Mr Speaker, Sir, I beg to move, “That the Bill be now read a second time.”

Objective

2. Sir, the key objective of the Housing & Development (Amendment) Bill is to put in place the legislative framework for the new Design, Build and Sell Scheme. Under this scheme, the private sector will step into HDB’s shoes to build and sell HDB flats. The Bill will introduce a new Part IVB under the Housing and Development Act to give effect to this.

3. The Bill also seeks to introduce other amendments to the H&D Act. These include allowing special upgrading works, e.g. lift upgrading, to be offered in relation to two or more buildings to link them together, expanding the composition of the HDB Board, and widening certain powers of the HDB to facilitate its operations.

4. Let me now explain the various key provisions.

Design, Build and Sell Scheme (DBSS)

5. Sir, I announced in Parliament earlier this year that MND and HDB will be piloting a new Design, Build and Sell Scheme, or DBSS, in the second half of the year. Under this scheme, the private sector will undertake the development of public housing. Upon building completion, the development will be vested in HDB. HDB will remain the lessor for the flats and administer their leases, while the Town Councils will manage and maintain the common areas. Under the DBSS, developers will bid for the land through open tender and the successful tenderer will have the flexibility to decide on the design of the flats, the flat mix and their pricing. This allows greater scope for market forces to work.

6. So far, our public housing has been developed entirely by HDB. Most of them are designed by HDB’s in-house architects. Hence, the DBSS represents a major shift in the way our public housing programme is implemented. This new scheme will enable the private sector to play a bigger role in the public housing market. Our public housing programme will be more responsive to the needs and aspirations of Singaporeans. Market competition will also benefit HDB flat buyers by injecting fresh ideas into the design of public housing, giving them a wider choice of flats and better value for money.

7. As the DBSS is a new scheme and different from how public housing has been implemented in the past, we will move cautiously at first. We will carry out some pilot projects, test the various features of the scheme, and gather feedback from the industry and from buyers to ensure that the objectives of the scheme are met. We will study the outcome of the pilot projects and make refinements and modifications to the DBSS scheme, if necessary.

8. The DBSS is not the only way we will engage the private sector in the provision of public housing. Under the Design and Build (D&B) Scheme, HDB outsources the design and consultancy services of new HDB flats, as well as the building works as a package, to the private sector. This is a tried and tested method. HDB will continue to be the developer, and set prices, for the bulk of the new flat supply. HDB-developed flats, along with HDB resale prices, will set benchmark prices for DBSS flats, thus ensuring that they are affordable to flat buyers.

9. Over the past year, HDB has met up with industry players and associations to get their feedback on the scheme. Based on their inputs, we have refined the details of the scheme and put in place a suitable legal framework for the implementation of the DBSS.

10. The bulk of the legal provisions related to the DBSS will be introduced as new provisions under the new Part IVB of the H&D Act, which is outlined in Clause 11 of the Bill. It allows the Minister to appoint approved developers to implement DBSS projects. It also sets out the functions and duties of an approved developer. These include developing public housing on the land parcels specified by the Minister and selling the flats in accordance with the provisions in the Act.

11. Under the DBSS, private developers will bid for the site and pay the land premium before commencing development. The approved developer will hold the title to the land. As DBSS projects are public housing, upon their completion, HDB will take over the ownership of the common property and commercial properties such as the shops or social communal facilities, and be the head lessor for the flats. This will in turn allow Town Councils to manage and maintain the common areas in the development.

12. Clause 11 thus provides for the vesting of the land parcel in HDB upon issuance of the temporary occupation permit or the certificate of statutory completion for the development. Specifically, the parts that would be vested are the commercial properties, the common property, as well as the reversionary interest in the flats sold by the developer. HDB will indicate upfront the amount of consideration it will pay the approved developer for the properties to be vested, so that developers can take it into account when they submit their land bids.

13. Currently, HDB flats are sold under Part IV of the Housing & Development Act and are subject to the terms and restrictions stated therein. These include restrictions pertaining to the purchase and resale of the flats, HDB’s right to compulsorily acquire flats of lessees who infringe on the terms of the Lease, and restrictions on the sale and mortgage of the flats.

14. Clause 11 allows the various terms and conditions currently stated in Part IV to apply to flats built under the DBSS under Part IVB. This is to give HDB the necessary powers to regulate the sale, purchase and use of these flats and administer their leases, so as to ensure that the public housing nature of DBSS flats is preserved. For example, HDB will need to be able to enforce the various conditions for resale and subletting, since public housing is intended primarily for owner occupation. At the same time, some flexibility may be given, to modify the terms and conditions where appropriate. This is essential, as our intention is for HDB to experiment and modify the parameters of the DBSS, if necessary.

15. Clause 11 also includes provisions to cater to the scenarios where a buyer dies or ceases to be eligible to purchase the DBSS flat before taking possession of it. These provisions are similar to those stipulated under the Executive Condominium Housing Scheme Act. In addition, just as the use of DBSS flats by lessees will be regulated by HDB, uses of unsold units by the developer will also need to be regulated. There is therefore a provision to allow the Minister to prescribe the allowed uses for such unsold units.

16. As with new and resale HDB flats, buyers of DBSS flats can obtain mortgage financing from HDB, subject to them meeting the prevailing eligibility conditions for an HDB concessionary loan. Clause 4 of the Bill amends the current Section 13 of the H&D Act to expand HDB’s functions and allow it to grant mortgage loans for the purchase of DBSS flats.

