Govt should provide HDB flat owners with affordable 99-year lease renewal after 50 years: Nonpartisan experts publish proposals on housing policy

The Government should provide Housing Development Board (HDB) flat owners with an affordable one-time top up of the 99-year lease after 50 years, according to three industry experts and academicians from ground-up imitative, Future Of Singapore .

In their public housing policy paper Addressing Singapore’s Key Housing Problems: Asset Protection, Affordability and Access, Chief Executive Officer of International Property Advisor Pte Ltd Ku Swee Yong, veteran architect and adjunct professor at the National University of Singapore Tay Kheng Soon, and ex-GIC chief economist and adjunct professor at the Lee Kuan Yew School of Public Policy Yeoh Lam Keong also mooted three other proposals to the potential problem of the depreciating value of older HDB flats and the crisis of finding affordable public housing or security of tenure, including:

  • Providing HDB flat owners with an affordable 99- year lease top up after 50 years;
  • Funding the rebuilding of HDB flats after 100 years;
  • Matching BTO and retirement flat prices closely to their construction costs; and
  • Providing sufficient decent-sized and affordable rental flats for lower-income Singaporeans.

Providing HDB flat owners with an affordable one-time 99-year lease renewal after 50 years will immediately remedy the issue of the depreciating value of flats nearing the expiry of their lease.

“This immediately addresses the problem of declining residual values of old HDB flats with short remaining leases,” the paper read, adding that the lease top-up “should be automatic” and should be provided “at an affordable fee”.

The Singapore Land Authority (SLA) however, should retain land ownership and reserve the right to redevelop the flats at any time via the HDB should it wishes to do so.

Affected owners must then, in such cases, be compensated with a flat of equivalent use value and location — similar to the provision under the current SERS — in order to safeguard the quality of housing provided to HDB owners.

A base guideline fee for lease renewal of around 3 per cent of the average market value of a new resale HDB flat was suggested “for those who are able to afford it”.

“This works out to around $15,000 for an average 4-room flat priced at $470,000 and $10,000 for an average 3-room flat priced at $350,000.

“This lease renewal fee can be made payable over 10-15 years with no interest and, thus, made universally affordable like HDB upgrading.

”However, smaller, nominal affordable fees as low as 10% of this guideline price can be charged for the lease renewal on a means-tested basis to make it affordable for low-income owners and retirees,” the academicians proposed, adding that only citizens should be able to qualify for such a lease renewal.

Govt should finance deconstruction and reconstruction of HDB flats every 100 years; S’poreans should bear housing costs during period of rebuilding

The experts also cited findings from Prof Tays research, in which he found that reinforced concrete structures become “structurally unsound over this longer time period” in reference to the deconstruction and reconstruction of HDB flats every 100-150 years.

Consequently, the experts proposed that the Government should bear the costs of tearing down and rebuilding said flats “once they reach 100 years”.

Doing so, they opined, will ”enable HDB owners to have ownership rights beyond 99 years without incurring punitive rebuilding costs”.

“We accordingly propose that every HDB flat purchased by a citizen be guaranteed under a scheme, in which the cost of rebuilding is borne by the State, and a new flat with equivalent environmentally sustainable quality and comfort be returned to the owner every 100 years of the HDB flats’ life.

“A fresh lease of 99 years should also be given to the existing owner upon completion of this necessary rebuilding, thereby ensuring continuity of housing provision as a social good,” they added.

“This would be equivalent of having all HDB flats effectively being guaranteed a SERS program near the end of their 99-year lease.”

The experts suggested that Singaporeans should bear the cost of housing during the rebuilding period, as the Government will bear reconstruction costs.

Permanent Residents will not be eligible, and will be required to fund the full reconstruction costs of the new flats, unless they surrender the remaining lease of the flat to the HDB under existing lease buyback or under compulsory acquisition guidelines, they emphasised.

“With these proposed policies on affordable 99-year lease top-ups and effectively free rebuilding, all older HDB flats are likely to maintain value or see a rise in value depending on whether regular maintenance and upgrading managed to prevent excessive physical deterioration.

“Both the value and security of tenure of all HDB leases will thus be largely protected from ageing”, according to the academicians, and the flats will “become a real store of value for retirement or bequest to successive generations”.

“New entrants into the public housing system, and resale for downgrading during retirement or for asset division on death ensure HDB property ownership does not ossify and has sufficient turnover to enable social mobility,”

”Equally important, the net worth and life savings of the bottom 50% of income earners (whose 3- and 4-room flats form the bulk of their net worth) will be protected for the lifetime of the owners even before rebuilding, thus contributing significantly to their pension adequacy,”

The proposals, they said, will help “sustain affordable, high quality housing for future generations of citizens and HDB owners”, which will result in “lower unnecessary investments in unproductive capital, leading to more buoyant growth from higher household consumption and both public and private investments”.

Renewing the HDB housing stock every century, according to the experts, will ensure that “the most modern and convivial design of integrated townships” will be available to Singaporeans and existing HDB owners “in perpetuity for generations to come”.

Govt should provide “sufficient stock” of affordable and high quality subsidised rental flats for bottom 30 per cent of income earners in S’pore, especially in the era of the “gig economy”

The experts also proposed that HDB should also ensure “a sufficient stock of transparently means tested, affordable, good quality subsidized low rental flats” for the bottom 30 per cent of wage earners in Singapore, as the income group are unlikely to obtain “sufficiently secure long term employment to afford and service a mortgage even for 10 years”, especially in an “increasingly unstable gig economy of the future with a much higher likelihood of technology-disrupted unemployment”.

“While the total cost is large, the annual cost is fiscally very affordable and would amount to a sustainable recurrent investment in the economic security, well-being and prosperity of our citizens unequalled anywhere else in the world,” they claimed.


Singapore can “comfortably afford these reforms principally” due to the Government’s ownership of freehold rights to over 90 per cent of land via “past compulsory acquisition”, according to the experts.

The land reforms made by the government is unequalled anywhere except China and North Korea. Because of the “heavy lifting” done, the government can easily sell public housing at construction cost of around S$180 per square foot, said Mr Yeoh in his presentation.

The nation’s “large structural fiscal surpluses and strong reserve management capability” are also among the key elements that will make their proposals “eminently affordable and fiscally sustainable”,  the experts opined.

“In the face of growing retirement inadequacy with a rapidly ageing population, increasing economic and employment uncertainty as well as inherently expensive housing due to our limited land size, it is time we capitalise on these fiscal, public land ownership and organizational strengths to reform out-dated parts of public housing policy so that public housing may achieve its full potential for the common good,” they concluded.

A member of audience asked if there is an alternative to implementing the proposed reforms, while seeking to understand the crucial aspects of the proposal that it cannot do without.

He also posed an enquiry on the cost of alternatives or the implementation of a different proposal in reference to Mr Yeoh’s prediction of an impending housing crisis.

In response, Mr Yeoh said that the most obvious counter-argument to the reforms is “do nothing”, which is a recipe to crisis.

As for other alternatives, he cited the models introduced by the Workers’ Party (WP) and the Singapore Democratic Party (SDP).

Mr Yeoh went on to stress the importance of having an informed, researched, and well-considered debate to address the key issues that underlie what Singaporeans desperately need, despite the differences in the respective housing policy reform models.

The three experts also emphasised that their proposals are “nonpartisan” in nature, and that they are happy to have any political party take up their suggestions, especially the ruling party as it is able implement the proposals immediately, given the rapidly shifting state of the economy and the ageing HDB properties.

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