COS 2015 - Speech by MOS Maliki Osman "Helping Public Rental Tenants Own Their Homes"

Mar 11, 2015

Madam, our homeownership policy is a key pillar of Singapore’s social system, and the reason why most Singaporeans today own their homes. A home is more than just a physical space, more than a roof over their head – it provides a feeling of security and a sense of place which one owns, one roots oneself, and where one belongs. For that reason, a 90% homeownership rate, by any standard, is most unusual. This did not happen by chance, but is the result of a conscious political choice and deliberate government intervention. For the past 50 years, we have enabled two generations of Singaporeans to own their homes.

For those who cannot own a home immediately and have no family support, we provide heavily-subsidised quality public rental flats. This is not an alternative or a substitute to homeownership, but a resting stop, a stepping stone and a safety net for those who have tripped and need help to bounce back. Going forward, we will better bridge this path from public rental to homeownership, and help more public rental tenants become homeowners. We will work out a more inclusive and compassionate approach, with greater incentive for self-reliance, and stronger community support. Let me elaborate.

In recent years, we have stepped up efforts to help lower-income and vulnerable families own their homes. In 2006, HDB re-introduced 2-room flats, and has launched 11,500 units since. Many families have benefited, including 1,900 earning $1,000 or below. We help them buy their first home through generous housing grants of up to $60,000. Thus far, 1,700 families earning $1,000 or less have benefited from this. In 2013, we further introduced the Step-Up CPF Housing Grant to help families upgrade from a 2-room to a 3-room flat when their circumstances improved.

We empathise with the challenges faced by vulnerable families, including divorcees with children, and continue to extend help to them. Housing stability is paramount as they go through this transition. This is why, in 2013, we introduced priority for such families applying for a 2- or 3-room BTO flat in a non-mature estate, and provided them subsidised temporary housing under the Parenthood Provisional Housing Scheme or PPHS, while they wait for their new flat. We also shortened the debarment period from five to three years, enabling 290 divorcees to buy a subsidised flat earlier. Over the last three years, 8,800 divorcees with children applied to buy HDB flats and 3,800 successfully booked one. 130 did so with the help of the priority. 95 rented a PPHS flat.

Despite generous government assistance, some families are unable to own a home immediately. For these families, we provide highly-subsidised public rental flats to meet their housing needs. In the last 3 years, HDB helped more than 1,800 divorced parents with public rental flats. Mr Pritam Singh asked that HDB also allow single unwed mothers to apply for public rental flats. In fact, HDB already allows them to do so, on a case by case basis, if they do not have family support or other housing options. We increased HDB’s stock of rental flats from 42,000 in 2007 to 51,000 today and are further ramping up to 60,000 by 2017. Mr Pritam Singh asked what has been the impact on allocation and waiting time. In 2014, we successfully placed 2,300 households in public rental flats. CIThe average waiting time has come down from 21 months in 2008 to 5.5 months now. With more flats coming on stream, we will be able to help low-income families in a more timely fashion.

Mr Zainudin Nordin asked that we relook our rental housing policy to ensure that we continue to help low-income families have a roof over their heads. The public rental scheme was launched in 1960, the same year that HDB itself was formed. But it has not remained static. We review the eligibility criteria from time to time, to ensure that they meet today’s needs. We are ramping up supply. Today’s public rental blocks provide a totally different living environment from those of yesteryears. I know for a fact as I used to live in one of these rental flats and I am sure many members of this house did too.

We have, and will continue to transform our public rental landscape, to keep up with the times. In fact, the only feature that has remained unchanged through these years is the public rental rates; the lowest rate of $26 a month was set in 1979 and it has still remained at $26 a month today, after 35 years.

That is why, even as we ramp up supply, we must continue to be judicious in allocating these highly-subsidised rental flats, so that we target help where it is most needed, and stretch each dollar to help as many as possible. Hence, as a policy, singles, including elderly and divorced singles, are required to co-rent a flat and are not allowed to rent alone, as Mr Lim Biow Chuan has suggested. However, if co-sharing is not feasible, due to medical conditions for example, HDB makes exceptions. We are driven by need, not by rules. Even when we exercise flexibility, we will continue to work with our partners in the social service sector to help these families improve their socioeconomic circumstances that would enable them to own their own homes subsequently.

However, as we improve access to public rental flats, we observe a worrisome trend: more families coming into public rental today used to be homeowners but had sold their flats for various reasons. Just five years ago, they comprised only 52% of public rental applicants. Today, the proportion is 59%. Some have benefited from one housing subsidy before and while they still qualify for another subsidised BTO flat, they have to pay a resale levy and are no longer eligible for generous first-timer housing grants. Some have enjoyed two housing subsidies and cashed out, quite substantially and more than once. They no longer qualify for subsidised flats and face an even steeper climb. As they are likely to be older, they also have problems getting sufficient housing loan. Also, many of them have children who are financially dependent on them.