17. Finally, Clause 11 allows the Minister to make rules necessary for the implementation of the DBSS. An example would be to prescribe the format of the sales contract between the approved developer and the buyer. As provided in the Bill, the approved developer will be exempt from the sale and purchase documents prescribed under the Housing Developers (Control and Licensing) Act, which apply to private properties.

18. Let me now explain the amendments to other Acts that are necessary for the implementation of the DBSS. First, Clause 13 makes related amendments to the CPF Act to allow buyers to use their CPF savings to finance the purchase of flats built under the DBSS. A charge on the flat will be created to secure repayment to the CPF of the amount used in the purchase of the flat. The Home Protection Insurance Scheme will also be extended to flats built and sold under the new Part IVB of the H&D Act.

19. In addition, Clause 14 provides for related amendments to the Residential Property Act, to exempt flats built under the DBSS from the various provisions and restrictions under the Act, as is the case with HDB-developed flats today. This will allow Singapore PRs who are married or engaged to Singapore citizens to purchase these flats.

20. Mr Speaker Sir, I have briefed the House on the various legislative amendments required for the implementation of the DBSS. Once they take effect, HDB will be able to proceed to put the land parcel for the first pilot DBSS project up for tender. My Ministry will monitor the outcome of the pilot closely.

Special Upgrading Works

21. Let me now turn to the provisions for special upgrading works stipulated under Part IVA of the Act.

22. Sir, Part IVA lays down the guidelines for the implementation of special upgrading works and polling. Special upgrading works are defined as any works necessary or ancillary to installing lifts in a building, or other items of upgrading works for the convenience of residents which may be prescribed by the Minister.

23. In the context of lift upgrading, works currently permitted under the Act are confined to the provision of new lifts or lift shafts to individual blocks. Provision of new lifts and lift shafts that are shared between blocks is not permitted, even if it is feasible and more cost-effective, for example, for blocks that are already connected, or can be connected, by link bridges.

24. The proposed amendments in Clauses 9 and 10 are therefore aimed at giving HDB greater flexibility in implementing the Lift Upgrading Programme, and making it clear that lift upgrading works need not be confined to works in a single building but may include works relating to more than one building. To facilitate the polling for such works, HDB will be given the flexibility to conduct the poll jointly across buildings and for the 75% majority required for successful poll to be computed based on the total value in votes of the owners across the buildings. However, I would like to emphasise that we will pursue such options only if it is more cost effective to do so. The cost cap of $30,000 per benefiting unit will continue to apply to such blocks.

Amendments to other Sections

25. Sir, I shall now move on to the other proposed amendments in the Bill.

26. Section 6 of the Act currently stipulates that the HDB Board shall consist of a Chairman, Deputy Chairman and between 3 and 7 other members. Clause 2 seeks to increase the maximum Board size from the current 9 persons to 12 persons, by allowing a maximum of 10 members instead of 7. This is to allow a wider range of expertise to be brought into the Board. With the expansion in the Board size, the quorum for Board meetings will be correspondingly increased from the current 3 members to 4 members, by way of Clause 3.

27. Clause 5 amends Section 27A of the Act to allow HDB the flexibility to compound any offence under the Act instead of proceeding with prosecution in Court. Currently, Section 27A only allows HDB to compound offences under rules made under Section 27. At the same time, the maximum composition fine will be raised from $1,000 to one half of the amount of the maximum prescribed for the offence, or $2,000, whichever is lower. This is in line with the Criminal Procedure Code and ensures that the fine will be commensurate with the offence committed.

28. Clause 6 of the Bill amends Section 51 to make it clear that in addition to prohibiting the voluntary creation of trusts over an HDB flat, the Act also prohibits any person from becoming entitled to a HDB flat under a resulting trust or constructive trust. This will help to prevent a situation where a person who is ineligible to own an HDB flat may become entitled to own one, for example, by paying the purchase price of the flat on behalf of the owner.

29. Section 52(2) of the Act sets out the guidelines for the transfer or sale of a flat, house or other building upon the death of the owner. Under the current provisions, a Grant of Letters of Administration or Grant of Probate must be taken out within 12 months of the owner’s death, and thereafter, HDB’s consent for transmission or transfer must be sought within 6 months. However, there is no timeframe for administrators or executors to transfer or sell the flat after HDB’s consent is obtained, which implies that they can remain as legal owners of the flat indefinitely. Clause 7 seeks to address this by requiring the transfer or sale of the flat to be completed within 12 months from the date of HDB’s consent. If the transfer or sale is not completed on time, HDB can take action to have the flat vested in HDB. We will however invoke this provision only as a last resort.

30. Section 60 of the current Act states that it is an offence for anyone to make a false statement to HDB in relation to any purchase, mortgage, sale or transfer of a HDB property. Clause 8 repeals and re-enacts Section 60 so as to expand the scope of the offence to include making false statements in relation to any other applications to HDB for its permission, consent, approval or licence under the Act or any subsidiary legislation. It will also make clear that the section covers any type of statements made, including those made electronically. The amendment is timely in view of the different types of applications which may be made to HDB and the wider usage of electronic applications today.

31. Finally, Clause 12 amends Section 80 of the Act to expand HDB’s investigative powers. Apart from requiring proof of identity from any person whom it believes to have committed an offence under the Act, the Clause will also empower HDB to request for other types of evidence, call for the attendance of witnesses and inspect records. This will allow HDB to deal more effectively with offences under the Act. One such example is cash-back transactions, where the buyer, seller and housing agent may make false statements about the transacted price of the resale flat.

32. Sir, I beg to move.

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