AL gives initial green light to rent control mechanism

Song Pek Kei presents the joint rent control proposal to the plenary

The Legislative Assembly (AL) approved a joint proposal by nine of its lawmakers to establish a new rental control mechanism alongside an arbitration center for rent-related disputes.
The amendment to the Civil Code to introduce new rent regulations is aimed at market stabilization. One of the measures proposed will be a rental control mechanism with a rate based on a coefficient set by the Chief Executive according to the consumer price index and housing market conditions. The amendment was approved at first reading with 28 votes in favor. It will now be subject to an article-by-article discussion by an AL standing committee.
The debate was lengthy, with multiple interventions from several legislators, most of them sharing worries regarding the possibility of this new mechanism interfering with Macau’s established free market rules.
Chan Chak Mo was one of the legislators who raised questions, namely regarding prospective article number 999, about rent updates based on the coefficient approved by the Chief Executive. “How large is the impact of the rental control to the free market economy? Looking at the cons, will this measure hinder the development of the real estate [sector]? Will it decrease foreign investment, and developers may construct fewer buildings?” he asked.
On the other hand several lawmakers recalled that rent control laws and mechanisms are common procedures everywhere in the world and especially in countries that have market-based economies. Legislator Song Pek Kei, who presented the proposal to the plenary, said, “Developed places like Germany and New York have practiced rental control. We may learn that the free market is compatible with rental control.”
Replying to the questions of the legislators Ms Song clarified that “these measures do not mean taking control of everything. It is just a establishment of a higher limit” that aims to “stabilize the market”.
Leonel Alves also took the use of the word to explain that rent controls are not new in Macau and that successive governments and governors in the past have used them in order to input dynamism in the market when needed. He cited the example of the measure that allowed residency authorizations to non-residents based on real estate investments, an opinion also shared by the legislator Pereira Coutinho.
Another related measure covers the establishment of an arbitration center that will try to provide mediation of rent related disputes in order to avoid such cases filling the courts.
In order to increase transparency and avoid some “rent scams,” an article that includes the need for a notarization of signatures when signing rental contracts aiming to prevent illegal immigrants and criminals from renting and using residential flats was also added.
The bill was approved with 28 votes and 1 abstention, and will now proceed for further detailed discussion.

Lawmakers want taxi service adapted to smartphone era

The taxi service was one of the topics most highlighted during the spoken enquiries period. Regarding Uber and other similar ride sharing services, Chui Sai Peng stated that “the smartphone applications that have been revolutionizing the taxi service around the world, allowing a totally new experience for customers, have been collecting a lot of positive feedback”, and although the operation model has caused a lot of concerns and discussion, the Uber “application aims to provide an alternative to customers” that have a need for it.
Although referring to the positive side of such a service, Mr Chui said, “In order to operate in Macau, this system must comply with the local laws” and “adjust itself to the local reality.”
“We must admit that the current taxi service has room for improvement and the emergence of applications for taxis results from the actual market demand,” he concluded, urging the taxi service to modernize itself in order to follow market demand. “The sector cannot close upon itself, fleeing from technological applications and modernization,” he said.
Ella Lei also picked up the topic, saying, “Recently, the Uber application for transportation hiring generated conflicts in the interpretation of the law, but the majority of the population supports this model. The community even wants government to legalize this type of service and include it in the regulation of the special taxi license, introducing greater market competitiveness and travel options in order to promote the reform of taxi services.” She gave the example of a similar system, currently in use in mainland China, that is fully regulated and very popular.

budget execution reports presented

The Commission of Audit’s Budget Execution Report and the Report of the General Account for 2014 were presented to the AL. The first highlighted that despite the fall registered in the Q3 of 2014 the government’s ordinary integrated account registered a very positive balance of MOP94.8 billion. The Aggregated accounts from the Special Entities likewise reached an amount of MOP17.5 billion, continuing to show a healthy performance. The Commissioner of Audit, Ho Veng On, also presented the General Account Report that presents revenues, expenses and assets of MOP161.9 billion, MOP67.1 billion, and MOP246.9 billion respectively.