PAP Transformation Series – 18 suggestions to reform HDB

Leong Sze Hian, Alex Lew /

“Nothing’s sacrosanct in Government review of policies.”PM Lee Hsien Loong.

I would like to applaud the Prime Minister for his bold changes to the cabinet.

I believe what Singaporeans would like to see going forward is what changes will be made to address the myriad of issues raised in the elections.

As about half a dozen Ministers have said that the PAP needs to be transformed, I would like to make the following suggestions to review HDB’s policies:-

1) Remove the income ceiling of $2,000 for two-room flats, as it makes the simplistic assumption that every household earning more than $2,000 can afford a three-room flat, regardless of the family size, financial circumstances, etc.

2) Reverse the policy change to increase the rental for households earning more than $800 after two years, as a family earning between $800 and $1,500, may already be finding it hard to make ends meet.

3) Review the policy change requiring those applying for a second HDB Concessionary Loan to utilise half of the previous flat’s cash profits as well as the entire CPF utilised including acccrued interest, regardless of how long ago was the previous flat’s sale.

4) Review the policy change to permanently bar those who have sold two HDB flats from renting a HDB flat, as it assumes that one can never be in financial difficulty after selling one’s flat.

5) Review the policy requiring divorced couples without children to return their HDB flat to the HDB if the flat was purchased for less than five years, based on HDB’s valuation.

6) Review the Resale Levy which for example, requires a cash levy of $50,000 for those who buy a second new flat, regardless of how long ago the previous five-room flat was sold.

7) Give priority to needy Singaporeans for rental flats, instead of having a HDB joint-venture private company to rent HDB flats to non-Singaporeans for profit.

8) Review the cash-over-valuation (COV) policy to allow banks to lend the COV amount as well subject to say a five per cent valuation cap, as I know of no country in the world that places such a huge financial obstacle to public housing ownership, particularly for the lower-income who may have more difficulty coming up with the cash COV.

9) Disclose the breakdown of the costs of building HDB flats. Consider gradually shifting the current Market Pricing Subsidy policy to a more balanced Cost-Plus Pricing policy like in the 1980s and before. The fact that it will take about 10 years for a new flat to be available in the resale market because of the BTO construction time and the five-year Minimum Occupation Period (MOP), may have a minimal effect on resale prices, and moderate price increases instead.

10) Review the policy requiring divorced couples to re-finance their HDB loan even when the court order results in one of the divorced spouses to keep the flat with his or her children. This may cause undue hardship, as the ability to take another housing loan is re-assessed. The existing HDB loan should be allowed to continue.

11) Review the very high 10 per cent penalty for engaged couples who want to withdraw their application as they do not wish to be married.

12) Review the current Build-to-order (BTO) policy of reserving 95 per cent for first-timers, and an unknown percentage for grassroots volunteers, as it makes it very difficult for second-timers such as those in financial difficulty or down-graders to ever get a new flat.

13) HDB Annual Reports’ ‘applications for financial assistance approved’ statistics, have disappeared from its 2005/2006 Annual Report onwards. These statistics should continue to be published.

14) Publish the statistics on the following:- How many HDB bank loans are in arrears over three months?

15) How many HDB bank loans have been foreclosed by banks?

16) How many foreigners and PRs in total are staying in SERS (Selective En-bloc Re-Development Scheme) HDB flats, former JTC, SIT, etc, flats as rental tenants?

17) How many Singaporean siblings below 35 successfully applied to buy HDB resale flats under the former ‘siblings’ policy which was terminated in March 2011. How may PR siblings have successfully applied?

18) How many HDB households were unable to pay their Service and Conservancy Fees (S&CC) in a year? How many have been charged in court for not paying, in a year?

I would like to urge and call upon all public housing stakeholders to work with and support our new National Development Minister, Mr Khaw Boon Wan, to reform our public housing.

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