The Online Citizen

Rental discrimination in Singapore: Why it happens

Rental discrimination in Singapore: Why it happens
May 04
14:51 2014

By Jeremy Chen

On 2nd May 2014, The Online Citizen posted an article titled “End discrimination in rental market, President & PM urged wherein it was reported that the president of the Nevada-based Universal Society of Hinduism (USH), Rajan Zed, called on the Singapore government to “put an end to blatant discrimination reportedly prevalent in the rental housing market of Singapore.

Rajan’s statements may be readily interpreted as an accusation of racism. Even if they are not, it is useful to make sense of rental discrimination, which obviously exists, and consider more rigorously what is behind the phenomenon.

I would like to argue that the main driver of rental discrimination is economics. But before moving on, let me attempt to be more precise. Broadly speaking, discriminatory behavior based on stereotypes are driven by answers to questions like the following:

  1. Will non-discrimination hurt me and my loved ones physically? What is the likelihood of various kinds of harm?
  2. Will it hurt me and my loved ones economically? How likely is it? How likely is X-dollars in damage?
  3. Can I not accept that they look different from me?
  4. Can I not accept that they live different kinds of lives?
  5. Do I despise them for having less money than me?

I’m attributing rental discrimination to dominantly to people asking question (2). Subsequently, I hope to describe this in greater detail.

Personally, I think discrimination on the basis of (1) or (2) is morally different from discrimination on the basis of (3), (4) and (5). It is for this reason that I refuse to condemn those who practice rental discrimination. I do not like it, but I am conflicted over the matter because I don’t see it as entirely wrong. I believe that landlords’ answer question (2) sincerely, because it is in their interest to be as accurate as they can be. Can we fault them entirely for sincerely held fears?

Since some find this to be an emotive topic, I hope to be clear on what I am saying. To say there is no racism on the lines of (3), (4) and (5) among Singapore landlords is naive, but to claim that it is the dominant cause or even a major one without justification is insulting, naive and wilfully ignorant.Justifying the claim that many Singaporeans give up rental income on the basis of disliking another race/nationality for irrelevant reasons (as in questions (3), (4) and (5)) rather than doing so for more tangible economic reasons demands a more substantial burden of proof than mere “say-so”. I believe that most landlords are ultimately renting their houses for the money and would rent to almost anyone if the relevant (perceived) risks are covered.

Economic Risks of Bad Tenants

Though I said mere “say-so” is far from the gold standard of argument, let me begin with a personal anecdote, because personal anecdote is a major driver of the economics in this setting. I have personally seen (and smelt) the effects of tenants that are not “house proud”.

In one instance, the “scrubbing” and refitting was worked on by a brother-sister pair for over two weeks before the family moved back in. It was nasty. One readily obtains accounts of such horror stories where the safety deposit fails to cover the direct expense in time and money for remediation of breakage, significant wear, lasting odours, stains and a host of other forms of damage. And that does not even cover “rental downtime” when the property cannot be viewed and generates no rental income. (See, for instance, the comment threads here on the TOC’s facebook)

One other danger that is pertinent to owners of HDB flats is illegal subletting. HDB has clarified that the onus is on flat owners to ensure that no illegal subletting occurs (read here). Furthermore, the law is very clear on the point that “the one who will get into trouble is the flat owner” and though “[he] doesn’t have to do checks”, if the law is violated, “[he] cannot say that [he] doesn’t know.” (link)

First-hand accounts of such occurrences (especially in the former category) are common, and it is not exceedingly rare to hear first-hand accounts of such occurrences from trusted friends. What is the upshot of this information being passed around? It reinforces the notion that renting property, though providing income, can be risky. Now, this conclusion is not based on mere “say-so”. Rather, part of it points to the fact that anecdotes shape perceptions of risk, and perceptions of risk shape behavior.

Landlords’ Response

Risk-averse landlords respond by either requesting high safety deposits or even setting exclusionary clauses to avoid perceived “high risk tenants” entirely. The most emotive lines are drawn by ethnicity or nationality because of perceptions that such groups are “not house proud” and are likely to cause damage that requires the landlord’s time and money to remediate, and renders the property un-leasable (and un-viewable) in the interim. But there are also landlords who choose to not to rent to younger Caucasian singles due to fears of debauched house parties. (On the positive end, Caucasian families are regarded as the best tenants although they can be the choosiest.)

What Now?

Rental discrimination seems to be dominantly a strategy by which income seeking landlords attempt to manage risk with only imprecise information to work with. Where there is non-negligible risk of negative externalities, the risk should be properly priced. But simple market logic would lead to different (discriminatory) rental deposits for different groups because groups viewed as “less risky” would be able to get leases with lower deposits (and groups viewed as “more risky” would have to settle for higher deposits).

