Wednesday, August 27, 2008

Needy Will Move To Head Of Queue For HDB Rental Flats

Source : The Straits Times, August 24 2008

Stricter rules being drawn up to prevent abuse of rental scheme

Singaporeans in desperate need of a home will, from today, be moved to the front of the queue for HDB rental flats.

National Development Minister Mah Bow Tan announced this move yesterday and also gave a peek into new rules being studied to stop abuse of the rental scheme.


One of them is that the HDB will scrutinise the assets, including private property, of siblings and children of applicants to ensure they rely first on family, not on rental flats.

Another will require flat sellers to deposit part of their sales proceeds into their Central Provident Fund (CPF) accounts.

These likely changes are part of a government move to address the sharp rise in demand for rental flats, with many people joining the queue even when they have other housing options.

It is a worrying trend highlighted by Prime Minister Lee Hsien Loong in his National Day Rally speech last Sunday.

Yesterday, Mr Mah told reporters at a community event in Tampines: 'Our housing policy is premised on home ownership. Rental flats are there because we recognise that there is a small group of people who cannot afford to own flats.'

These are the destitute with no family and who cannot work.

He also pledged that 'if you are staying on the beach, on the void deck, and you are a divorcee with five kids, we'll find a way'.

They will go to the front of the 4,400-strong queue.

He also said the supply of rental flats will be raised by 20 per cent to 50,000 flats, in three years.

They are leased for two years at what he called 'ridiculously cheap' rent which has stayed the same for 30 years. It can be as little as $26 a month. This fuelled the trend he noted: an increasing number of old folk who want 'to cash out of their flats and ask us for rental flats'.

Hence, he is hurrying the HDB to complete the review of the eligibility criteria as early as year's end or at the latest, next March.

He identified three rules that may get the green light:

- When owners sell, they will have to put into their CPF account the subsidy they had enjoyed when they bought their flat from the HDB. The amount could be about $30,000 to $40,000.

Now, they can pocket the entire sales proceeds and the fear is they may spend it all, be in dire straits and join the rental queue.

However, Mr Mah did not say if the rule was only for people applying for rental flats or for all sellers.

- Scrapping the current rule that allows a person to apply for a rental flat only if he has not sold a property in the past 30 months.

This rule, Mr Mah said, keeps those in dire need waiting, while giving the not-really-needy the impression that if they wait for 30 months, they are sure to get a flat.

- The main measure of neediness now is a monthly household income of no more than $1,500. Soon, the HDB will also look into the applicant's children's ownership of private property and if the person's siblings and children have the means to support him.

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