Nearly 560,000 families living in public housing face seeing monthly rents rise by HK$25 to HK$352 in September.
The move to increase rents by 10 percent comes after a review carried out every two years by the Housing Authority showed incomes of tenants rose more than 16 percent between 2009 and last year, mainly due to the minimum wage law that took effect last May.
A 10percent hike is the maximum that the Housing Department, the authority's executive body, may suggest under the rent-adjustment mechanism based on a sample study of 2,000 homes.
This means of the 553,100 tenants, excluding those on Comprehensive Social Security Assistance, more than 70 percent will see hikes of at least HK$101 in monthly rent, which currently ranges from HK$259 to HK$3,525.
Chief Executive Donald Tsang Yam- kuen in his final policy address waived July and August rents as one-off relief.
But this will not offset the higher rents to be paid until 2015, a source said.
The authority's subsidized housing committee meets today to discuss the planned increase and study ways to minimize its impact.
Committee member Wong Sing-chi admitted the proposed rent hike is too steep and said he will suggest a moderate annual increase of 2.5 percent.
"Rent increases are based solely on the average monthly household income while the inflation rate is not taken into account. We have to make sure the rent hike will not put a heavy financial burden on tenants," Wong said.
A tenant named Choi, who lives with her family of five in a 300-square-foot flat at Tsui Ping Estate, Kwun Tong, said the increase is too hefty.
Although her family income has risen up from HK$20,000 to HK$23,000 thanks to the minimum wage law, so have living expenses, she complained, blaming hikes in power bills and fares.