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The government should substantially increase the supply of HDB rental flats.

TOC Editorial: A question of supply

HDB should invest more in low-income housing

The news last month that two HDB blocks in Toa Payoh – previously slated for redevelopment – have been converted to dormitories for foreign workers employed by Singapore’s new integrated resorts have unsurprisingly triggered some consternation.  Dissenters groused that the government was once again prioritising foreign workers at the expense of low-wage Singaporeans, who face the unsavoury prospect of homelessness given the acute shortage of HDB rental flats.

Indeed there has been anecdotal evidence to suggest that homelessness in Singapore is on the rise.  TOC had earlier reported on a community of the homeless in Sembawang Park, a situation that appears to be mirrored in other parks such as West Coast or the East Coast.  Such families were usually forced into residing in parks after having their applications for HDB rental flats turned down.  One particularly wrenching case was that of a single mother, seven months’ pregnant, who had been camping out in Sembawang Park with two young children for the past three months after having her application to HDB rejected.

These developments suggest a failure of government planning on two fronts.  The first is that perennial bugbear, an inability to provide sufficient housing for the large foreign worker population.  This has spilled over into the kind of abuses that Singaporeans have unfortunately grown inured to, such as workers being squeezed like sardines into unhygienic dorms.

The second is that the government has simply failed to provide enough rental flats for low-income groups. A report by the Straits Times on 20th June 2009 stated that while 300 applicants join the queue for rental flats each month, only about 150 people return flats in the same period.  As of February 2009 the average waiting time for a one-room flat was 19.5 months, almost five months longer than in December 2007, while the wait for a two-room flat was 15 months, five months more than in 2007.

The government’s excuse was that most of the applicants did not appear to be in financial difficulties and it responded by tightening the rental criteria further.  That does not seem to be borne out by the plight of the homeless, unless one tries to argue that such families are trying to economise on their housing costs.

Furthermore, there are about 200,000 households with less than S$1,500 in monthly income, far more than the 42,800 rental flats in total meant for households at that income level.  Even if one assumes that most of those households own the flat they live in, given the lack of a social safety net surely there should be a large buffer of rental flats to hedge against the situation where those households fall on bad times and are forced to sell their only asset.

The reality is that low-cost housing in Singapore is becoming an increasingly scarce resource, and that adding foreign workers to the mix will only tax it further.  HDB has to invest more in building rental flats aimed at low-income Singaporeans, barring which it should provide them with subsidies and vouchers to enable them to afford rental flats in the open market.  HDB should stay true to its founding purpose: to provide affordable housing to Singaporeans.  Otherwise Minister for National Development Mah Bow Tan’s recent remarks that Singaporeans will benefit from the rising prices of their HDB assets will sound increasingly hollow to low-income Singaporeans.

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