HDB PUBLIC RENTAL SCHEME

HDB PUBLIC RENTAL SCHEME: 1.

Mr Baey Yam Keng asked the Minister for National Development under the public rental scheme, if the HDB will consider renting three-room flats to low-income families which cannot afford a purchase flat but need more living space than a two-room flat.

2.

Dr Muhammad Faishal Ibrahim asked the Minister for National Development what is the demand and supply situation of rental flats offered by the HDB and what is the average waiting time from the time one applies to the time one is allocated a rental flat.

The Minister of State for National Development (Ms Grace Fu Hai Yien) (for t:

he Minister for National Development): Mr Speaker, Sir, may I have your

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permission to take Question Nos. 1 and 2 together?

Mr Speaker: Yes.

Ms Grace Fu Hai Yien:

Currently, HDB has about 42,000 rental flats, of which 1,200 are vacant and available for rent. Each month, 160 rental flats are returned to HDB while 370 eligible applications are received. Given the limited numbers of rental flats, we need to ensure that rental flats are allocated to only deserving cases without alternative housing options.

The average waiting time for a rental flat ranges from two to six months, depending on location. Those who need rental flats urgently can participate in HDB's Daily Selection Scheme where flats are available for immediate selection and allocation on a daily basis.

HDB has no plans to build 3-room rental flats, as we need to focus our limited resources on meeting the housing needs of as many needy households as possible. In addition, rental flats also need to remain small so that the rent will be affordable to the families in need.

In fact, HDB plans to convert some available 3- and 4-room blocks at Boon Lay and Woodlands into about 1,000 units of 1- and 2-room rental flats. HDB will also build new 1- and 2-room rental flats in the near future starting with around 1,000 units in the next few years.

Dr Lily Neo (Jalan Besar): May I ask the Minister of State whether she will review the joint singles scheme for those who have lost their spouses or who have no family member or friend to share their rental flat with? Is it not very difficult for many single elderly to comply with this ruling requring them to share and to live with complete strangers?

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Ms Grace Fu Hai Yien: Mr Speaker, as I have mentioned, the need for rental flats is there. We have a limited stock of rental flats and we have to allocate them carefully. From a resource allocation perspective, we would prefer to have two singles sharing a 1-room flat. HDB has facilitated the pairing up in the past. We do try to put them together and, in some cases, where it is extenuating, as the Member has mentioned, perhaps the demise of a spouse or there are some peculiar personality issues, we have made exceptions. But from a resource allocation perspective, we want to maximise the limited pool of rental flats that we have and, if possible, get as many needy people housed. For every 1-room flat that is only occupied by one person and leaving the other vacancies unoccupied, we do have another person basically to house. From our perspective, with a limited budget, having two singles paired up is the best solution, going forward.

Mr Baey Yam Keng (Tanjong Pagar): Mr Speaker, will the Ministry consider, for families which are low-income but larger in size and who may find 1- or 2-room flats too small for their living comfort, opening up 3-room flats for those families in need? The second question is: why is it that HDB is appointing commercial marketing agents to market 3-room flats to be rented out at commercial rates?

Ms Grace Fu Hai Yien: Mr Speaker, as I mentioned in my answer, we would like to provide as many needy households that are eligible for rental flats as quickly as we can and, therefore, given the very limited stock of rental flats that we have, we would prefer to have them in 1- or 2-room flat size. To have new 3-room flats at the expense of being able to build two 1-room flats, for example, obviously it is wiser to have more 1-room flats than a single larger room flat, like a 3-room flat. So, from a resource allocation perspective again, we would stick to 1- or 2-room flats because, as much as we like to

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provide a shelter for the needy, we would also like to encourage them to own their homes at some point in time, and comfort is a good reason to encourage them to perhaps start with acquiring a 2-room flat, for example.

On the issue of management agents renting out 3-room flats, that is really for us to make better use of vacant flats. They do not come under the Public Rental Scheme.

