Increased HDB Rental Rates

Dr Lily Neo asked the Minister for National Development (a) how many lessees of HDB rental flats had been affected by rental hikes in the last two years; (b) what was the basis of the rental adjustment and the percentage of increase; and (c) whether HDB would consider reversing this increase for those households living in poverty in view of the increasing cost of living.

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The Minister for National Development (Mr Khaw Boon Wan): Sir, HDB rentals are adjusted at the time of tenancy renewal, if the income of the tenants has changed. This is useful to those who suffer an income reduction. This policy ensures that rental subsidy goes more to those who earn less. On the other hand, this encourages tenants whose financial circumstances have improved to eventually move on to home ownership, giving up their rental flats for needier families.

In the last two years, 1,100 tenants had their rents reduced, while 5,100 had rents adjusted upwards. The percentage increase in rental rate will depend on the extent of the increase in household income. The principle of charging higher rent for higher income is sound. However, where there are individual cases of financial hardship as a result of the rental adjustment, we can review them and re-adjust if necessary.

Dr Lily Neo (Tanjong Pagar): Mr Speaker, Sir, may I ask the Minister, for those HDB rental lessees who have attained a certain higher income, instead of raising their HDB rental further, would the Minister consider selling two-room HDB flats to these lower-income tenants who can then use CPF monies to pay for their home, rather than paying more in cash for increasing rentals that eat into their daily needs? Does the Minister not agree that such a measure is consistent with the established long-term tenor of the Government's policy on home-ownership for Singaporeans?

Mr Khaw Boon Wan: Indeed, our intent is to encourage ownership rather than rental. We would prefer to be seller rather than landlord. Those who are capable, we should try to encourage them in that direction. So, in principle, yes, I agree with the Member. The specifics, we will have to look into them, because sometimes there may be circumstances which forbid them from getting a further HDB loan, without which they may not be able to conclude the purchase. We will have to take a look at the individual cases. But like the Member, I will always be sympathetic.

Assoc Prof Dr Muhammad Faishal Ibrahim (Nee Soon): Sir, I would like to ask the Minister whether there were many instances whereby the lessees had difficulties paying the new rentals, and what the HDB had done or is doing to assist them or in engaging them to pay the revised rental rates.

Mr Khaw Boon Wan: Sir, the answer is, yes, there are cases where tenants have had difficulties, and it will show up in the form of arrears. We try to look into each arrear with care, and those repeated arrear or chronic arrear cases, HDB will assign case managers to try to find a way out for the families.

Dr Lily Neo: Sir, the Minister said earlier that HDB had in the last two years increased HDB rentals to about 5,100 lessees. May I ask the Minister whether in our present climate of rising cost of living and stagnant wages for the lowest income group, are we not putting too much pressure on them and putting them in struggle of their daily living?

Mr Khaw Boon Wan: Mr Speaker, Sir, I am not one who likes to put pressure. I do not like pressure myself and, like the Member, I am always sympathetic. But as I explained in the reply, where there have been salary adjustments, then tenants go up to a different rental tier. I think it is fair that if you are earning more, then your subsidy will be less than those who are earning less. But, as I said, there will always be some family situations where despite the increase in salary, they may not be able to cope. We will always be sympathetic.

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