Dr Aline Wong, Chairman, HDB

Ms Lee Bee Wah, Deputy Chairman, GPC for National Development

Distinguished guests

Ladies and gentlemen

New Generation of Public Housing

1. Two weeks ago, Singaporeans heard the Prime Minister address the issues of the income gap and our ageing population, in his National Day Rally speech. When he spoke about the new generation of public housing that Singaporeans can look forward to, I could sense the excitement in the audience. Since then, more details about this and other housing initiatives have been made public. This evening, I would like to share with you the thinking behind all these initiatives and how it fits into the overall vision for public housing going forward.

2. Giving our heartlands a major makeover is a key part of our plan to develop and shape the Singapore of tomorrow. We have been working hard to make Singapore a distinctive, vibrant and attractive global city. The efforts to develop Marina Bay, Sentosa, Orchard Road, and Bras Basah have received much attention and are starting to show results. But Singapore is not only Orchard Road and Marina Bay. Singapore must stand out not only as a city of commerce but also as a liveable city. For Singapore to be a city of possibilities, we must make sure that it is first and foremost our home. That is why our efforts to remake our HDB heartland are just as important, if not more so.

3. Most Singaporeans live in HDB towns. You could say that HDB living is a uniquely Singapore experience. It is not confined only to the HDB flat, but also encompasses all the sights and sounds of the neighbourhood, and living with residents from different races and walks of life.

4. Our public housing programme has won us international acclaim and admiration from foreign visitors. But being Singaporean, we are not about to rest on our laurels. We will consolidate HDB’s 47 years of experience in public housing, and build on this strong foundation so that public housing in Singapore will continue to be attractive, affordable and appealing.

5. The HDB experience started with our first new towns in Queenstown and Toa Payoh. These were developed in the 1960s and 70s. Those of you who lived in these towns will remember that they were then our showcases. Over the years, HDB developed more towns – Ang Mo Kio, Bedok, Clementi, Tampines, Jurong West, Yishun and so on. HDB also introduced different types of public housing. These included Design and Build flats, DBSS flats, eco-precincts and Executive Condominiums in recent years.

6. The new generation of public housing marks a quantum leap in public housing, bringing HDB living to new heights. We will provide a variety of housing choices, landscaped community spaces, bring more greenery to residents’ doorstep, and make better use of water bodies to soften the impact of high-rise, high-density living. Some of these features are new; others are not so new. We will bring these various elements together to transform HDB living into ‘Housing in a Park”. Our HDB towns will be places that Singaporeans of all ages will be proud to call home.

7. This will start to happen in the next few years, slowly at first as we gather experience and feedback but gather pace thereafter. We have drawn up plans for Punggol, and Dawson Estate in Queenstown for a start. It will be replicated in other parts of Singapore over time. Over the next 20-30 years, our HDB estates will be visibly different. We are not only remaking our heartlands, but also fulfilling the dreams and aspirations of Singaporeans.

8. HDB has commissioned award-winning architects to design the public housing precincts in Dawson. We have challenged them to design within a strict budget, in line with our mandate to keep public housing affordable. We have asked them to design not just flats but neighbourhoods, with common spaces where families can meet and mingle. We have also reminded them to retain the memories and heritage of the area. I have seen a preview of what the planners and architects have come up with. I believe they have more than fulfilled their brief, but I think it is better to let the public judge for themselves at this exhibition.

9. As you walk through the exhibition this evening, you will be able to see all the exciting plans that we have in store for our HDB towns – starting with Punggol for the new towns, Yishun for the middle-age towns and Dawson for the old towns. You have seen the videos and slides for Punggol and Dawson from the National Day Rally. In this exhibition, you will also see what we have in mind for Yishun.

10. Apart from being picked as a pilot town for the new Home Improvement Programme, Yishun will also see some upgrading in its town centre. Community life in middle-aged estates often revolves around the town centre. Residents go there to shop, to eat, to relax. It is also where the transport hub is located. Well, Yishun residents can look forward to all these and more. In addition to the extended Northpoint that will feature a new Community Library, there will be a new shopping complex integrated with an air-conditioned bus interchange. The new Khoo Teck Puat Hospital is also under construction and expected to be completed by 2010. Radiating out from the town centre, there will be park connectors and cycling paths to outdoor facilities and neighbourhood centres. Residents will not only be able to stroll and cycle from the town centre to Yishun Park and Yishun Pond, but also to the Family Bay and the Rowers' Bay that will be developed at Lower Seletar Reservoir. These bays will make more water activities accessible to Yishun residents.

