean that advocacy groups are unable to elicit support from a broader audience, and that the rent regulation movement is unlikely to achieve substantial progress, even if the government reopens the debate in the future:

Let’s assume that the government … accepts the problems you have raised, and offers its proposal, but then you don’t buy the government’s proposal … when you are asked to propose alternatives, you are not able to say what the alternative is, or you propose something that is too big … advocacy groups who are in the frontline often have difficulties jumping out of their own frameworks. (Interviewee 3, low-income advocacy group)

In other words, in the absence of a comprehensive and compelling proposal for rent regulation in the city, it is unlikely that this agenda will attract support from households who are not on the public housing waiting list. Theoretically, middle-income tenants or younger households are potential supporters of the rent regulation agenda, since they are the potential victims of a weakly regulated rental market. Yet, existing motivational frames are not strong enough to motivate these people to care about the rent regulation agenda. Instead, lobbying for home ownership opportunities represents a more appealing agenda to this group:

If they [young people] have experienced eviction, then of course they would want rent regulation, but if they haven’t had this experience … their ultimate goal is to buy a house … if you tell them that rent regulation is going to benefit them, they will think … Really? They will think … what if I am lucky enough to purchase properties in the future and I want to rent them out? (Interviewee 3, low-income advocacy group)

In other words, although the weak lobbying momentum for rent regulation tends to be blamed on the government, there is also a lack of strong motivational frames to mobilise broader and sustained participation in the rent regulation movement. Apart from a few advocacy groups that speak up on behalf of low-income tenants, there is lack of support from other tenants, who do not have any strong motives to support these lobbying efforts, and who continue to be influenced by a strong home ownership ideology.

Conclusions

The findings in this paper illustrate that the policy contest over rent regulation in Hong Kong has been shaped by existing power relations as well as framing processes. In the context of a hybrid regime that has been sustained by a strong business–government coalition, landlords have been able to exert their influence through pro-market politicians, who possess strong ties with the government and are able to shape the regulatory framework through their dominance in the Legislative Council. Falling rents in the early 2000s provided the opportunity window for the government to propose deregulation of the private rental sector, and it was easy to secure legislative support of pro-establishment councillors. Despite the growing visibility of low-income advocacy groups in the post-2010 era, the balance of power continues to be tilted in favour of landlords, with no signs of government consideration of tightened regulation of the private rental sector.

The findings in this paper also highlight the relevance of framing theories for our interpretation of the rent regulation debate. In particular, the paper highlights the implications of divergent prognostic frames, despite overall convergence in diagnostic frames. While there is general agreement that slow delivery of public housing has triggered the crisis in the low-end private rental market, there is no consensus as to whether or not rent regulation is an appropriate solution. These contests can be explained by lack of empirical evidence regarding the relationship between regulation and supply (Rugg and Rhodes, 2003) – the government has been able to insist on its theory that regulation would restrict rental supply, while the burden of disproving this theory has fallen on the shoulders of grassroots groups. Lack of material and human resources means that grassroots groups have been unable to construct convincing counter-narratives, and risk being perceived as misguided supporters of rent regulation.

Advocacy groups have attempted to reframe the debate in the post-2010 period away from rent regulation and towards more ‘pragmatic’ forms of interventions, including experimentation with transitional housing projects. Visible progress of these pilot projects has also attracted the interest of the newly elected government, which has pledged financial and political support for these initiatives. Nevertheless, some advocacy groups have expressed concerns about the risks of focusing too much on pilot projects, which may dilute the lobbying momentum for rent regulation.

Thus, this paper highlights the important role of motivational frames in shaping the trajectory of rent regulation debates. In the context of a society such as Hong Kong, which continues to be dominated by a strong home ownership ideology, the obstacle faced by rent regulation advocates is not simply the divergence in prognostic frames between advocates and opponents, but the weak capacity of existing motivational frames to mobilise support from a broader audience. Even middle-income tenants who are potential beneficiaries of rent regulation are not convinced to participate in or support the rent regulation lobbying movement, which means that this movement is unlikely to be sustained or expanded, even if there is more research and empirical evidence to counter-balance oppositional claims. Thus, one of the biggest challenges for rent regulation advocacy groups is to develop more effective frame extension strategies. In other words, why should middle-income or younger households care about rent regulation?

These questions are closely linked to the future of those who are stuck in private renting and ineligible for public housing, whose probability of securing home ownership are highly uncertain, especially because of the government’s lack of commitment to provide low-cost home ownership opportunities on a large scale, and continuing rise in housing prices. Indeed, analysis of recent trends in the private rental sector indicated that an increasing proportion of new completions are leased out rather than owner-occupied (Rating and Valuation Department, 2006; 2013). There is reason to suspect that these households are middle-income households, and possibly young households, who have resorted to private renting in the context of unaffordable home ownership, although this requires substantiation through further research. As Lennartz et al. (2016) have argued, meeting the housing aspirations of young households does not necessarily imply the need to promote owner-occupied housing, since affordable rental sector housing can facilitate transition into independence as much as home ownership (p. 833). Yet, in places that continue to be dominated by a home ownership ideology, it is likely that young households in the private rental sector are still primarily interested in securing home ownership.

At the moment, rent regulation advocates often point towards the limitations that they face under a hybrid, semi-authoritarian regime, which makes the possibility of tightening rent regulation a distant dream. Yet, the analysis in this paper also flags up the important role played by advocacy groups as the key frame articulators in these rent regulation debates. It seems that the lack of support for rent regulation is not merely due to lack of political influence, but also a fundamental discord between dominant values in society – that is, societal prioritisation of home ownership – and the agenda promoted by rent regulation advocates. If rent regulation advocates wish to sustain their credibility as frame articulators, there is a necessity to move beyond existing frames, which tend to construct rent regulation as a solution for a specific target group – low-income renters that are queuing for public housing.

There are some crucial questions that lobbyists could ask themselves: How can the lobbying agenda appeal to the core values and beliefs of potential adherents? How can rent regulation advocates articulate appropriate ‘vocabularies of motive’ (Benford and Snow, 2000: 617), which are capable of mobilising support from a broader spectrum of households? Furthermore, what conditions can facilitate or hamper the emergence of stronger motivational frames? Is it just a matter of securing more financial and human resources for lobbying groups? Or is it a matter of developing stronger links with other frame articulators, such as the media, academia or think tanks? The answers to these questions have important implications for the future trajectory of the rent regulation lobbying movement – whether it will be able to sustain its visibility, or whether it will eventually dissipate and be overshadowed by other policy agendas.