Most Singaporeans say flats in prime areas should come with additional subsidies: MND, HDB

SINGAPORE — Public housing built in prime locations in Singapore should come with additional subsidies on top of those that currently exist to keep such flats affordable and accessible for Singaporeans.

And to ensure affordability over time, these flats should also be resold only to the Government, who may need to introduce eligibility criteria for subsequent resale buyers.

These were among some of the feedback more than 6,500 members of the public have given to the Ministry of National Development (MND) and the Housing and Development Board (HDB) since last November, when the authorities started gathering views on how to keep upcoming public housing developments in prime locations affordable, accessible and inclusive for Singaporeans.

These locations include the city centre and Greater Southern Waterfront.

The engagements were conducted over various platforms such as dialogues, online surveys and emails.

Speaking at one such virtual public engagement session conducted by Government feedback unit Reach on Sunday (July 4), National Development Minister Desmond Lee said that keeping public housing in these areas accessible, affordable and inclusive for Singaporeans remains the “core principle” that the Government is committed to upholding.

“But how we implement this policy and how we adapt and adjust our public housing policies and strategies over the years and decades ahead must keep up to the changing demographics and changing society that we see in Singapore,” said Mr Lee.

A majority of the respondents were supportive of the idea of providing additional subsidies above the typical housing subsidies today, to ensure that Singaporeans can better afford flats in prime locations.

Respondents also supported recovering these additional subsidies in some way when the flats are sold to ensure equitability with other flat owners who would not be accorded this additional subsidy.

Among the issues that the Government will have to consider is who the future developments in prime areas will cater to: Middle-income Singaporeans, lower-income households or those who work in the central areas.

Another issue is the income ceiling for public flats located in prime areas, said Mr Lee.

The current income ceiling for families to buy an HDB flat is S$14,000. It is S$7,000 for buyers who are single.

Mr Lee questioned if basing the eligibility criteria on income ceiling alone is enough to ensure that flats in prime areas remain accessible to all Singaporeans.

He noted that young graduates who may not be earning a lot may be able to afford these flats with financial help from their parents. Retirees with no income but who have accumulated wealth over the years may also afford these flats.

To ensure these flats are affordable, Mr Lee said that the Government is considering additional subsidies for those in prime areas.

However, it will also need to consider how it “claws back” the capital gains that someone makes from selling his flat in prime areas.

Some suggestions by the public include imposing resale levies, or clawing back subsidies only if there is an upside for sellers, said Mr Lee.

KEEPING PUBLIC HOUSING IN PRIME LOCATIONS OPEN FOR ALL

Talk of having public housing in prime locations went back as early as 2015, when a participant at the Real Estate Developers’ Association of Singapore (Redas) mentorship programme for students asked then-Social and Family Development Minister Chan Chun Sing if the Government would consider building HDB flats on prime land such as Marina South as a way of increasing interaction among social classes.

In response, Mr Chan said then that building HDB flats on prime land would not be enough to bridge the rich-poor divide in society.

The issue was revisited a year later when former National Development Minister Lawrence Wong said that the Government was looking into building public flats in prime areas to ensure that the city is accessible to all.

At the National Day Rally in 2019, Prime Minister Lee Hsien Loong announced that 9,000 public and private housing units would be built on the land where Keppel Club sits as part of plans to develop the Greater Southern Waterfront.

Last November, MND announced that the Greater Southern Waterfront would host a range of housing types to ensure a good mix of Singaporeans, including two-room flats for seniors and rental housing for low-income families.

Among the feedback received from members of the public was that a longer Minimum Occupation Period (MOP) would encourage owners to stay in these flats longer and strengthen their intention to live in the homes they own. The MOP for most HDB flats is currently five years.

A number of respondents also felt that it was important for flats in prime locations to be set aside for those who truly intend to live in prime locations. They supported the idea of disallowing the rental of the entire flat, even after the MOP is over.

While a vast majority identified the areas within the Core Central Region, such as Bukit Timah, Chinatown and Tanjong Pagar, as prime locations for housing, many also considered other areas with good transport links and amenities, as well as those located near the Central Business District, as prime locations.

MND said that it is wrapping up its engagement sessions with the public. It will study possible measures in greater detail and provide more details in time to come.