APPLICATION FOR HDB FLATS (Relaxation of 30-month debarment period for people affected by compulsory acquisition of land)

Dr Lau Teik Soon asked the Minister for National Development whether he will relax the 30-month debarment period for the application of Housing and Development Board flats for those affected by the compulsory acquisition of land for the North-East MRT line and comprehensive development and, if so, whether he will grant them priority allocation in view of the fact that some of them have to surrender their properties by March 1997.

The Senior Parliamentary Secretary to the Minister for National Development (Mr Matthias Yao Chih) (for the Minister for National Development): Mr Speaker, Sir, owners whose private properties are acquired by the State for public development can claim compensation on either encumbered basis or vacant possession basis.

Owners of private properties which are encumbered would receive lower compensation when their properties are acquired by the State. To help such owners, HDB then exempts them from the 30-month debarment period and the $8,000 income ceiling when they apply for new HDB flats. In addition, they are granted priority allocation of HDB flats. While waiting for the completion of their new flats, they can also apply for HDB rental flats as transitional accommodation for a maximum period of three years.

Owners who can deliver vacant possession of their acquired properties to the State will receive higher compensation. They would be able to secure alternative housing on their own and should not join the queue for subsidised public housing with other HDB flat applicants who have less means. Therefore, they are not exempted from the 30-month debarment period when they apply to buy flats directly from HDB.

New HDB flats are not the only housing option for owners of acquired private properties. Other housing options that such owners can consider are HDB flats sold in the open market and Executive Condominiums sold by the private developers. Regardless of the basis of compensation for the acquired private property, the 30-month debarment period is waived for these two types of housing.

Dr Lau Teik Soon: Sir, in view of the fact that the Government acquisition has led to tremendous financial difficulties on the part of some home owners and in view of the fact that their family income ceiling may be less than $8,000, and they are downgrading while most Singaporeans are upgrading and the special circumstances as well, as I have mentioned earlier, will the Senior Parliamentary Secretary re-consider the decision not to remove the 30-month debarment period to allow them to apply for HDB flats?

Mr Matthias Yao Chih: Sir, had their homes not been acquired, they would not have been eligible to join the HDB queue without the 30-month debarment period. If they opt for full compensation, which is going to be calculated based on the statutory compensation plus ex-gratia payments, that would bring it to the full value of their homes. The alternative accommodation for them would have to be bought from the open market or, if they wish to join the HDB queue for subsidised housing, they need to wait for a 30-month debarment period, which is the same for all the other owners of private properties.

Dr Lau Teik Soon: Sir, the Senior Parliamentary Secretary will appreciate that property prices have gone up very high. And in view of the fact that many of these home owners, despite the fact that they will get full compensation, will be unable to afford private housing, and that they want to downgrade and their family income is $8,000, which means they qualify to apply for HDB flats, except for the 30-month debarment period, will the Senior Parliamentary Secretary re-consider his decision again?

Mr Matthias Yao Chih: Sir, this formula for compensation on an encumbered basis or vacant possession basis is a well-established one. It has been applied to the farms that had been resettled, the squatter settlements and the various kampongs that we had in the past. It is a long established principle and we are consistently applying this in a fair manner and this acquisition exercise should not be any different from the other exercises.

Mr Chiam See Tong: I just want to have a clarification from the Senior Parliamentary Secretary. He says that the quantum of compensation is more for those who move out and less for those who stay behind. How does the Ministry determine this quantum of compensation for those who move out early and for those who move out late? Is the difference in quantum due to the rentals that they would have to pay? How are these two amounts determined?

Mr Matthias Yao Chih: Sir, delivery of the property on an encumbered basis does not mean that he decides to stay behind or not move out. What it means is that when he delivers the property to the State on an encumbered basis, he also asks for certain other privileges or benefits which include partly a resettlement package. Under the resettlement package, the Government will offer to him an HDB flat, direct from HDB, lifting of 30-month debarment period and priority for the allocation of such a flat. For that benefit, he gets a lower compensation and the calculation is done by the Ministry of Law based on a certain formula that they have come up with.

Dr Lau Teik Soon: Sir, in view of the fact that the Senior Parliamentary Secretary is not prepared to remove the 30-month debarment period, will he consider offering them alternative accommodation at concessionary rates, if they have nowhere else to go, after receiving the full compensation and while waiting to move to their next home?

Mr Matthias Yao Chih: Sir, we do not have such a scheme at the moment and we have not been thinking along those lines yet.

Dr Lau Teik Soon: Mr Speaker, Sir, will the Senior Parliamentary Secretary consider this scheme and implement it?

Mr Matthias Yao Chih: Sir, it is unlikely that we will go along this direction because the compensation formula and packages are long established ones. They have worked well in the past and this acquisition exercise is another public project for the benefit of society which is applied in the same manner as what we have done in the past.