Written Answer by Ministry of National Development on rent control measures on coffee shop stalls in HDB estates to prevent transfer of cost increases to consumers

Jul 4, 2022

Ms Carrie Tan: To ask the Minister for National Development whether there are any plans for rent control measures on coffeeshop stalls in HDB estates in order to curb and prevent high costs of rental from being transferred to consumers.

Answer:

1          There are presently over 770 HDB coffeeshops in Singapore. Some of these coffeeshops are sold and are hence privately-owned, while the rest are rented out by HDB.

2          We are mindful of the need to ensure that residents have access to affordable cooked food options, and of the potential impact of resale transactions, and have therefore put in place various measures over the years. One key measure is to ensure a good supply of coffeeshops in every HDB estate and town, so that there is healthy competition. These coffeeshops can also be run by social enterprises, for example NTUC Foodfare, to help keep food prices low. The market for F&B is highly competitive, especially in our heartlands. For example, the two coffeeshops at Tampines and Yishun are within neighbourhood centres that have five and seven coffeeshops respectively within a 400m radius, and residents hence have a choice of affordable food options there.

3          HDB completed 34 new coffeeshops in the last four years, and continues to build new ones to serve new HDB developments. Another 30 coffeeshops will be completed in the next four years. Aside from coffeeshops, we also have over a hundred hawker centres in Singapore, and the Government is building more. Four new centres will begin operations this year, with another seven being planned or under construction.

4          Since 1998, HDB no longer sells coffeeshops, and only rents them out. In addition, HDB has introduced new measures to ensure quality and affordability of food in these coffee shops that are rented out. In 2018, HDB introduced Price-Quality tenders, with 50% of points assigned to the Quality of the operator, which includes aspects such as the availability of budget meals, good track record and community initiatives. Operators who successfully tender for HDB coffeeshops typically provide budget food options at every stall, with these priced at around $3. The rentals under Price-Quality tenders are also lower and more sustainable than under pure price bidding tenders.

5          We note the suggestion from the Member on possible rent control measures. We will need to guard against unintended impacts. For example, by controlling rent, we could end up reducing the incentive for coffeeshop owners to invest in improving their coffeeshops to provide better services and facilities to customers.

6          Coffeeshops and food centres play an important social role in our HDB towns and estates, as they not only provide a convenient option for cooked food and drinks for residents, but also serve as key community hubs for families and friends to bond and connect over food and drinks. As such, HDB regularly monitors the resale market for HDB coffeeshops, as well as the prices of food sold in both sold and rental coffeeshops, and will not hesitate to review its policies to address affordability concerns where necessary.