Ms Irene Ng Phek Hoong (Tampines): Sir, some elderly cannot rent a flat in the open market. They cannot afford to stay in their own flat and they have to sell their flat. But HDB will come back to them to say that they cannot, because they have to go through a 30-month debarment period. Not only that, some of them have purchased two flats before. But these elderly, with medical bills to pay, have no choice but to sell their flat to settle the many bills that they have. I want to ask the Minister of State whether there is flexibility given for those who have bought two flats before and those who have sold their flats and have to move on to a smaller flat, to give them this rental option.

The other question is that the Minister of State has been stressing that there is a limited number of flats. Can I ask the Minister of State whether there is any possibility of increasing the number of rental flats to meet this increasing demand for rental flats?

Ms Grace Fu Hai Yien: I will take the second question first. As I have mentioned in my answer, we are planning to construct new rental flats over the next few years and we are also in the process of converting 3- and 4-room flats into 1- and 2-room rental flats. That review is done after considering the number of new applications that we have. We are receiving about 370 eligible applications

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on a monthly basis. We have a stock of 1,200 at the moment. We will be using up our rental stock quite quickly if we are not careful in assigning the rental flats. That is what we are doing. We are starting to construct and convert the 3- and 4-room flats into 1- and 2-room rental flats.

With regard to the 30-month debarment period rule as well as having sold two flats or more, I think Members would agree with me that the rental flats are heavily subsidised. For example, for those who earn $800 a month and below, we are charging them $30 for a 1-room flat and $60 for a 2-room flat. It is highly subsidised and highly attractive, and if we do not have very strict rules, I think it will be very attractive for many to turn to rental flats as an option. We should keep rental flats to those that are really in need and therefore there are rules, for example, to stop families who have just sold and received a big proceed from their sale of flat, to rent and to look at rental housing as a first choice option. Having said that, we have exercised discretion and we have granted exceptions to cases that are really deserving.

Ms Lee Bee Wah (Ang Mo Kio): Mr Speaker, I would like to ask the Minister of State whether we can give priority to those families with many young children. I have a Malay family with four young children, aged between one and four years old, and they will be evicted by their landlord by the end of the month and she has been coming to see me about a rental flat.

Ms Grace Fu Hai Yien: We do look at cases on a case-by-case basis. As I said, we do exercise discretion.

Dr Fatimah Lateef (Marine Parade): Sir, can I ask the Minister of State for the renewal rate for rental flats? Can a group of residents who are in the income

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bracket of $801 to $1,500 per household income per month be considered on a case-by-case basis because these are people who are in a very tight financial situation?

Ms Grace Fu Hai Yien: Mr Speaker, we do look at rental revisions very carefully and as much as possible accommodate them by giving advance notice as well as spacing out the increase. In this case that the Member has mentioned, for income brackets of $800 to $1,500, after the revision, we are talking about a monthly rental of $110 for a 1-room flat and $150 for a 2-room flat. I believe that for someone who is earning $800 to $1,500, this would be an acceptable amount to pay. It is actually way below market rate. The subsidy is very heavy. But obviously we would apply a principle that if you have the ability to pay, you should pay according to your earning capacity. In this case, for $800 to $1,500, we have decided to raise the rental progressively.

Having said that, we were very mindful of the impact on the low-income and that is the reason why we have capped those who are earning $800 and below at rentals of $30 and $60 for 1- and 2-room respectively for the time being.

Dr Muhammad Faishal Ibrahim (Marine Parade): Sir, will the Minister of State update the House on the rate of increase on the number of new supply of rental flats that are coming on board annually over the next three years and whether such a supply will be sufficient to cater for the demand of rental flats?

Ms Grace Fu Hai Yien: Mr Speaker, as I have mentioned, we have a stock of about 42,000 rental flats. If you look at it in proportion to our total public housing, that is roughly about 5% of our total stock. For HDB to set aside 5% for very

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heavily subsidised rental flats, I think that is a very reasonable proportion. Having said that, we are mindful of some of the difficulties that some needy families may be going through, particularly in view of possible stagnation of income, and that is the reason for us to embark upon construction as well as conversion programmes. We are talking about 1,000 to 2,000 units being built or converted over the next few years.