| Replies
to Forum Letters
TODAY
27 Jan 2005
Difficult
for old to cope with rate increases
by Leong Sze Hian
In
connection with the Social Development feedback group's report,
I would like to bring up the problem of the disproportionately
high increase in the costs of renting one-room HDB flats over
the last decade.
An
old friend gave me two letters he had received from the HDB
and the Ministry of National Development (MND).
The
HDB informed him that since the GST-offset monthly rental
rebate on his 1-room rental flat would cease, his rental per
month would increase in April from $20 to $26 - an increase
of 30 per cent.
The
MND letter likewise informed him that his service and conservancy
charges (S&CC) rebate would cease, increasing his charges
by 28 per cent, from $14.50 to $18.50.
I
have checked with HDB flat-owners and found the S&CC for
a 5-room flat in Yishun is going up from $59 to $60.50; for
a 4-room flat in Bukit Batok, from $48 to $49.50; and for
a 3-room flat in Jurong West, from $33.50 to $36.50.
These
represent increases of 3, 3 and 9 per cent respectively.
As
those who live in one-room flats are among the poorest, why
is it that their rentals and S&CC are going up by a bigger
percentage?
Even
the absolute dollar increase of $4 is more than for other
flats.
For
someone like my friend who is 57 years old, unemployed and
has been renting his flat for 15 years, the combined increase
would be difficult to meet.
My
friend's rental has increased gradually from $10 in 1994 to
$26 this year - a hike of 160 per cent over 11 years. His
S&CC went up from $3.50 to $18.50 - about 428 per cent.
How
do these increases compare with those for the other HDB flats
and for private property in the same period?
Annual
inflation in the last 11 years has been about 2 per cent.
How is it that the 1-room S&CC works out to an annual
compound rate of increase of about 16 per cent per annum?
S&CC
rates were increased last September. Why is there another
increase after less than 6 months?
I would
like to suggest that some of the billion-dollar packages unveiled
to help older workers, the elderly and the jobless be used
to reverse the disproportionately high increase in the costs
of renting 1-room HDB flats.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
TODAY
4 Feb 2005
No
rent hike since '79
In
Leong Sze Hian's letter "Difficult for old to cope with
rate increases" (Jan 27), he said that rents and service
and conservancy charges (S&CC) for 1-room flats had risen
by 160 per cent and 428 per cent, respectively, over the past
decade.
This
is not true. HDB has not raised the rents for its 1- and 2-room
rental flats sine 1979. Gross rents have remained at $26-$33
for a 1-room flat, and $44-$75 for a 2-room flat. These rents
are highly subsidised and are substantially below market rentals.
Similarly,
the monthly S&CC rate for a 1-room flat is $18.50 today
compared to $15.50 ten years ago - an increase of $3.
The
$10 rental and $3.50 S&CC for a 1-room flat in 1994, as
cited by Mr Leong, was after deducting the rebates introduced
by Government as part of the Goods and Services Tax (GST)
offset package, in 1994. Although the rebates were meant to
be temporary, they were extended in 1998 due to the economic
slowdown, and again in 2002, as part of the offset package
when the GST was increased.
The
rebates announced in 2002 were meant to be phased out over
a 5-year period.
From
April this year, the monthly rebates that rental tenants currently
enjoy will cease in line with this announcement.
The
writer is wrong to conclude from this that HDB and the Town
Councils are raising their rental and S&CC rates, respectively,
with effect from April.
In
fact, HDB tenants will continue to enjoy rental and S&CC
waivers until early 2008.
This
year, 1-room rental households need not pay rent for 4 months
and S&CC for 5 months, as these will be paid for by the
Government as part of the GST offset package.
Besides
the subsidised rental and rebates, HDB will help tenants in
financial difficulty by allowing them to pay their rent in
instalments within a reasonable period.
HDB
will also work with various agencies such as grassroots organisations,
the Community Development Councils and voluntary welfare organisations
to help tenants in financial hardship.
If
Mr Leong's friend needs help with his rental payments, he
can contact the HDB's Branch Services Line at 1800-2255432
for advice.
Julia Hang
Deputy Director (Corporate Communications)
Ministry of National Development
Last updated on 18 May 2006 |
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