Mdm A’s family is one such example. Mdm A and her husband upgraded from a 3-room resale flat and bought their first subsidised 4-room flat in 2003 at $190,000. Despite HDB’s assistance, they were unable to keep up with the mortgage payments and decided to sell their flat in 2010. They received CPF refund of $32,600 and cash proceeds of $198,000, more than what they paid for the flat. But with this, Mdm A bought a weekend car and rented a private apartment. She set up a food stall but business was poor and closed shop soon after. She then invested a large sum in a business venture which turned out to be a scam. At the same time, her husband developed a serious medical condition and part of the proceeds was used to pay his substantial medical bills. They also sold the car. In less than two years after selling their 4-room flat, the money ran out. Mdm A earned just $800 a month and her husband was unemployed because of his medical condition. They could not afford to buy another flat or rent on the open market. Their relatives were also unable to accommodate the large family of six. Mdm A’s three youngest children lived separately with different relatives while she, her husband and their elder son spent their nights at the void deck or the beach. When they appealed for a public rental flat, HDB accepted their application on compassionate grounds even though they had enjoyed substantial sales proceeds and were not eligible to rent. They moved into a 2-room rental flat in 2013 and have been there ever since. Mdm A aspires to own a home again to provide a better living environment for her children. We will try to help her as far as we can.

Mdm A’s case is not an isolated one. Many members in the house would have met families with such a background. Indeed, we must recognize that the HDB flat is a home for loved ones, as well as a valuable nest egg for retirement, especially for the lower-income. In a rising property market, or even when one is financially strapped, the temptation to sell is a very real one. But my advice – resist the temptation and don’t cash out too early. Keep your home; protect your nest egg; life may be harder in the short-run; but it will work out. We have seen many cases like Mdm A. With better outreach and community engagement, we hope homeowners will make informed choices and not be easily taken in by the promise of short-term gains without realizing the serious longer-term implications.

Mr Zainudin Nordin asked what more can MND do to help low-income families get decent housing at affordable prices. Mr Pritam Singh suggested loosening restrictions on the Tenants Priority Scheme. Mr Zainal Sapari offered various suggestions, including providing them a third bite of the cherry, but impose safeguards and conditions.

Like them, we instinctively want to help these public rental tenants achieve homeownership again. Our hearts go out to these families, especially to their children, because if we can, we would like the children to be able to grow up in a more stable and conducive homeownership environment. But as Minister Khaw said yesterday, this is something we need to think through very carefully. There are at least two issues that we need to take time to ponder. The first question is one of equity. Will our society support giving them more housing grants than what other families, including lower-income families, receive, if the reason why they need more help is because they have used the proceeds from the sale of their previous HDB flats unwisely or even irresponsibly? The second question is one of sustainability. Would such a well-intended policy change result in a moral hazard? What are the right enabling conditions needed for these families to become homeowners and remain as such? As members are well aware, money can help buy another flat, but more than that is needed to create a stable home. As a society, we have to find a way forward.

In 2012, I started a small pilot to work out a way to help low-income families living in two interim rental housing blocks to rebuild their lives and own their homes. The project is called P4650. P4650 is not a housing initiative, but a community project. Through P4650, we bring together social intervention and community support as we realise housing problems are only the tip of the iceberg for many low-income families. They face challenging and complex social issues. The hand-holding of each and every household is highly resource-intensive, and the support customised, whether it is budgeting, job matching, skills upgrading or supporting children in school or after-school care and even mental health related support. We have had some good results with this pilot, not just in terms of helping many of the families be homeowners again, but more importantly, in terms of changed behaviour and transformed lives that are essential in making homeownership sustainable.

Even so, we are far from 100% success. Why? Government assistance and community support are extended to all. But what we find differentiates success and failure is personal motivation. Those who succeed are those who, from the bottom of their hearts, want to carve out a better life for themselves and their children. It is this personal drive coupled with government help and community support that make the difference.

Let me cite an example of Mdm S, a divorcee with two young children, who used to stay in an interim rental block in my constituency in Siglap division. She was placed in our P4650 program. She was waiting for her 2-room BTO flat to be completed. She was working as a relief infant care teacher and earning a monthly income of just $1,000. With that income and two young children, she struggled with rental and utilities payment. She was overwhelmed with the challenges she was facing. P4650 helped Mdm S stabilise her situation with rental vouchers and School Pocket Money Fund for her children. Mendaki and Homework Café, run by volunteers at the Siglap CC, helped her son with free tuition and homework supervision. This helped improve his school results. And Mdm S herself never gave up, wanting to build a better life for her young ones. On her social worker’s advice and support from WDA and South East CDC, she took up a basic Early Childhood Education course. After she completed the course, she was promoted and her wages rose. I am happy for Mdm S. She is now a proud owner of her own flat. More importantly, she has rebuilt her life and the life of her two young children after her divorce, and there is hope for a better future for the family.

