HOUSING AND DEVELOPMENT BOARD RESALE FLATS (Rejection of applications due to ethnic integration ratio)

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HOUSING AND DEVELOPMENT BOARD RESALE FLATS:

(Rejection of applications due to ethnic integration ratio) 2\. Dr Amy Khor Lean Suan asked the Minister for National Development (a) how many applications for sale and purchase of resale flats had been rejected each year over the last five years due to the ethnic integration ratio and what percentage is this of the total number of resale applications received per year; (b) whether any waiver from this policy had ever been given and, if so, how many were given and what were the reasons; and (c) whether the HDB renders any assistance for cases where no waiver is given, to mitigate any hardship that may arise due to the application being rejected.

The Minister for National Development (Mr Mah Bow Tan): Mr Speaker, Sir, before I respond to Dr Amy Khor's specific questions, allow me to explain the rationale for the Ethnic Integration Policy (EIP).

The Government introduced the Ethnic Integration Policy (EIP) in 1989 to ensure a balanced mix of the various ethnic groups within HDB estates. At that time, a discernible trend was observed of racial

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enclaves starting to form in our HDB estates, which would have serious implications for our multi-racial society. The vast majority of Singaporeans live in HDB estates. By providing HDB residents of different races with more opportunities to interact as neighbours, the EIP fosters ethnic tolerance and understanding, and strengthens our social cohesion and national unity.

The EIP has been effective in maintaining ethnic balance in our HDB estates. Over the years, it has helped to lower ethnic concentrations in towns with a high concentration of a particular race. For example, the percentage of Chinese in Sengkang has been lowered from 90% in 1989 to 80% today, Malays in Bedok from 23% to 19%, and Indians in Woodlands from 12% to 9%. When the EIP was implemented in 1989, 35 HDB neighbourhoods, or 28% of the total number of neighbourhoods, had hit the EIP limits, ie, the maximum allowable proportion for each of the ethnic groups. Today, 41 or 25% of the 162 HDB neighbourhoods have hit the EIP limits. Without the EIP to place a cap on ethnic proportions, the ethnic concentrations in the affected neighbourhoods would have been higher.

Let me now address the specific queries raised by Dr Amy Khor. Over the last five years, about 300 applications for sale and purchase of resale flats were rejected each year due to the EIP. This is less than 1% of the total number of resale transactions received by HDB each year.

To achieve its objective, the EIP is implemented strictly by the HDB. Waiver is considered only for cases where there are very exceptional circumstances. Over the last five years, HDB has granted EIP waiver to an average of less than 20 appeals a year. However, HDB does exercise flexibility under certain circumstances, for example, by allowing households of mixed marriages/parentage

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to be reclassified to meet the ethnic criteria.

HDB's data shows that most flat-owners who wish to sell their flats are able to do so without any difficulties, despite the EIP. With the large number of resale flats transacted annually, sellers who are realistic in their asking price should be able to find buyers from the eligible ethnic groups. For those who have bought another flat and need more time to sell their existing flats, HDB can assist them by granting a time extension. Between 2002 and 2005, HDB granted approval to 50 cases that requested for more time to sell their flats due to EIP restrictions.

HDB also has various financial assistance measures to help lessees who are facing financial hardship and have problems meeting the HDB mortgage loan repayments, so that they are not compelled to sell their flats as a first option.

In addition, HDB will continue to actively develop and promote the various HDB towns to make them attractive for all races, for example, by planning adequate places of worship, eating houses, schools and other facilities that are important to the different ethnic groups.

The Government recognises that there are households which are inconvenienced and may need more time to find a suitable buyer for their flat because of the EIP. But this is a sacrifice that Singaporeans must be prepared to make to safeguard racial harmony in our society. Racial riots in other countries have shown how easily inter-ethnic tensions can be stirred if racial enclaves are allowed to develop and fester. Abolishing the EIP would be a dangerous step in this direction. It will lead to our housing estates, schools, neighbourhood shops, markets, social and

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recreational amenities, and ultimately our politics being developed along ethnic lines. The EIP is an important pillar of social stability in Singapore, which we should preserve.

Dr Amy Khor Lean Suan (Hong Kah): Sir, before I ask my supplementary questions, I beg your indulgence to make a statement lest I be misunderstood.

Mr Speaker: A very brief one, please.

Dr Amy Khor Lean Suan: Sir, I would like to state that I firmly believe that the ethnic quota remain in place as it would be naive to suggest doing away with the quota, especially at times like this where world events have shown that race and religion are very delicate and deep-seated matters that cannot be taken for granted. Sir, I would like to ask four supplementary questions.

