HDB introduces caps on subletting flats to foreigners

SINGAPORE — The Housing and Development Board (HDB) announced new caps on the subletting of flats to foreigners yesterday, but stopped short of extending the cap to the subletting of rooms, to minimise the impact on those who rely on doing so for additional income.

This drew divided views from property experts and Members of Parliament (MPs) TODAY spoke to, on whether the quota — which takes immediate effect — would be effective in addressing the HDB’s objectives of maintaining a “Singaporean character” in the heartlands.

Under the new rule, which is aimed at “(preventing) the formation of foreigner enclaves” within HDB estates, no more than 8 per cent of the units in a neighbourhood can be rented out to foreigners and permanent residents. For each HDB block, the cap is 11 per cent.

Malaysians, however, will be excluded from this cap as the HDB pointed out that they can “better integrate into our estates due to their cultural and historical similarities with Singaporeans”.

Subletting rooms to foreigners would still be permitted, to reduce the impact on people who rely on subletting for additional income, such as the elderly and low-income households, said the HDB.

Mr Colin Tan, the Director and Head of Research and Consultancy at Suntec Real Estate Consultants, however, felt this was an “escape” clause, and questioned the effectiveness of the cap in addressing concerns on foreigner enclaves at HDB estates.

However, ERA Key Executive Officer Eugene Lim said the new quota can always be tweaked in future. “Previously, there was no such control ... we have to start somewhere,” he added.

The move to introduce such a cap was announced by National Development Minister Khaw Boon Wan last month, following a suggestion of a 10 per cent cap by West Coast GRC MP Foo Mee Har during the Committee of Supply debate in Parliament last year.

Mr Khaw had noted that less than 4 per cent of HDB flats are sublet to foreigners, excluding Malaysians. But the proportion could go as high as 9 per cent in some areas, or even 18 per cent in some blocks.

The HDB yesterday said only about 1 per cent of HDB neighbourhoods and blocks reached the new quota limits, namely in towns like Clementi, Jurong West, Queenstown and Sengkang. There are currently 1,840 sublet flats in these areas, and about 270 flats will be affected by the new quota.

Mountbatten MP Lim Biow Chuan, who sits on the Government Parliamentary Committee for National Development, felt the cap is a “decent compromise”, but the figure could be smaller. “Eleven per cent is still quite large on a per block basis … It’s not spread out over a big geographical area where you can dilute the presence of the foreigners. So, if this 11 per cent comes together and congregates, I personally feel that it’s still quite (a) big (number),” he said.

As for excluding the subletting of rooms, he pointed out that foreigners who rent rooms are typically singles or couples who would not gather in bigger groups.

Ms Foo too acknowledged the need for some flexibility in the subletting of rooms to foreigners. The cap, she said, may mean foreigners who are keen on renting a whole flat would be “spread out” across the island.

The HDB has launched a new e-service on its website where the public can check if a particular flat can be sublet to foreigners. The information will be updated on the first day of every month and will be valid for the whole month.

Flat-owners who are currently subletting their whole flat with the HDB’s approval can continue to do so for the remaining approved subletting duration but any subsequent application once the existing approval expires or is terminated will be subjected to the new policy. The same applies to flat owners who already sublet their flats to Singaporean or Malaysian subtenants but wish to include foreign subtenants subsequently.