Supply of rental flats to be raised to 60,000

SINGAPORE - The Government is raising the supply of rental flats further to 60,000, after already raising it to 50,000 last year, Senior Parliamentary Secretary for National Development Maliki Osman said on Monday during the debate on Budget 2013.

The new target is up from the Government's former promise to build 57,000 rental flats by 2015.

Responding to MPs' concerns, Dr Maliki said the public rental scheme has rules to help the vulnerable "while ensuring that we do not encourage imprudent behaviour or erode the work ethic." But in applying the rules, the Government will consider the merits of each case and exercise flexibility and compassion, he added.

Dr Maliki also noted that although market rents have risen significantly, the Government has not adjusted the public rental structure since 2006 and has no plans to do so.

As for MPs' calls to let more qualify for rental flats, Dr Maliki said the Government will continue to review their rules from time to time, and will be sympathetic in applying the rules.

For instance, though there is an income ceiling of $1,500 a month, the Government looks at each case and is prepared to offer rental flats to those in financial difficulties even if their income is above that level, he said.

Workers' Party MP Lee Li Lian (Punggol East) noted that there were 11,736 foreign spouses on Long Term Visit Passes here who are disqualified from getting rental flats, and that many such families are needy. She asked under what conditions rental flats have been given to Singapore citizen with foreign spouses.

To that, Dr Maliki said that only Singapore citizen households qualify because rental flats are heavily subsidised. "We recognise the needs of low-income citizens with foreign spouses, and do consider them on a case by case basis, but the priority goes to Singaporeans," he said.

An excerpt from Dr Maliki's speech is included in the next page.

Speech by Senior Parliamentary Secretary for National Development and Defence Dr Mohamad Maliki Osman at the Committee of Supply

Housing and Empowering Those in Need

Many members spoke on the challenges faced by low-income and vulnerable families.

I understand their concern intimately as I spend a lot of my time working with and helping these vulnerable families improve on their quality of life.

Recently, one Mdm J approached HDB for a public rental flat. She was a childcare teacher, and her monthly income was $1,800, exceeding our $1,500 income ceiling. However, she was a divorcee and had to raise four school-going children, without support from family.

I discussed her case with HDB. We waived the income ceiling and gave her a 2-room public rental flat. While she waited, HDB gave her interim rental housing. HDB also referred her to the Community Development Council (CDC) for skills upgrading. This way, she could raise her income, and one day realise home ownership for herself and her four kids.

Helping Mdm J and her children was not just about giving them a roof over their heads. It was about stabilising the family. It was about ensuring the children's needs are met and they are not further disadvantaged by their family's circumstances.

Mdm J's case is not unique. And I have seen many such cases. Each day, I go through many housing appeal cases, individually and personally. I do this, because I know circumstances vary.

To help, we have to understand the individual's circumstance, so we can better assess their needs.

This Government has always been committed to helping the weak and vulnerable victims of circumstances. For them, we give support to ease their situation, and over time, this has increased along with our resources to do so, as a country.

If they have children, we want to ensure that their children are not denied education and opportunities. They will lift their families from poverty and avert an inter-generational problem.

This is why we do not just give some hand-out or benefit without making the effort to properly understand their circumstances, and take a hands-on approach to provide practical help and meet their long-term needs. Let me elaborate on this Government's approach in helping low-income and vulnerable families.

Support in home ownership

First, we support low-income families to achieve home ownership. We believe that home ownership will increase their self-worth and provide a better stable environment for their children to be raised in.

A low-income first-timer household earning $1,500 or less can own a brand new 2-room flat in a non-mature estate for around $50,000.

How?

Well, we give a substantial market discount and price our 2-room flats affordably. On top of this, we provide them with Additional CPF Housing Grant of $40,000 and Special CPF Housing Grant of $20,000.

They can fully pay for their flat using CPF. They do not need to fork out additional cash. And if they have two or fewer children and would like to focus their resources on raising their children well, they can join the HOPE scheme and receive among other benefits, a $50,000 CPF housing grant.

Provide public rental flats

Second, for the minority who cannot afford to own a flat, we provide public rental flats. These flats provide basic and good housing. Last year, we increased the supply of these flats to 50,000. We are ramping this up to 60,000, a significant 20 per cent increase.

Administering rules with a heart

Third, in administering the public rental scheme, we have in place rules to focus help at the vulnerable while ensuring that we do not encourage imprudent behaviour or erode the work ethic.

However, in the application of these rules, we will consider the merit of each case and exercise flexibility and compassion to help those in dire need.

Mr Lim Biow Chuan and some other MPs have raised concern over the rental "cliff" that tenants face when their income increases to above $800. ESM Goh first alerted us to this two years ago. Since then, we have fixed it.

For these tenants, HDB waives their rent increase, so that they continue to pay the lower rent, for one tenancy term of two years. They will not suffer a net loss in income. At the end of two years, if their income increase is still insufficient relative to the rent increase, HDB will continue to suspend the rent increase.

As a general rule, no one in HDB's 1-room and 2-room rental units will see their wage increases taken away by HDB through rental adjustments. We have already fixed this problem and should you come across any of such cases, let me know immediately and we will resolve it.