Firstly, I would like to ask the Minister if the Ministry does regularly review the quota to see if it remains appropriate in the light of our evolving immigration and procreation patterns and, if not, whether the Ministry could do so to ensure the appropriateness of the quota as the percentage of, say, Indians relative to other races, could have changed in view of changing immigration patterns.

Secondly, I would like to ask the Minister if the Ministry could exercise more flexibility when the market is weak, not just in terms of time exemption but in terms of even extending interest-free loans to sellers of such flats who are adversely affected by the ethnic quota if they have to take possession of a resale flat. This is because in a weak market there are very few buyers for a single property and the probability of being affected adversely by this ethnic quota actually goes up.

Thirdly, I would like to ask the Minister if the Ministry can consider

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casting the quota as a band rather than as a fixed and inviolate number for each race in each estate and in each block as this will then allow the policy to have some in-built flexibility and help minimise the number of flat sellers that could be adversely affected by the policy.

Lastly, I would like to ask the Minister, in the light of the Workers' Party's manifesto which seems to suggest that they are proposing to dismantle the ethnic integration quota because they feel that we have already achieved a certain level of social integration, in his opinion, if we ever can dismantle this ethnic quota, that we can ever achieve a level of social integration where racial enclaves will not re-emerge.

Mr Mah Bow Tan: Mr Speaker, Sir, first of all, as far as the review of the EIP is concerned, like all HDB housing policies, we do conduct regular policy reviews from time to time. In the case of ethnic limits for the EIP, these limits were derived in 1989 based, firstly, on the proportion of the different races in the general population, and, secondly, on the projected demand for HDB resale flats from each of these races. Over time, as the situation changes, we will review these limits, keeping in mind the objective of the scheme. I must say, Sir, that we have been reviewing the limits regularly and, so far, we have not seen it necessary to change them. However, having said that, we will continue to keep an eye on the numbers and we will, as in other policy matters, conduct a review of the EIP as well.

In the case of flexibility in times of a slow economy, I have to point out, as I explained in my answer, that the number of people who are affected by the EIP is not very large. In fact, in terms of percentages, the total number of EIP appeals that we receive every year is less than 1%. We have about 300 appeals and total annual resale transactions for HDB is

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about 30,000 to 35,000. We find that in most cases the people who are affected by the EIP, after a while, would not have a problem selling their flat. It is a function, first of all, of the asking price of the flat. It is a function of the economy. In a weak market, most flat sellers would find greater difficulty in selling their flat, not just those affected by the EIP. It is also a function of the size of the flat, the location and condition of the flat, and so on.

There are many factors that determine whether a flat is easy to sell or not. In a slow market, everybody is affected. It is not possible for the HDB to specifically target just the EIP sellers for assistance. We do exercise flexibility across-the-board, for everybody. Recognising that in a slow market, there would be more difficulties in selling their flats and, on a case-by-case basis, we have allowed them to extend the time taken to sell their flat and we have given them financial assistance so that they do not have to sell their flat in the first place. Most of the time these measures have been able to relieve the pressure on the sellers.

The next question was whether we should have the quota as a band instead of a specific number. When we set the numbers in 1989, we specifically set each of the limits for both the neighbourhood as well as the block much higher than the corresponding proportion of the ethnic groups in the general population. For example, the Chinese proportion in the population was 77%, the neighbourhood limit was set at 84% and the block limit at 87%. For the Malays, the proportion was 14%, the neighbourhood limit was 22% and the block limit was 25%. There is a margin to allow us to be more flexible in terms of facilitating the buying and selling of flats. I am not sure that a band will help because, at the end of the day, when you reach the limits of the band, what do you do? What we will do is to go back to what she asked in the first

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place, ie, review the quota from time to time, exercise flexibility as and when we can, but bearing in mind the overriding objective of the scheme, which is to make sure that our housing estates remain mixed and that we do not allow the races to start to congregate again. Bearing that very important objective in mind, we will conduct our policy reviews.

The last question she asked is about the Workers' Party's manifesto.

I notice that Mr Low Thia Khiang is not in the House. I think it would have been a question better answered by him. When the Workers' Party proposed in their manifesto that we dismantled the Ethnic Integration Policy among other policies, I was not sure whether they thought that it is no longer necessary for us to have this Ethnic Integration Policy because Singaporeans have matured or whether they do not, in the first place, believe that it is necessary for us to have this policy, ie, that it is all right to have racial enclaves, that there is nothing wrong with it.

