Commission Against Corruption, Macao SAR

The CCAC completes “Inquiry report on Chief Executive Order no. 57/2024 (involving selling prices of independent units for economic housing projects located at Lots B4, B9 and B10 of New Urban Zone Area A)”, which means the complaints about selling prices and subsidy ratios for the 2019 economic housing units. The CCAC believes that the Chief Executive Order involved in the complaints complies with the legal stipulations about selling prices provided for in the Economic Housing Law which was revised in 2015 (hereinafter referred to as the “former Economic Housing Law”). The determination of the minimum limit of monthly incomes earned by economic housing applicants, the time for publication of selling prices and the market prices used for consideration of subsidy ratios are at the discretion of the Public Administration. The CCAC points out that, according to the content of the complaints, it seems that the minimum limit of monthly income earned by applicants at the time of application should be necessarily in line with the pricing of the economic housing units. It should be clarified that such amount is just the prerequisite for vetting and approval of applications and is often used for calculation of affordable mortgage repayment by an applicant, which served as one of the parameters of purchasing power of the applicant. The CCAC suggests the relevant departments pay more attention to the work of disseminating preliminary information and broadening the general public's knowledge in order to allow them to better understand and gain knowledge of the relevant legal regime about economic housing.

The CCAC earlier received several complaints about the selling prices of the economic housing units and the subsidy ratios published in the Chief Executive Order no. 57/2024. Upon analysis, the CCAC considers that the content of the complaints is not related to illegalities or improprieties of administrative procedures or administrative acts. It just involves regulatory acts or administrative measures of the Public Administration. Therefore, the CCAC carried out an inquiry into the matters within its jurisdiction and expedited the handling of the said complaints because the issues aroused concern in the society and the legal issues involved were relatively uncomplicated.

Regarding the issues involving the pricing for economic housing projects located at the involved lots, after analysis, the CCAC considers that, in 2019, when the Housing Bureau (IH) published the relevant application notice, the minimum limit of monthly total income earned by an applicant with a two-member household was MOP17,680 according to the Chief Executive Order no. 169/2019. This stipulation was just one of the requirements for vetting and approval of the applications. In 2024, when the selling prices of economic housing projects located at the involved lots were announced, the minimum limit of monthly total income earned by an applicant with a two-member household was MOP19,270 according to the Chief Executive Order no. 151/2023. Such limit was used for calculation of affordable mortgage repayment by an applicant, which served as one of the parameters of purchasing power of the applicant. The CCAC points out that the Public Administration has the discretionary power to decide on the year from which the figures are used as the basis for calculation and there is no mandatory stipulation in the law. In the past, when the Public Administration announced all selling prices of economic housing units, it used to use the then minimum limit of monthly total income earned by economic housing applicants at the time when the selling prices were announced for calculation of affordable mortgage repayment by an applicant, which served as one of the parameters of purchasing power of the applicant. It has never used the minimum limit of income effective during the periods of application or even earlier as the basis for calculation.

Regarding the fact that the minimum limit of income earned by economic housing applicants was set to be the same as the maximum limit of income earned by social housing applicants, the Public Administration considered that there should be no gap between them and the purpose was to comply with the principle of complementarity of economic housing enshrined in law and converge the policies of social housing, economic housing and private housing market. The CCAC considers that according to the content of the complaints, it seems that there is a confusion between the prerequisites for vetting and approval of applications such as the minimum limit of applicant's monthly income and the pricing criteria for economic housing. In fact, the two factors are not necessarily in line with each other in accordance with law, but the Public Administration only exercised its discretionary power in the implementation of the policies when considering the criteria of applicants' purchasing power. In general, the maximum limit of the monthly income of a two-member household of social housing or the minimum limit of the monthly total income of a two-member household of economic housing at the time when the selling prices are announced serves as one of the parameters of the calculation.

When analysing the subsidy ratios of economic housing, the CCAC states that the market price of an economic housing unit applied in the calculation is always determined based on the IH's comprehensive evaluation and the estimated prices suggested by three professional property valuation companies. In addition, the IH always clearly indicates the formulas to calculate the subsidy ratios of economic housing. The provision about the formulas to calculate the subsidy ratios in the case of re-selling economic housing units provided for in the former Economic Housing Law also did not necessarily stipulate how to choose the market price of the unit. This matter falls within the scope of discretionary power of the Public Administration. Therefore, the CCAC considers that the accusation that the Public Administration violated the regulations regarding the subsidy ratios is groundless and it is difficult to question the rationality of the relatively objective evaluation means adopted by the Public Administration when exercising its discretionary power.

Following a comprehensive analysis, the CCAC concludes that the content of the Chief Executive Order no. 57/2024 accords with the stipulations under the former Economic Housing Law in terms of its application. Facing the doubts about the selling prices of economic housing in society, the Public Administration and the relevant departments already clarified to the public the calculation methods of the selling prices and subsidy ratios of economic housing in different ways immediately in order to verify the legality of the relevant calculation methods. The CCAC points out that the new Economic Housing Law in force replaced the criteria of purchasing power with the criteria of cost because the applicants' purchasing power, the location of the buildings and the orientations of the units involved a certain degree of subjectivity, which will make the selling prices not correspond to the real costs. After changing the criteria or factors for determining the selling prices of economic housing as the land premium, construction cost and administrative cost, there will be no consideration of and dispute over the applicants' purchasing power regarding the criteria for determining the selling prices of the economic housing projects in the New Urban Zone Area A in the future.

The CCAC has already reported to the Chief Executive on the results of the investigation and it suggests the relevant departments paying more attention to the work of disseminating preliminary information and broadening the general public's knowledge of the legal regime of economic housing in order to enhance residents' knowledge of the purpose and role of construction of economic housing.

The Chinese version of the full report is available on the CCAC's website and the Portuguese version will be available later.