HDB RENTAL PAYMENTS

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HDB RENTAL PAYMENTS:

(Defaults): 7.

Dr Muhammad Faishal Ibrahim asked the Minister for National Development (a) if he will provide an update on the number of Singaporeans who have defaulted on their HDB rental payments in the last 12 months, in light of the increasing costs of living; and (b) will he consider increasing the current number of rental payment categories to better reflect the different levels of affordability amongst low-income and needy Singaporeans.

The Parliamentary Secretary to the Minister for National Development (Dr Mohamad Maliki Bin Osman) (for the: Column: 3163

Minister for National Development): Mr Speaker, Sir, from April 2007 to March 2008, there were on average 4,700 rental households in rental arrears of three months or more. This constitutes about 11% of the total rental households. This is comparable to the same period in 2006/2007.

Our public rental flats are highly subsidised. The rental rates fall into three tiers.

First, eligible households with a monthly income of $800 and below pay a fixed rental rate of $30 per month for a one-room flat. Those with a monthly income of $801–$1,500 pay 30% of market rent at about $110 per month for a one-room flat. For those earning more than $1,500 and are still staying in a rental flat, they pay 50% of the market rent at about $180 per month for a one-room rental flat.

Our rental structure is calibrated to provide subsidy where it is most needed. For the really needy with less than $800 monthly income, the rental rates have been kept very low and have not been revised since 1979. For those earning more, especially those with household income exceeding $1,500 per month, we will encourage them to consider home ownership instead of rental since they should be able to afford to buy a small flat with their CPF contribution together with the monthly rents they are currently paying.

Rental households who face genuine financial difficulty despite the low rents, may approach the Community Development Councils for help under the ComCare schemes.

Dr Muhammad Faishal Ibrahim (Marine Parade): First, could the Parliamentary Secretary share with us the details of the demographic distribution of those who have defaulted on their rental payments in

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the last 12 months, in particular, in terms of age, as well as those PA and non-PA recipients? Secondly, in view of the impending slowdown in the economy, what steps are being taken by the HDB to help needy Singaporeans who have problems paying their rental?

Dr Mohamad Maliki Bin Osman: Sir, on the first question, I do not have the detailed demographic profile but, by and large, PA recipients do receive substantial assistance from the Ministry of Community Development, Youth and Sports and I do not think that they form the larger portion of families in rental arrears. The majority of families who are in rental arrears are also those who are paying the fixed rent.

On the question of what HDB will do to help these families, basically, HDB is a housing authority and we continue to provide heavily subsidised and affordable rental flats for the low-income families. Low-income families who have difficulties, as I have mentioned earlier, are encouraged to go to the Community Development Councils to get financial assistance. If they are eligible and they get into schemes, eg, the Workfare Scheme, there are subsidies and assistance with regard to paying for their rentals that are within those schemes.

Mdm Ho Geok Choo: I would like to ask the Parliamentary Secretary two questions. Firstly, can the Ministry comment on the sudden surge of rental flats in recent months? Secondly, going forward, for those who cannot even afford a rental flat, what alternative accommodation can we provide for these people?

Dr Mohamad Maliki Bin Osman: Sir, on the first question on the sudden surge of rental flats, I think Members will probably be experiencing this surge through the MPS cases and, as highlighted by PM at the National Day Rally, there is a surge in

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the number of rental flat applicants. I think there could be many reasons, and one of them is, as some have cited, the high cost of living. Others have cited that perhaps the good property market is making people sell their flats and asking for rental flats. Indeed, I think that is one of the possibilities because when we look at the proportion of people who actually apply for rental flats, about two-thirds of them are actually ex-lessees and amongst these two-thirds, another two-thirds actually are not in arrears of their mortgage loans nor are they divorce cases who, under special circumstances, we will consider for rental flats.

So I think, often times, people see this as an option to perhaps monetise their assets given the current situation and they see our heavily subsidised rental flats as an attractive option. It is an attractive option because it is highly subsidised and I think we are very concerned, as PM mentioned, that we do not want to encourage those who are not truly needy to crowd the rental queue. So we are in the process of reviewing the rental applicants to make sure that the subsidies given to these rental housing are targeted at the truly needy.

On the second question of how do we help these cases, as mentioned, those families who are really needy will be assessed and we will continue to help those deserving cases.