Budget debate: Limiting resale buyers, longer MOP among ideas for prime BTO flats

The Government is looking to build future HDB flats in prime locations such as the Greater Southern Waterfront (pictured).
The Government is looking to build future HDB flats in prime locations such as the Greater Southern Waterfront (pictured).ST PHOTO: LIM YAOHUI

SINGAPORE - Limiting the pool of resale buyers or imposing a longer minimum occupation period are some ideas being looked at for future public housing projects in prime locations, said National Development Minister Desmond Lee on Thursday (March 4).

Another suggestion for a new housing model being worked on is to implement restrictions on home owners when renting out these flats.

This is to ensure that public housing remains inclusive for all Singaporeans, he said, during the debate on his ministry's budget in Parliament.

The study comes as the Government looks to build future Housing Board (HDB) flats in prime locations such as the city centre and the Greater Southern Waterfront.

But while it is vital to ensure that these estates remain affordable and inclusive over time, the ideas under study for the new housing model come with a set of complex problems.

"For instance, they may exacerbate the burden on homeowners who run into unforeseen circumstances or financial difficulties," said Mr Lee. "So it is a balancing act, and we are studying the possibilities carefully."

Some have also pointed out that ultimately, there is no certainty that measures suggested will work to ensure flats remain affordable, he said.

Still, at the heart of the policy is the priority to keep Singapore's public housing estates inclusive and accessible to Singaporeans, Mr Lee noted.

If left solely to the private market, prime areas such as the city centre and the Greater Southern Waterfront would likely be used for "exclusive, high-end housing developments that only the rich can afford, given their attractive locations", he said.

Mr Lee cited New York City and Hong Kong as two examples where housing is much more expensive in certain choice neighbourhoods compared with others, and where the average family either pays high rents to live in prime locations or moves further out of the city.

"There are very powerful social and economic forces at work that drive stratification and gentrification of such cities that can divide communities. But we are determined to resist them, so that our society does not become fragmented over time," he said.

He was responding to Ms Nadia Ahmad Samdin (Ang Mo Kio GRC) who asked for an update on public housing plans in prime locations.

For upcoming public housing estates in prime locations, Mr Lee reiterated that a diverse range of flat types will be built where possible. This would include rental housing, so that lower-income households can also benefit.

The new housing model will provide additional subsidies, on top of the existing subsidies for Build-To-Order (BTO) flats, said Mr Lee.

But he acknowledged that the additional subsidies may also raise some issues, such as more capital gains for owners when they sell their flats on the open market.

"We may need a way to recover some of the extra subsidies provided for flats in prime locations... In short, as a social policy, we have to act against the instinct of the market," he said.

In the meantime, the Government will continue to engage Singaporeans on their views and suggestions on the new housing model, he added.

Mr Lee also assured the House that the HDB keeps a close eye on housing demand and calibrates flat supply accordingly, in response to Progress Singapore Party (PSP) Non-Constituency MP Leong Mun Wai who had expressed concerns about possible shortages in housing supply.

Demographic and socio-economic trends, prevailing market conditions and the supply of resale flats on the market are taken into account when planning for new flat supply, added Mr Lee.

But he noted that the Government's approach to public housing goes beyond matching supply to demand, and putting a roof over Singaporeans' heads.

"Public housing is also an integral part of the social fabric that keeps our nation together… When we live next to diverse neighbours along the same corridor or in the same HDB estate, we share common experiences and we grow a sense of community," he said.

It is this community spirit that the HDB's Ethnic Integration Policy (EIP) is based on, he added, acknowledging that it is a "unique" and "intrusive" policy that is "almost impossible to replicate elsewhere".

The scheme plays an important role in promoting social integration by ensuring a balanced racial mix in HDB blocks and neighbourhoods, said Mr Lee.

Owners who find it challenging to sell their flats because of the EIP can appeal to the HDB who will evaluate on a case-by-case basis, he noted, in response to Mr Saktiandi Supaat (Bishan-Toa Payoh GRC) who asked if the EIP could be revised.