Lawmakers on Monday called on the government to take into account inflation and the cost of living when reviewing public housing rents.

The calls came after the Housing Authority proposed raising rents by 10 percent.

If approved, the increases would take effect in October with a three-month exemption period for most tenants.

At a Legislative Council panel meeting, DAB lawmaker Edward Lau said the government should consider how much rent tenants can afford, as the city's economic recovery after the pandemic has been sluggish.

Meanwhile, lawmaker Yang Wing-kit said the exemption period suggests a need to revamp the way rent increases are decided.

"Out of the past eight inspections, including this one, there have been four times when the Housing Authority provided some form of exemption or deferment," he said.

"If the entire mechanism is working well, you wouldn't need to specifically provide exemptions or delay payments. At this point, I think we need to consider whether the mechanisms in the current regulations require a review or optimisation."

In response, Secretary for Housing Winnie Ho said the authorities should not casually make changes to the way public housing rent increases are worked out.

"There is one thing needed to be very cautious about inflationary factors. Because when we incorporate them, we should consider the actual affordability of each tenant. Inflation goes hand in hand with deflation," she said.

"For example, in a deflationary period, the reduction in wages may be less than the decrease in prices. This could result in a situation where you have to reduce wages and increase rent. These are sensitive situations, and we should not make changes to our mechanisms casually."

The authority reviews public housing rents every two years, with increases capped at 10 percent.