Most Singaporeans want more subsidies, strict criteria to keep flats in prime areas affordable

The most difficult challenge in formulating the new model is to ensure that flats remain affordable in the long term.PHOTO: MINISTRY OF NATIONAL DEVELOPMENT

Updated from : The Straits Times, 4 July 2021

SINGAPORE – New Housing Board flats in prime areas such as the city centre and Greater Southern Waterfront can be kept affordable and accessible through additional subsidies and strict selection criteria, many Singaporeans believe.

About 6,500 people have weighed in on how to make public housing in such areas inclusive, since plans to do so were announced in November.

Their voice will help shape not just housing, but also major social policy, with implications for future generations, said National Development Minister Desmond Lee on Sunday (July 4).

“It’s not just about the home or the possible investment upside, but it’s about the kind of society and neighbourhoods we want to have, the kinds of core areas we want to see, neighbours we want to have and the identity we keep in Singapore,” he said.

While the suggestions were diverse, people were very clear that equity and fairness in allocating the flats, both at the initial buying stage and subsequent resale stages, was paramount, he noted.

“We’re up against personal motivation, up against very powerful social forces and strong economic forces.

“While it is not easy, it is incumbent on us to see that these prime locations continue to reflect the openness and diverseness of our society.”

The majority of respondents – who gave their feedback through a national online survey, dialogues, focus group discussions and e-mail over the last eight months – supported additional subsidies that would keep flats affordable, and strict criteria for first-time buyers and subsequent resale buyers. 

Mr Lee, speaking at a virtual public engagement session conducted by the Government feedback unit Reach, raised various issues the Government has to address when formulating a housing model for future public housing.

“What is the entry point for ‘affordable’? Are we catering to middle-income professionals? Retirees who want to right-size? Working Singaporeans who need to live near those areas because they work there as security, cleaners and F&B?”

There is also the issue of the income ceiling for Build-To-Order (BTO) flats and whether it is sufficient as an eligibility criterion to buy these prime flats, added Mr Lee.

The current income ceiling for families to buy a HDB flat is $14,000, and $7,000 for singles. 

Even the way the HDB allocates new flats – currently done by ballot – is also worth looking at, he said. 

“Do we allow ballots? In our ballots, first-timers are given more chances and those who have family living nearer get higher priority… Do we continue to allow these? Does it entrench privilege and exacerbate inequality?”

The most difficult challenge in formulating the new model is to ensure that flats remain affordable in the long term, in subsequent resales, Mr Lee added. 

Some suggestions that were discussed in Sunday’s session include a longer minimum occupation period than the existing five years and a tiered system for the Government to recover the additional subsidies when the flats are sold. 

Another suggestion was to introduce eligibility criteria for resale buyers to ensure these flats remain accessible to a wide spectrum of Singaporeans, even on the resale market, and to encourage owner-occupation instead of for profit through rental or resale.

Singapore will look to more mature successful cities when working on the housing model, Mr Lee said.

In December, he said that a variety of flat types, such as two-room flexi units and rental housing will be included where possible. 

On Sunday, Mr Lee reiterated that the model will apply only to future public housing in prime locations, not existing flat owners.

“We will work towards a balance that can achieve the widest public good,” he said.

“We may not be able to address and come up with the perfect scheme. Certainly our public housing scheme is not perfect – there are rough edges and areas to improve on but we have a good base to build on.”