HDB RENTAL FLATS

Dr Mohamad Maliki bin Osman asked the Minister for National Development (a) what is the number of one, two and three-room rental flats currently available; (b) how many appeals have been received by the Housing and Development Board (HDB) from single mothers with custody of children who have been barred from renting a flat from HDB arising from a sale of their flats due to divorce and how many of these appeals have been successful; (c) whether HDB will consider reviewing the income ceiling for eligibility for rental flats to take into consideration the total number of people in the household, such as the per capita income instead of a generic household income ceiling of $800; and (d) whether HDB periodically reviews the financial situation of tenants such that those whose incomes have improved significantly can be encouraged to purchase flats, thus making more rental flats available for those more deserving.

The Minister for National Development (Mr Mah Bow Tan): Mr Speaker, Sir, as at end July 2003, HDB has 3,100 1-room, 2,600 2-room and 1,800 3-room vacant rental flats which can be let out. 1- and 2-room flats are rented out to families earning $800 or less a month under the Public Rental Scheme; and 3-room flats to households with monthly incomes between $800 and $2,000 under the Rent and Purchase Scheme. The rents are heavily subsidised.

Under the existing policy, HDB lessees who have sold their flats are not eligible to rent a flat from HDB for a period of 30 months from the date of sale. The purpose of this is to ensure that subsidised rental housing is targeted at those who are genuinely unable to afford home ownership.

However, for cases where the flat is sold due to divorce, HDB will waive the 30-month debarment and allow the divorced mother who has custody of at least one child to rent a flat from HDB if she meets the eligibility conditions. Over the past three years, HDB has assisted about 1,000 divorced mothers who were granted custody of their children to rent flats.

MND and HDB have just conducted a review of our rental housing policy. The review addresses, among other issues, the MP's questions on whether the current income cut-off of $800 per month is relevant and how to encourage rental tenants whose financial situations have improved over time to buy a home ownership flat. The outcome of the review will be announced shortly.

Dr Mohamad Maliki Bin Osman: Sir, if there are more than 4,000 rental flats that are available right now, why is it that a lot of my residents keep telling me the response from HDB is that there is a long waiting list? Is there really a long waiting list? And would the cases of single mothers who have a tendency to live like nomads, unless they get housing, because they have been chased out of their homes, be given priority based on the circumstances that they face?

If I get the Minister correct, the single mothers are helped. Under what circumstances are single mothers not given rental housing or told that they have been debarred, and some of them have been debarred permanently? For such cases, will HDB also consider their circumstances?

The third question is with regard to single mothers who are permanent residents (PRs). I know the policy is that PRs are not eligible for rental flats, but some of these single mothers do have custody of their children and their children are Singaporeans. But yet, because of the policy, they are not allowed to rent those flats and they are still moving around looking for housing.

Mr Mah Bow Tan: Sir, yes, there are 5,700 1- and 2-room flats which are available for renting. However, on the other hand, there is a huge number of Singaporeans who are also asking for such rental flats and they include not just the single mothers, which the Member talked about, but senior citizens who have been chased out of their homes by their children, and other Singaporeans who have sold their flats and because of financial hardship are not able to purchase another flat.

So, there is indeed a long waiting list of Singaporeans wanting to rent flats from HDB. And that is the reason why some of the requests or appeals from Members may not have been acceded to. There are, of course, eligibility criteria which HDB applies in processing these appeals. For example, citizenship status, because we do make a distinction between Singaporeans and permanent residents, and household income. There are, of course, other disqualifying criteria, for example, debarring Singaporeans who have already benefited from two or even three housing subsidies from applying for rental flats. It is important and necessary for HDB to have these eligibility criteria and debarment criteria because subsidies involved in public housing are huge, and we have to be able to direct the subsidies to those people who require most.

I hope the Member would understand why there is a need for such criteria and also why the supply of rental flats is less than the demand for such flats and for that reason, not all eligible Singaporeans can be given a rental flat immediately upon request.

Ms Irene Ng Phek Hoong (Tampines): Sir, given the long waiting list for rental flats, is there a case for increasing the number of rental flats, especially given the fact that there is an increasing number of downgraders as a result of economic hardship?

Since the Budget debate, I have also asked for a review of the income ceiling of $800. And HDB had then informed me that it was already reviewing it. And, today, the Minister said that they just reviewed it. Can I have an assurance that HDB will announce the outcome of the review soon? Because many Singaporeans who are caught by this $800 income ceiling criterion desperately need a HDB rental flat.

Mr Mah Bow Tan: Yes, the Member did hear me correctly. HDB is reviewing it, and I would like to ask the Member to be a bit patient.