The unfortunate fact is that there are few reliable signals for a landlord to accurately predict whether a tenant will be good or bad. Perhaps the only signals that might be used are “whether a prospective tenant seems considerate”, “whether a prospective tenant seems educated/cultured”, as well as ethnicity and nationality. That means that “racial/nationality-based discrimination” occurs because there are no better signals (as perceived by landlords) of whether a tenant would be “good” or “bad”. Unfortunately, there is no reason this will change any time soon. It is necessary for the diffusion of rental horror stories to abate.

Will certain ethnicities/nationalities have to choose between exclusion and higher deposits? This does not seem to be right. Furthermore, high deposits put tenants at risk, and that is also an emotive issue for some.

Protecting Tenants Deposits: Binding Arbitration

When I put forth the position that rental discrimination was more about the economics and not “racism”, I got one angry response that I felt was unreasonable. But it seemed that a lot of the anger with the “externalities must be priced” position came from her experience as a tenant. She said that Singapore does not protect tenants from landlords. She said “we are at the mercy of being duped out of the deposit every time we move for the stupidest made up reasons”. This is a real concern if safety deposits get higher. Tenants should be protected against unscrupulous landlords, who certainly do exist.

One solution is to provide education for renters, possibly through HDB rental paperwork as a start, to inform them to be careful to take note of “existing defects” and have them acknowledged by the landlord. A complementary solution would be binding arbitration. With binding arbitration, an impartial party is given the authority to determine the incidence of fault and appropriate cost of damage. In combination, tenants gain the protection they need. This way, deposits (and higher deposits) will no longer a big risk for tenants.

(Note: The reason I prefer higher deposits plus education and binding arbitration is that landlords will largely remain around to deal with legal issues. Tenants, especially foreign tenants, are flight risks. Sad but true.)

Being Grounded and (More) Precise in What We Say

In this piece, I talked about how stereotypes relevant to rental cause the bulk of differential treatment. This is unfortunate and somewhat distasteful. But if this screening were forcibly not allowed, the question is whether landlords sincerely believe they would suffer economically. My sense is that those with “skin in the game” (for whom rental income is a substantial fraction of their income) would answer “Yes”. The reality is what it is.

The fact is, it is hard to see how stereotypes irrelevant to rental play any substantial role in most differential treatment.

Therefore, in rental, I believe that racism/xenophobia, as defined above, does not play a significant role. In spite of the (unfortunately widespread) existence of casual racism, there is nothing that suggests it factors much into landlords’ calculations. Far more credible is the proposition that the connection between race/nationality and discrimination is mediated by perceived risk on the part of landlords. The arguments above should make more credible the hypothesis that rental discrimination has a primary basis in economics. It is not a nice reality.

Discrimination in rental is an issue — a very touchy issue. But let’s have a grounded discussion.

  • jessie

    The advertisements having racist comments should not be put up by agents. The Council of
    Estate Agents should have taken action earlier. Landlords just want a Tenant who will pay their
    rent on time and return the property back to them “in good state and repair in the original condition save wear and tear.” The race of the Tenant should not make a difference except that
    in today’s market there are many PRCS and Indians whose cleanliness and hygiene may not be to the level we are used to in Singapore. Many Landlords also get back their appliances and furniture damaged and the deposit is not enough to cover. In the late eighties and early nineties there was the same problem with the Koreans . Many Landlords preferred Japanese Tenants and did not want Koreans on the lower rental income group because of the same problems. A clause can be included in the Tenancy that the Tenant pays for cleaning twice a week and shows proof of signing a contract with a cleaning company to the Landlord,

    • AngCherLing

      Very good suggestions!

      • jessie

        Thanks Ms.Ang CL

  • nelsonmandala

    sometime in live..siblins get angry simply by lookin @ anda siblin face in the same roof…
    when we becom adults and owned a pad, the tenant we r lookin for muz be on par/comparbilty with our style of the same roof when u start earin different accent or lingos in which u dun really understand will pissed u off..let alone the tenants who sing and watched tv in their owned room in their owned lingos..when i was in london my co-sharers is angmor and their style is entirely different from mine…so race does MATTER

  • yevets pay

    I agreed with the writer. The last tenant I have is a PRC PR. When I took back the flat, the condition is just not bearable. The ceiling boards were missing or broken, the electrical wires run across the flat all over the place, illegal partitioning and shower room and broken windows. The condition of the toilets is indescribable. It takes more than a month to fixed the flat into bearable condition for prospective tenants to view and at least a few thousand dollars to repair. Lost of rental income for at least 2.5 months.

    It is not discrimination of race or religion. It is purely money.

  • Alan Smithee

    This is discrimination based on race. The reasons you stated attempts to form a basis for racial discrimination, which is an interesting perspective. However, as far as racism and stereotyping is concerned, the same reasons can be given to a white family not wanting to lease an apartment to Black or Native Americans in the US, since there is a higher prevalence of crime amongst these racial groups. The supporters of the Confederate States during the American Civil War comprised of many farm owners, many who owned slaves and would be economically devastated if their labour force ceased to exist due to the abolishment of slavery. In our case, we prejudicially assume that a certain group will exhibit a certain set of behavior based on race. Is this, by definition, is racism as we are discriminating based on race, whether the reasons are economic or social. It is a thorny subject, but one that rightfully should be discussed.