Roles of Public Housing

11. But ultimately, public housing is not just about bricks or mortar or water or greenery. It is about people. The HDB flat is first and foremost a roof over the heads of the vast majority of the population, and a shelter to bring up our children. Over the years, our public housing scheme has evolved to serve us in other ways. HDB living promotes community cohesion through our social and ethnic integration policies. It allows our citizens to share in the country’s progress through upgrading programmes. The HDB flat can also supplement our retirement income when we are old. Together, these policies cover the lifecycle of home ownership in Singapore.

12. To address the income gap and our ageing population, PM spoke about the programmes and initiatives to enhance the three aspects of our home ownership scheme. Firstly, to help Singaporeans to buy their first flat. Secondly, to maintain and build up the value of their flat, and thirdly, to help them to cash out on their flats in old age. Over the last two weeks, HDB has released details of some of these changes. Let me recap some of them and explain how they help meet the needs of our HDB residents.

Ensuring Affordability
13. First, the enhanced Additional CPF Housing Grant (AHG) Scheme. For the last 40 years, the HDB homeownership programme has been the mainstay of our social safety network. To help Singaporean families own their flats, each household is eligible for generous subsidies. As a result, a vast majority of Singaporeans are HDB homeowners, almost 90%. We have recently made it even more affordable for lower-income families. They are now eligible for an AHG of up to $30,000. Together with the CPF Housing grant of up to $40,000, lower income households can enjoy up to $70,000 in housing subsidy. This can offset up to 40% of the cost of a 3-room resale flat (median price of $170,000).

14. The enhancement of the AHG reaffirms Government’s strong support for Singapore’s home ownership framework. We will ensure that public housing remains affordable for the majority of Singaporeans as long as they are prepared to work for it.

Asset Enhancement
15. Home ownership has provided Singaporeans with a sizable asset and a store of value. In a survey in 2003¹, each HDB household was estimated to have an average housing equity worth about $154,000. While this figure would be even higher in today’s market, the important point is that each HDB household has significant value in their flat. For many Singaporeans, their flat may be their largest single investment.

16. This high value of the housing equity did not happen by accident. The various upgrading programmes in place today ensure that our older housing estates remain attractive to flat buyers and our flats retain their value. This is a stark contrast to the experience of public housing in many countries where they degenerate into slums as they age.

17. Now, we are upgrading our upgrading programmes. The Home Improvement Programme (HIP) and Neighbourhood Renewal Programme (NRP) will be extended to more estates and will offer greater flexibility. Under the HIP, HDB will provide a list of possible improvement items for your flat. You choose what you want upgraded from this list, and you pay only for those items. Under the NRP, HDB will take into account residents’ views on the upgrading items that they want, to create homes and neighbourhoods that they can call "their own".

Building HDB Communities
18. A distinguishing feature of these new programmes is the element of resident participation and consultation. Why is this so important? Our public housing plays a key role in promoting social cohesion and community participation today. HDB policies promote the mixing of households of different races and income groups in our estates. There are racial quotas to ensure a balanced mix of households of different ethnic groups in each HDB block. Each precinct is built with flats of different sizes so that households of different income and social profiles live together. Common spaces and shared facilities such as playgrounds and fitness corners facilitate interaction among neighbours. Residents can participate in managing their own HDB estate through local Town Councils, Citizens’ Consultative Committees or Residents’ Committees.

19. My Minister of State, Grace Fu, chaired the Forum on HDB Heartware over several months to solicit views from residents on ways to strengthen HDB communities. Amongst others, we received feedback from residents that they would like to be more involved in decisions affecting their community and living environment. While this is already possible today, we would like to institutionalise the channels so that there is a more deliberate consultation process. For example, there will be a mini Town Hall gathering for residents to discuss the NRP and the facilities they would like to build with the budget available. This is an important step in building a greater sense of ownership and participation in the HDB community.

Unlocking Housing Equity
20. Finally, having planted the seeds of home ownership, grown the value of our homes over our lifetime, we must be able to harvest this valuable asset in our old age.

21. Today, there are various monetisation options in place for the elderly to cash out on their flats. They can downgrade to smaller flats or Studio Apartments. They can also rent out a room or even their entire flat.