Mr Ang Mong Seng (Hong Kah): Sir, the Minister has mentioned about the 1,800 units of 3-room flats. Are they rental or purchase flats and are they old or new flats?

Mr Mah Bow Tan: These 1,800 flats are actually rental flats. They are actually for people under the Rent and Purchase Scheme. Under the Rent and Purchase Scheme, we rent these flats to families whose household incomes are below $2,000, with the proviso that over time we will sell them these flats at a discount, so that they can become home-owners as well. The 3-room flats for purchase are actually a separate matter.

Dr Mohamad Maliki Bin Osman: Sir, may I clarify? On the 5,000-odd rental flats that are available, are these currently vacant flats?

Mr Mah Bow Tan: No, available.

Dr Mohamad Maliki Bin Osman: "Available" meaning they are already occupied or they are vacant and available?

Mr Mah Bow Tan: No. They are available flats. Not all of them are occupied, but there is a waiting list for such flats.

Mr Steve Chia Kiah Hong: Sir, can the Minister clarify if rental rates could be set according to a percentage of the applicant's household income like, say, 10%, instead of a heavily subsidised rate across the different income levels, so as to better manage and meet the demands from the long waiting list?

Mr Mah Bow Tan: I am not sure whether the Member is aware of the rental rates that we are charging. If he has checked them out, I think he will find that they are actually much more generous than what he has mentioned. To follow his recommendation, I would be quite happy to consider. But I do not think it would be very well received.

Mdm Ho Geok Choo: I want to ask the Minister: if these rental flats are still available, why is there a queue?

Mr Mah Bow Tan: Sir, it does not mean that all the applicants who apply will be given a flat straightaway. I am not sure whether the Member is aware of this. But I have come across such cases in my own meet-the-people sessions where a person is given a flat in Jurong, but he says, "I don't want a flat in Jurong. I want a flat in Bedok or Tampines." So we tell him that there is no such flat available. And he says, "No, I do not wish to have this flat." The flat is available for him but he does not want it. But, on the other hand, there are those who want the flat anywhere but are not eligible. So, as a result of this, there is always this mismatch between supply and demand.

Dr Mohamad Maliki Bin Osman: Sir, I am sorry, I still do not quite understand. There are 5,000-over flats available. Does it mean that they are currently available in the market for applicants to apply to rent, ie, they are vacant, they are available, but not the total number of rental flats that HDB has? Am I right?

Mr Mah Bow Tan: Let me start from the beginning. There are 3,100 1-room flats and 2,600 2-room flats. These 1- and 2-room flats, totalling 5,700 flats, are available for rental under the Public Rental Scheme. Not all of them are occupied, but there is a long waiting list for such flats. If tomorrow we say that everybody on the queue overnight would be given a key, then all of these flats will be taken up.

Dr Mohamad Maliki Bin Osman: To rephrase or understand it, it means these 5,000-plus flats are the total number of flats that HDB has for rental. What proportion of it is currently available or vacant for people to rent? And, at the same time, can I also ask if the Minister can provide information on what is the size of the waiting list for us to know the extent of the wait that our residents will have to endure? Also, based on the waiting list, has HDB certain kinds of assessment criteria to look at the seriousness as well as the urgency of the needs of such families, for example, the single mothers who really do not have anywhere to go, except to rely on the sympathies of friends and the goodwill of others?

Mr Mah Bow Tan: I do not have the exact number of flats that are currently vacant, but I will check up and give the Member the number. But I think that is not the point. The point really is that our rental scheme carries a heavy subsidy. And, because of that, not everybody who shows up at his meet-the-people session who asks for a rental flat will automatically be given one. That is not possible. However, there are those who are eligible. As I said, for those eligible and when they come to us, we will offer them these flats when their turn is due on the queue.

So, there are two separate matters. One is the number of flats which are currently in stock under the Public Rental Scheme. There is a separate matter which the Member is alluding to, that is, we should change our criteria and we should be more generous in allowing, say, single mothers to rent HDB flats. I think that is a separate matter. It is a policy issue. I have earlier explained why we have to have certain criteria, and not everybody who sells a flat straightaway, or who is divorced and applies for a flat, will be automatically given a flat.

Yes, a Singapore permanent resident with a child who is a Singaporean is in need of a flat. But under our current criteria, we would not give that family a flat automatically. However, if there are extenuating circumstances, if it is a matter of severe financial hardship, we would consider it on a case-by-case basis. But, as a general policy, the answer is no, we would not give.