Market rents have increased significantly, but we have not adjusted the public rental structure since 2006, and we have no plans to do so.

However, we need to maintain a fine balance between keeping rental rates low, so as to provide support and not discourage improvements in income through work; and on the other hand, adjusting rental rates where appropriate to reflect its relation to real costs, and encourage tenants who are able to progress on to own a flat when they are ready.

Ms Lee Li Lian, Mr Png Eng Huat, and Mr Muhamad Faisal Abdul Manap suggested that we relax our rules to allow more to qualify for public rental flats.

We have and will continue to review our rules from time to time. More importantly, let me assure the MPs, that in our administration of the rules, we will be sympathetic and responsive to those in need.

We set an income criterion of $1,500 per month, so that we can focus our help at the bottom 20th-income percentile. However, we do not apply the criterion rigidly. We go through each case, and are prepared to offer rental flats to those in financial difficulties, even if their income exceeds $1,500, like in the case of Mdm J earlier.

We have debarment for certain cases, to deter Singaporeans from cashing out on their HDB flat, depleting their cash proceeds and seeking further Government subsidies through public rental flats, thereby competing with those who really are truly needy.

Nevertheless, again, we have applied this rule sensibly and this does not prevent us from lifting the debarment to help victims of misfortune, or allocating them interim rental housing while they wait for their public rental flats.

As public rental flats are heavily subsidised, only Singapore citizen households qualify. We recognise the needs of low-income citizens with foreign spouses, and do consider them on a case by case basis, but the priority goes to Singaporeans.

We do hope that Singapore citizens planning to marry foreign spouses will also be responsible in planning and providing for their spouses, including their housing needs.

Often, it is easier to say "yes" than to say "no". Saying "no" can make us appear heartless and unsympathetic. We do administer our rules with a heart. However, while we try our best to help, we must be clear about the relative priority of different needs.

There will be instances where we have to be firm and say "no". For instance, a middle-aged couple approached HDB for a rental flat. They were not in financial hardship and had in fact just sold their flat and secured cash proceeds of almost $200,000. They could have bought a 2-room flat or Studio Apartment but chose not to. HDB was not able to accede to their appeal for a rental flat because there were obviously cases more deserving and truly needy compared to them.

Likewise, we have had cases of elderly couples seeking public rental flats because they do not want to live with any of their many married children.

The solution to their situation should start with exploring family support, and HDB facilitates by referring them to the Family Service Centre (FSC) for family counselling, should they face relationship issues.

Holistic support for vulnerable families

Fourth, we make sure that we help vulnerable families holistically and fundamentally, to prevent entrenchment and to help them get out of their problem situation. Rental assistance can only provide immediate relief to housing needs, but does not resolve underlying social problems.

We have to complement it with upstream social intervention, to support vulnerable families in employment, training, financial management and their children's education. This is to give them a leg up, and help them progress on to owning a flat when they are ready.

MND and HDB work closely with other Ministries, the local Advisers and social service agencies like the FSCs and CDCs on this. Mr Muhamad Faisal Abdul Manap suggested that HDB collaborate with Voluntary Welfare Organisations (VWOs) to assess housing appeals holistically and thoroughly. We agree, and HDB is already doing this.

For individual cases which have multiple social problems, HDB also participates in case conferences with other social agencies to jointly work out sustainable solutions.

Community initiatives can play a vital part too. Coordinated by the South East CDC, I piloted a scheme in my constituency mobilising local resources such as the grassroots and FSCs in the locality, self-help groups, resident-volunteers and HDB, to help vulnerable families with dependent children stabilise their situation and build capacity to cope.

These families are residing in interim rental housing, and as the House knows, this is housing for those with little family support and no housing options.

For each case, social workers work very closely with HDB officers to help the families chart out their respective housing pathways aimed at permanent housing.

Adults are assisted with relevant training and employment assistance to improve their income earning potential. Childcare needs are met to enable mothers to work.

Grassroots leaders befriend the families, ensuring that they attend monthly parenting workshops on budgeting and family development.

Residents in the neighbourhood volunteer to supervise the children in their homework on a nightly basis, while a self-help group provides heavily subsidized weekly tuition classes.

From crisis and vulnerability, we provide stability and hope to these families through support from the community and Government.

This scheme has been running for a year and we have reached out to 200 families in need, with two in five successfully moving out into longer term housing solutions. We are heartened by the progress and will continue to help more.

However, getting these families back onto the path of resilience cannot be achieved solely through the social support infrastructure that the Government and its community partners have put in place. It requires families to also take the initiative and responsibility in sustaining their own efforts.

Let me conclude that public rental flats provide a safety net that we hope these families see as a temporary safety net. The Government and social agencies together hold this net, to catch those who fall, and then with a stretch, help them bounce back. We will not allow anyone to fall through the cracks. But too much slack, and the net will only enmesh and entrap.

Thus, as we exercise flexibility and compassion, we need to guard against entrenchment and keep the hope of home ownership and progress alive for rental tenants.

Our job is not just to house, but also to enable and empower those who are in need, so that they can provide for a stable home and better future for their children.

If they are able to secure jobs with CPF contribution, grow their incomes, and build up their savings, in a sustainable manner, home ownership is or can once again be within their reach.