The "Two-Room Flexi" scheme crafted by the Housing Board represents a useful refinement of the "last mile" delivery of cradle-to-grave public housing options for Singaporeans. Seniors who wish to sell a flat to fund their retirement can already buy studio apartments with a 30-year lease and cheaper price tags or two-room flats with a 99-year lease. The new scheme, on which the public is being consulted, aims to merge existing programmes by allowing those above 55 to apply for two-room flats with a choice of shorter lease periods ranging from 15 to 45 years.
Greater flexibility is a boon to asset-rich but cash-poor seniors who might fear outliving a short lease and yet want to extract as much as possible from their current flats, which could have doubled in value since 2006, based on the Resale Price Index. Any over-enthusiasm would be moderated by the supply of Build-To-Order two-room flats, the prices to be set for shorter leases, the reluctance of the aged to move out of familiar neighbourhoods, or a desire to leave a legacy for kin.
Under the flexi scheme, buyers must choose a lease that will last them and their spouses until they are at least 95 years old. Guarding against poor judgment and any abuse of public benefits paid for by all taxpayers will always be a challenge, given that eight in 10 of the resident population live in HDB flats. If sale prices are low and there are no resale restrictions, would some be tempted to cash out after a few years? That would defeat the purpose of the scheme which is to help ensure the housing needs of seniors are adequately catered for, especially as they form a growing proportion of the population.
One must also treat with caution recent calls to allow third-timers to buy subsidised two-room flats, perhaps by scaling up the resale levy that is now payable on the second subsidised flat (with some exceptions) to help ensure a fair allocation of housing subsidies between first- and second-timers. It would be prudent to let the new scheme settle before widening its scope. However, it's worth considering if current owners of studio apartments, which have only a fixed 30-year lease, ought to be allowed to extend their leases, taking into consideration their ages. Since studio apartments cannot be sold on the open market, those with longer life spans might incur what some call "unnecessary transaction costs" should they opt to return their apartments to the HDB and buy a two-room flat under the new scheme.
Against the broad implications of elder housing, including optimising the dynamic of supply and demand, one aspect of the initiative all would welcome is the scope for seniors to live in the same block as young families who buy two-room flats. The present approach of building an entire block of studio apartments for elders goes against the grain of inclusive living so often extolled.