Dr Lily Neo (Jalan Besar): May I ask the Minister whether he would also consider renting flats to those young couples who may not want to commit to buy new flats when they get married due to the trend of unemployment and the prospects of the present job market?

Mr Mah Bow Tan: Sir, currently we do not cater to this group of people because our rental flats are subsidised flats and they are really meant for those in the lower income groups. However, I do recognise that what the Member has suggested is something that we should look into and HDB is looking into it, and we will be making some announcements.

Dr Jennifer Lee (Nominated Member): Could I ask the Minister? Obviously, there is so much mismatch - there is a queue, there are vacant flats. Would HDB, in fact, be doing a review? Because the Minister is saying that right now there are certain criteria and because of that, we do not accommodate a lot of people. But it would appear that there is quite a need out there. Would there be a review done? Is there review in the works? If there is not, would he consider that it might be timely to do a review? I think for many of the criteria put in place in years past, circumstances have changed and society has changed to some extent. So, would a review not be timely?

Mr Mah Bow Tan: Sir, I am not exactly sure what the Member has in mind when she talks about a review in terms of the eligibility criteria. We have certain very fundamental criteria. For example, the criterion on Singapore citizenship. I think that is a very fundamental point. Singaporeans enjoy significant public housing subsidies; permanent residents do not. That is a distinction that we have made and we are sticking to that distinction for good reason.

What other eligibility criteria are we talking about? The 30-month debarment which many Members are familiar with. Why do we have a 30-month debarment? For the simple reason that we do not want to have somebody who is not deserving of this subsidy, or somebody who has just sold the flat, or somebody who has sold his private property and comes on to the HDB queue straightaway overnight. We say, "No. If you have sold your private property and you are eligible for HDB flat, you wait 30 months." I think that is a reasonable criterion.

If there are any specific areas where the Member would like us to review, in terms of eligibility criteria, we would be pleased to consider it. But as it stands at the moment, the criteria are very simple. Over and above that, I have said many times in this House that HDB is always willing to look at specific cases where they pertain to individual hardship, or financial hardship, where it is due to unforeseen circumstances, or demise of a family member, etc. So there are no situations, as far as I know, where we have absolutely said no, where severe individual circumstances warrant us to look at those cases.

Dr Teo Ho Pin (Holland-Bukit Panjang): Sir, may I ask the Minister whether he will consider converting some of the unsold new flats, for example, in Jurong West area, as temporary rental flats for those Singaporeans who need to rent the flats?

Mr Mah Bow Tan: Is the Member talking about subsidised or non-subsidised rentals?

Dr Teo Ho Pin: Subsidised rentals.

Mr Mah Bow Tan: In other words, it is an extension of the rental scheme. We are looking at some arrangement along these lines. If he could be patient, we will give him the answer.

Ms Braema Mathiaparanam (Nominated Member): Could I ask the Minister how many appeals have HDB acceded to where this 30-month waiver is concerned?

Mr Mah Bow Tan: Sir, I do not have the number with me. But I can tell her that it is quite significant because I do come across individual cases where the case report was brought to my attention and HDB had recommended and the relevant committees had approved.

Mr Steve Chia Kiah Hong: Sir, would the Minister look into allowing the establishment of a HDB rental market by relaxing the rules for rental of the whole HDB flat? This will increase the supply and lower rental cost and, indirectly, reduce the demand for HDB subsidised rental units.

Mr Mah Bow Tan: Sir, this is one of the suggestions that we are looking into, so if the Member could be patient.

Mr Speaker: I think we have taken too long on this Question. I will allow two last questions by Dr Lily Neo and Mdm Cynthia Phua.

Dr Lily Neo: May I ask the Minister whether he will consider moderating our HDB home ownership as an enhancement policy due to our present changed circumstances that Singaporeans are facing?

Mr Mah Bow Tan: I think the Member is talking about something else entirely. It is not about rental housing. Is she talking about upgrading?

Dr Lily Neo: It is rental flats per se. If you do not need to invest in HDB property, then you can provide more rental flats. It is related.

Mr Mah Bow Tan: I think the Member has to be patient.

Mdm Cynthia Phua (Aljunied): Sir, since the Minister is so generous, could he even consider the new 4- and 5-room flats as rental flats? I am just being realistic. Could he consider more 3-room flats to be rental flats?

Mr Mah Bow Tan: We do not have 4- and 5-room flats for rental. Our rental schemes do not extend to 4- and 5-room flats. We have 3-room flats for rental, but they are specifically for those families whose incomes fall below a certain level, and they are meant to facilitate them to buy that flat in later years as their income levels improve. So we do not have 4- and 5-room flats for rental. I am not sure whether I gave the wrong impression to the Member just now.