    • jessie

      Alan Smithee, Singaporeans are multi-racial, that is our heritage and we are proud of it.
      It is just identification of the Tenant. Please don’t read more to it.

      • anonymous

        Alan probably isn’t aware of the differing chasms of hygiene outside US. Some tenants might be used to “pooing” on the floor (as was done in their villages) even though modern sanitation facilities is available. Sorry for being crude here but you won’t believe it until you read about it!

  • sultan22

    Agreed. In the past, I was never purposely conscious of their presence. If someone told me he is from another country, I just listen one ear in one ear out. After what happened in the last 10 years, I have become anti foreigners because their very presence rob me of my living space and they pollute it with their filthy bad habits. Maybe they will say, we are like that, this is what we do and how we live in our own country. Fine! But I don’t intend to have my country become another India or China.

    • MArcelo

      Bravo! Well said!

  • sultan22

    The best thing is not to rent to anybody. If foreigners cannot find accommodation, they will stop coming. Construction workers and other lowly salary workers is not the problem because their company provide dormitories and even transport to and from work. The pests are those who rent HDB and take MRT and cause all the jams. They are the one who are stealing our jobs. But its easier said than done to say don’t rent to pests. A lot of sinkies need the money and somewhere someone out there will still rent.

    • Herry Thomas

      you illiterate man, you study and learn first then sure will get job one day

    • yourmother

      Well you sure do sound stupid here. You can’t stay competitive and you rant about them coming over to steal your jobs? If you are good enough, there’s no reason why Singaporeans can’t be employed. Its a globalized world knows no boundaries now. Big companies are setting hubs in Singapore because Singapore is deemed to be competitive and that made Singapore prosper (read: you stealing the jobs from the originating countries). If you would like to feel privileged and win without having to put up a fight, its best for you to move to Malaysia cause this is exactly how the Malaysian government operates – instead of innovating to grow, they cut off competition.

  • sultan22

    Some Indian ft big shot complain to pm and president about this….his countrymen come to Singapore and get fatty pay but discriminate locals for jobs he pretend not see..
    Indian ft made such bad reputation living in other people he/she..not shameful and yet complain….
    made me recall an Indian ft boss say local food is junk and think this country owe him a living….the entitlement mentality and yet Singapore has to bow and obey…seems all is the same….hypocrite and discriminatory but quick to pick on daft Singapore and exploit the situation..

    • Rentier

      Landlord wants returns on his investment. It is well known the behavior of certain nationals inflicting heavy wear and tear. The landlord is only protecting himself – don’t turn everything into a race or religion issue. Geez!

  • sultan22

    No house for rent to the foreign Indians and PRC ?

    I certainly hope these landlords help Singaporeans to kick out these foreign Indians and PRC as much as possible, the Filipinos and others included.

    • Herry Thomas

      duffer sg man..your Singapore’s economy is being stable just because these foreigners and tell me, what knowledge & talents have you fucking small eye people.

      • nelsonmandala

        these small eye people MPLOYED u for a start and the same small eye government let u worked ere as well
        u still hav to KOWTOW to so many small eye peoples..u dunt feel SHY mey?

      • Arnold_Chong

        Are you too daft to see the irony in your comments?

        You are here precisely because there are no jobs available in your 3rd world country.

        Please don’t tell us that your reason for working in Singapore is purely for altruistic purposes.

        If that is the case, aren’t you a traitor to your motherland?

        Coming here to bring prosperity to Singapore while your homeland remains mired in squalor.

        Spare us the BS.

        Singapore was a thriving economy when you arrived here begging for a job because your country cannot provide you with a job.

      • nicnacnoe

        अपनी माताओं योनी बकवास

    • yourmother

      Oh you hate foreigners? Why don’t you kick out all the foreign Indians and PRC, AND ALL OTHER FOREIGNERS AND THEIR BUSINESSES and see whether you can still prosper. Dumb fuck

      • Arnold_Chong

        Singapore’s economy was growing at 8 to 10 per cent before the arrival of foreigners.

        Now, growth is just a measly 2 to 3 per cent despite the import of more than 100,000 foreigners a year.

        Productivity is falling drastically and billions of dollars are spend on infrastructure each year to ease the congestion caused by the rapid influx of foreigners.

        Billions of dollars which could have been used to improve the lives of Singaporeans.

        Please get the facts right.

        Foreigners are here only to shore up the support of the incumbent political party which has lost the confidence of Singaporeans.

      • nicnacnoe

        अपनी माताओं योनी बकवास

  • WT

    Not all PRC or Indians are the same (yevets pay). And shame on those equally racist comments; two wrongs don’t make one right (sultan22, Henry Thomas)