Boost pool of public rental housing to cater to changing demands: WP MP Louis Chua

MP Louis Chua called on the Government to create a viable and expanded public rental scheme so that people can choose to rent instead of own HDB flats.
MP Louis Chua called on the Government to create a viable and expanded public rental scheme so that people can choose to rent instead of own HDB flats.ST PHOTO: KEVIN LIM

SINGAPORE - Home ownership is more of a preference and not a superior option to renting, and the Government should significantly increase its stock of rental flats across all flat sizes to cater to the changing aspirations of Singaporeans, said Workers' Party MP Louis Chua (Sengkang GRC) in Parliament Tuesday (Nov 2).

He called on the Government to create a viable and expanded public rental scheme so that people can choose to rent instead of own Housing Board flats.

But Senior Minister of State for National Development Sim Ann said mainstream rental represents a significant departure from Singapore's public housing policy and principles, and could reshape social norms and weaken communities.

"Because unlike home ownership, where people sink their roots, rentals are more transitory. This is not something we will embark on lightly without deep consideration," she noted in her reply.

Mr Chua had made the proposals in an adjournment motion - which allows MPs to delve into a topic of their choice for 20 minutes - on the topic: Beyond home ownership: Supporting diverse aspirations through rental housing.

Based on the HDB's latest annual report, there were 63,773 rental flats as at March this year compared to 1.02 million sold flats.

Of these rental flats, some 97 per cent are one-room and two-room flats rented out through the Public Rental Scheme and Interim Rental Housing Scheme, to help those with no other housing options, noted Mr Chua.

The rest are offered through the Parenthood Provisional Housing Scheme for couples who need interim housing while waiting for their Build-to-Order flats.

Noting that these schemes are oversubscribed, Mr Chua said supply was simply insufficient to meet current demands.

He said it takes five or six months to get a rental flat, and the HDB had told a WP MP it is facing an island-wide shortage of one-room flats.

He suggested that the Government should also expand its public housing rental scheme to cater to the wider population and not just to those who cannot afford public housing.

HDB could work with private developers to come up with Build-to-Rent housing, and price the rentals for such flats between HDB public rentals and HDB open market rentals, he said.

Describing it as "simply just a shift from a home ownership subsidy to a home renting subsidy instead", he added that the rental flats could also be restricted to Singaporeans.

Among other benefits, it would provide more housing options to Singaporeans, such as single millennials, who are increasingly choosing to move out of their family homes into co-living properties, and young couples who may want to start families before they can afford a home, added Mr Chua.

An expanded public rental housing scheme will also have the additional benefit of helping to get rid of the stigma of HDB rental housing, he said.

"Renting an HDB flat need not and should not be seen as a sign that you are poor and needy, and our position on rentals needs to reflect that," he added.

In fact, it is a misconception that home ownership is inherently superior to home renting, he said.

Citing Switzerland and Germany, which have home ownership rates of less than 45 per cent, he said the two European countries have among the highest gross domestic product per capita and Human Development Index scores globally.

He also suggested that the Government could set up a real estate investment trust, or Reit, to hold the stock of HDB rental units, and then allow Singaporeans to invest in these Reits, as an alternative way to own HDB flats.

In her response, Ms Sim said home ownership has been the cornerstone of Singapore's public housing policy, and a key tenet of the country's social compact.

The rental housing options provided currently by the HDB are to help those who may not be quite ready for home ownership and who may require additional help and support, and are therefore highly subsidised.

Such rental options are thus very targeted, she said.

She added: "Our aim is to help households in public rental eventually achieve home ownership as well."

Acknowledging that changing societal trends may reshape how people perceive home ownership, she noted that the HDB had also been flexible in catering to such needs, such as through the singles and two-room flexi schemes.

While it is common to see young people renting their own apartments in big cities around the world, said Ms Sim, this is largely not subsidised and subject to market forces, and reflects different social circumstances.

The rent that they pay is a consumption expense and could have gone into home ownership if that was within reach. Many of these people end up renting for life, without public housing subsidies that support home ownership, she added.

"We see the provision of a subsidised rental option as a means towards achieving home ownership, because we believe in the benefits that home ownership brings to Singaporeans," she said.