The Housing Board is ramping up its supply of rental units to 60,000 by 2017, up from its current stock of 50,000, to meet growing demand.
But at the same time, Minister of State for National Development Maliki Osman disclosed that fewer than half of those who apply for rental flats are eligible for them.
In 2011, the HDB received 23,900 applications and found 13,700 did not qualify as they were able to buy a small flat or had family support.
HDB, he said yesterday, has to make sure that help goes to the truly needy.
But it will exercise flexibility on the eligibility criteria where there are genuine hardship cases, he added in his reply to Mr Zainal Sapari (Pasir Ris-Punggol GRC).
Dr Maliki also said that in 2011 and last year, 630 families living in rental flats were able to move into HDB homes they had bought.
The Government gives low-income families up to $60,000 in grants to buy a flat.
Still, the average length that families stay in rental units is 11 years.
To a separate question from Non-Constituency MP Gerald Giam, the Ministry of National Development said in a written reply the waiting list for rental flats is 1,900 applicants long. The average wait is 7.5 months for a unit.
On the policy of ethnic quotas in HDB estates, Dr Maliki said in Parliament that the Government will not lift the requirement for sellers struggling to find a buyer from the stipulated ethnic group.
Rather, it will provide financial aid to support owners who are short of money to pay their mortgage, he said.
But such cases are rare, he told Mr Hri Kumar Nair (Bishan-Toa Payoh GRC), as only 11 per cent of HDB neighbourhoods - 18 in all - are affected by the ethnic limits. There are about 160 HDB neighbourhoods in total.
HDB data shows sellers are usually able to get buyers of the required ethnic group because of the large volume of resale transactions annually, he said, noting that the bulk of these flats are sold at or above valuation.
When Mr Nair said he has a resident who has received no offers from persons of the relevant race in eight months, Dr Maliki responded that "oftentimes, it's in relation to the kind of prices they are prepared to receive".
"The (ethnic quota) alone is not one of the key factors in whether the person is able to sell the flat," he said. "We recognise that some face more challenges than others, but by and large, our data shows it is not impossible for them to be able to find buyers of the (stipulated) ethnic group."