22. For elderly owners living in smaller flats, however, they may not be able to take full advantage of these options. For this group, the Government will be giving them extra help to unlock the value of their flats.

23. HDB will be introducing a new scheme called the Lease Buyback Scheme. The scheme is targeted at elderly owners, aged 62 and above, living in 2-room and 3-room flats, and who have not bought more than one subsidised flat. HDB will buy back the tail end of the flat lease from the owners, and leave them with a shorter lease of 30 years on the same flat. The actual value of the flat unlocked will depend on the market value of the flat. This arrangement will enable the elderly flat owners to receive a payout to meet their old age needs, while they continue to live in the same flat and enjoy the familiarity of their home and community – what we call “ageing-in-place”.

24. On top of the market value of the flat unlocked, the government will be providing a subsidy to encourage eligible residents to join the scheme.

25. Last Saturday a Straits Times Insight article featured a lady, Madam Karen Wong, who earns $1,000 a month and owns a 3-room flat in Bedok. When told of the Lease Buyback Scheme, her eyes lit and she asked “You mean the Government will buy my flat back, allow me to stay and give me money for the rest of my life?" She is right. Let me explain broadly how this will work.

26. For flat owners who sign up for the scheme, the payout will be made in three parts. First, they will receive a lump sum payment upon joining the scheme. This will help them with their immediate needs. For the second part, the owners will receive monthly payments for a fixed number of years. This is to stretch the payout for the owners’ long-term retirement needs. If they do not live that long, the remaining amount unpaid will be returned to their family. But should they live beyond the payout period, we want to make sure that they continue to have some money to meet their living expenses. Therefore, the third part will go towards a longevity insurance that will continue to pay the owners a monthly allowance for as long as they live.

27. This is a new scheme and a novel approach to helping the low-income elderly. We will need some time to work out the details with agencies such as the CPF Board, who are also looking at longevity insurance. It is likely that we will ride on the CPF scheme when it is ready. To ensure that the Lease Buyback Scheme can take care of the elderly owner for life, we are carefully studying how to have a good balance in the size of the upfront lump sum, the monthly payout, and finally the allowance received from the longevity insurance. Madam Wong, who I mentioned earlier, was quoted as saying "I just need some money to get by in old age and a place to stay.” In a nutshell, that is what the scheme hopes to achieve.

28. As this is a subsidised and targeted scheme, there will be further eligibility conditions, which we will reveal shortly. According to our projections, about 25,000 HDB flat owners will be eligible for this scheme and the numbers will continue to increase. I hope many low-income elderly will join and benefit from this scheme.

29. The Lease Buyback Scheme will add to the various monetisation options already available. Together, they will help HDB homeowners cash out on their flats in old age, and supplement their retirement income.

30. The various housing policy changes that I have described, taken together, reaffirm the key role played by public housing in building a strong, stable and cohesive society. To do this effectively, it has to take on different roles in different stages of our lives to meet our different lifecycle needs. The HDB flat is not just a roof over the heads for over 80% of the population. It gives our citizens a share in the country’s progress and a stake in our country. It is also a lifelong companion that they can rely on to supplement their retirement income when they are old.

A New Milestone

31. The exhibition today marks a new milestone in this journey to remake our heartland. It is a journey that we must take together. This is therefore not just an exhibition for the public to admire pretty pictures and perspectives. This is our way of reaching out to you the resident, to engage you in building the new generation of public housing and in the rejuvenation of estates. Your responses, ideas, and feedback will influence the future planning done by HDB, URA and the many other agencies that help make HDB estates possible. It will help NParks in its development of new gardens, parks and other recreational sites. It will help agencies like NEA and PUB make the recreational water scene in Singapore a more exciting and thrilling one.

32. I strongly encourage Singaporeans from all walks of life, to visit this exhibition and give your feedback. If you are not able to make it down to HDB Hub, the exhibition will be roving to six other sites. Or, you can visit the HDB website that has been specially set-up and give your feedback online. We also want to hear your concerns and feedback personally. Therefore, Minister of State Grace Fu will be chairing a special dialogue session on 15 September.

33. Since this is a long-term plan, some initiatives may be implemented quickly while others will take more time. What is important to remember is that there is still plenty of room to improve and incorporate new ideas on what you would like to see in our HDB estates.

34. On this note, I urge all Singaporeans to join us in this journey to Remake Our Heartland and shape HDB living of the future in our new generation of public housing.

Thank you.

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