WP's proposal to expand public rental scheme could weaken communities, says Sim Ann

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) yesterday.

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

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

Making the proposals in a motion, Mr Chua said the HDB's latest annual report showed 63,773 rental flats as at March this year compared with 1.02 million sold flats.

Of the rental flats, 97 per cent are one-room and two-room flats for those with no other housing options. The rest are for couples who need interim housing while waiting for their Build-To-Order flats.

Noting that these schemes are over-subscribed, Mr Chua said supply was simply insufficient to meet current demands. He cited how it takes five or six months to get a rental flat, and said the HDB had told a WP MP it is facing an islandwide shortage of one-room flats.

HDB could work with private developers to come up with Build-To-Rent housing, and price rentals for such flats between HDB public rentals and HDB open market rentals, he said. These would offer more options to single millennials and young couples wanting to start families before they can afford a home, he added.

An expanded public rental housing scheme would also help 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 need to reflect that," he said.

He cited Switzerland and Germany, which have home ownership rates of less than 45 per cent, but have among the highest GDP per capita and human development index scores globally.

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

In her response, Ms Sim said the HDB's current rental housing options 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 therefore very targeted, she said. "Our aim is to help households in public rental eventually achieve home ownership as well." Acknowledging that changing societal trends may reshape perception of 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 apartments in big cities around the world, said Ms Sim, this is largely unsubsidised and subject to market forces and reflects different social circumstances.

The rent 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.

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A version of this article appeared in the print edition of The Straits Times on November 03, 2021, with the headline WP's proposal to expand public rental scheme could weaken communities, says Sim Ann. Subscribe