Sir, I think it is very important for us to remind ourselves in this House that racial harmony is not a given for Singapore. It is not a given for any multi-racial society. Certainly, for Singapore, we have had experience with racial riots in the sixties. And if you trace the history of public housing in Singapore, you will understand the role that public housing has played in helping to create a much more integrated and tolerant Singapore. What do I mean? In the fifties and sixties, if you recall, Singaporeans were living in segregated communities, according to race, and even according to dialect groups. So, you had Malays in Geylang Serai and Jalan Eunos; Indians in Serangoon Road and Naval Base; and the Chinese were not just concentrating in one area - they were concentrated according to dialect groups. So you had

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Cantonese in Kreta Ayer; Teochews in Boat Quay and Hougang (as some of them are still today); Hokkiens were in Telok Ayer; Hainanese were in Beach Road and also Middle Road areas. So, each of these communities was either monolingual or mono-dialect and their approach to things was also along those lines.

In the early sixties when we had our public housing programme, the Government took the opportunity to mix the population. As a result of that, not only do we have multi-racial HDB estates but we have multi-racial constituencies as well. So each constituency in a way is like a mini-Singapore, and it is for this reason that our MPs understand the concerns and problems faced by the different races. And it is also for this reason that our own residents of different races understand the problems of other races. I think this is something that we must continue to maintain. Having a multi-racial housing estate has allowed us to build this very tolerant and harmonious society where for over-40 years, we have had no problems with racial riots, none of the problems that we see in many other multi-racial societies.

What we did in the sixties was for new flats. Then we realised that with the flats becoming available for resale, people were starting to regroup again. And, hence, when the trend was very clear in the early eighties, in 1989 the EIP was put in place. So for us in Singapore, this is a lesson that we have to learn. We have to be proactive in our policies. We have to make sure that people live together as neighbours so that they learn, their children learn that different races have different customs, different taboos, that we eat different foods, listen to different music, we worship different Gods, and yet, at the same time, despite these differences, we have the opportunity to mix together - to go to the same hawker centre, to go to the same market, to go to

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the same school, to take the same lift, same bus/MRT to work, and so on.

I think this is a very important aspect of Singapore life that we need to preserve. So when the Workers' Party suggests that we dismantle all this, I am not sure whether they understand what they are suggesting. Therefore, it is very important for us to point out the consequences of what they are suggesting, and why we think that they are wrong. And it is important for us to get an opinion from the Workers' Party. Mr Low is not in this House but, perhaps, I would be able to get an answer from him at the next opportunity. It is better for him to answer Dr Amy Khor than for me to do so. But whatever the motivation behind its manifesto, the consequences of following that path are really very dangerous and very disastrous - it is like playing with fire. It is important for us to point this out so that people can understand why is it that we think it is wrong. And to point this out vigorously.

I hope that the next time we meet in Parliament - or even before that - this matter will be clarified, so that at least we get the fundamentals right and the basic understanding correct - is this necessary or not? Then we can start talking about the mechanics of it. Dr Amy Khor has stated her position very clearly. She says she supports the policy, she understands why it is necessary, but she asks certain questions about the workings of the policy. I think those are very fair questions and we will certainly take them into consideration. But let us get the fundamentals correct - is this necessary, is it important for us to have integration policies in Singapore? The answer is definitely yes.

Mdm Ho Geok Choo (West Coast): Mr Speaker, Sir, I would like to ask the Minister, as a step towards better customer service management of these prospective sellers of HDB flats and as a

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refinement to the policy on EIP, whether HDB would consider managing perhaps a database of prospective buyers of this minority group, so that whenever there are prospective sellers, they could actually refer to this database, and that might just give them better information and knowledge of what is available.

Mr Mah Bow Tan: Sir, I am not exactly sure how such a database will help. It is not a situation where there are very few transactions in the marketplace. There are 30,000-over transactions every year. There are transactions all over Singapore - in estates which are affected by the EIP as well as those which are not affected. Buyers and sellers have a lot of avenues - they can visit the HDB's website where there are records of transactions and where they can tell whether the EIP limit is reached or not - to guide their decisions. They can also avail themselves of the services of thousands of housing agents in Singapore. And, last but not least, they can look out for the classified advertisements in the papers which also will give them data on this.

So, I am not exactly sure how HDB maintaining such a database would help. But if the Member has got a specific proposal, we will be happy to look at it.

Mr Speaker: Mr Steve Chia, last question.

Mr Steve Chia Kiah Hong: Clarification from the Minister, Sir. Since the Government thinks that the EIP is very important, why are the private residential developments, ie, private condominiums, not subject to the EIP? Does the Government not worry that there could be a racial congregation in such private developments too?

Mr Mah Bow Tan: Sir, the answer is very simple. 90% of Singaporeans live in HDB flats.