VACANT HOUSING BOARD SHOP-HOUSES

Mr Tee Kim Leng asked the Minister for National Development (i) how many Housing Board shop-houses are at present vacant; (ii) what is the loss of revenue to the Housing Board accruing from the non-occupancy of these vacant shop-houses; and (iii) what is the annual cost of maintenance of these vacant shop-houses.

Mr Tan Kia Gan: There are 43 Housing and Development Board shop-houses vacant at present. This represents 4.3 per cent of the total number of shop premises under the Board's management.

When the Housing and Development Board took over from the Singapore Improvement Trust in February 1960, 137 shop premises were vacant. This amounted to 15.4 per cent of the shops under management at that time.

Some of the shops had not been let since the completion of the buildings. The Housing Board took positive steps to bring down vacancies by introducing the "rising rent" principle. Under this system, properties which remain vacant for more than four months are rented out at 70 per cent of the minimum rent for the first year, 80 per cent for the second year and 90 per cent for the third year. Thus, if the minimum rental for a shop-house is $200, the rentals payable in the first, second and third year would be $140, $160 and $180 per month; in the fourth year, the full rental of $200 is charged. This encourages shop-keepers who pay lower rentals at the beginning when they are establishing business and goodwill in the locality.

All the 43 shops vacant were built by the former Singapore Improvement Trust. No vacancy exists among shops built by the Housing Board since it was formed in February 1960.

The Board has succeeded in reducing the percentage of vacancies from 15.4 per cent to 4.3 per cent. This is a reasonable figure considering that the Board has 1,000 shop properties under its management. Casual vacancies are bound to crop up from time to time as some shop-keepers give up their tenancies and the properties have to be let again to new tenants.

In cases where it was clear that there was little hope of letting out the shops, the Board has taken action to convert such shop premises into living units. Eight such units in Stirling Road were converted into living accommodation in August 1960. Four units were likewise converted in Winstedt Court.

The position is constantly reviewed and, as and when necessary, conversion will take place.

In the planning and designing of shops, the Board, since it took over, has paid particular attention to the locality in which shop premises are placed plus the provision of living accommodation so that the shops are attractive to shop-keepers and the results are clearly seen in that none of the shop premises constructed by the Board are vacant.

The answer to the second part of the question is:-

(a) Under the former S.I.T., the loss of revenue from the non-occupancy of the 137 vacant shops was approximately $24,000 per month as on 31st January, 1960.

(b) Now the figure has been reduced to only $6,721 per month for the 43 vacant shop units.

The answer to the third part of the question is that it cost the Housing Board approximately $60 per annum to maintain a shop unit, so that for the 137 vacant units under the former S.I.T., the estimated cost of maintaining these vacant premises was $8,220 per annum. Now the cost is approximately $2,580 per annum for the 43 vacant shop premises managed by the Housing Board.

Mr Tee Kim Leng: (In Mandarin): Mr Speaker, Sir, has the Minister considered the question as to how he would take action to enable the shop-houses to be occupied by the tenants?

Mr Tan Kia Gan: The Board has been looking into this question of either converting the shop-houses into living units or applying the "rising rental" principle. Up to this moment, we have been able to let out 94 of these 137 shops. I am sure in time we will be able to reduce this figure.