On this note, Mr Zainudin Nordin asked if there are Singaporeans still living in interim rental housing. Today, there are 1,140 households in interim rental housing. The majority, 70%, are waiting to be allocated a public rental flat or have booked a new flat, and will move out when their flats are ready. For the remaining 30% who are still working out their long-term housing option, HDB works closely with the social agencies to help them stabilise their family circumstances, and find employment or get better-paying jobs, so that they can secure a longer-term housing option. Since interim rental housing started, 4,250 of the 5,390 households who took it up successfully moved out to rental or purchased flats or found alternative accommodation.

Based on my experience with P4650, I believe that collective responsibility, built on personal motivation and self-reliance, will have to underpin the more inclusive and compassionate homeownership policy that we seek to develop. If families, particularly those in rental flats, take up the opportunity to work towards homeownership, they will not have to go at it alone. We know it is not easy for them. We empathise with their plight. That is why, together with our community partners, we stand ready to help them get back onto their feet so that they can then build a better life for themselves and for their family. We will target assistance where it is needed and create the right enabling conditions for as many Singaporeans as possible, including those in the lower income group living in rental flats, to be homeowners, with a stake in the country and its future.

Municipal Parking Issues

Let me now touch on municipal parking issues.

Mr Muhamad Faisal Abdul Manap suggested standardising the season parking rates for Class 3 passenger vans. Today, HDB charges different rates depending on the size of the un-laden weight of the vehicle. This is to preserve the character and ambience of the HDB residential estates.

HDB upgrades its car parks from time to time. Mr Pritam Singh suggested that there is scope to better coordinate the Repair & Re-decoration (R&R) works under HDB with the routine maintenance under Town Councils (TCs). We agree. Today, HDB already alerts TCs on its schedule for MSCP R&R works in advance.

Mr Pritam Singh said that HDB has yet to reply to his request for more information on the schedule for car park upgrading. HDB told Mr Singh that most of the HDB surface car parks at Kaki Bukit, Eunos and Bedok Reservoir wards have already been upgraded, and the remaining car parks have also been scheduled to be upgraded progressively from 2017 to 2021. HDB needs a bit more time to confirm the exact schedule of the works over the next 6 years, so that it can minimise subsequent adjustment and disruption to the TC’s plan. On behalf of HDB, I ask Mr Singh for some understanding. HDB has been working on his request, since he asked in end January 2015. It will be finishing its study, and should be able to reply him soon.

Mr Png Eng Huat expressed concern about the fruits from some trees in car parks in Hougang causing dents to vehicles and discomfort to pedestrians. I would like to assure Mr Png that HDB and NParks recognise the importance of selecting the right species of trees in residential estates, including car parks. The particular species of trees that Mr Png referred to is commonly known as the ‘Sea Apple’ and has also been planted by NParks in other parts of Singapore. It is a common species found in many car parks across Singapore. The trees in the Hougang car parks have in fact been there for the past 15 to 20 years. If these mature trees remain healthy, they should be retained. HDB will continue to ensure that the trees are regularly pruned.

From time to time, there may be some imbalance between parking demand and available supply, as was the case in the car park at Blk 538 along Bedok North St 3 cited by Mr Muhamad Faisal Abdul Manap. Through HDB’s measures such as the introduction of EPS to encourage higher vehicular turnover, HDB has managed the situation and all residents who have applied for season parking tickets for this car park have managed to obtain one.

Community Improvement Projects Committee

Let me address the issues raised on CIPC. Mr Pritam Singh asked about Community Improvement Projects Committee (CIPC). To set the issue in context, we must recognise that there is a difference between CIPC under the charge of Citizens’ Consultative Committees (CCCs), and the programmes like Home Improvement Programme (HIP) and Neighbourhood Renewal Programme (NRP) which are nominated by Town Councils (TCs). So there is a difference.

As Mr Singh would be aware, in FY12 - FY14, over just a three year period, MND has given AHPETC 6 HIP and 3 NRP projects. This is comparable to the number of projects received by other TCs.

MND gave AHPETC full flexibility to nominate and prioritise the eligible HIP and NRP projects assigned to it. AHPETC has used this flexibility to give a big share of the projects to Hougang SMC, although Aljunied GRC has more eligible projects. Nonetheless, that is of course a call the MPs are entitled to make.

Mr Pritam Singh would also be fully aware that after various NRP projects were handed over to the AHPETC to be implemented, AHPETC had unilaterally cut the works at Serangoon North Ave 1 and 2. The works were cut because the TC’s cost overran and exceeded the approved budget. As a result, residents will no longer get shelters over the basketball court at the Family Park and the Community Plaza, which were committed earlier. The local grassroots informed HDB that residents had the impression that the items were cut by HDB because AHPETC was run by the opposition. That’s not true. Again this is a mischievous distortion. These items were cut because the TC’s costs are higher and exceeded the approved budget.

MND has been fair to AHPETC and has treated AHPETC no differently from other TCs. Indeed when it comes to exerting its autonomy even against prevailing HDB policies, it is the AHPETC that has been especially aggressive and often with total disregard to such national policies.

In the case of the CIPC, Mr Singh would be aware that CIPC funds are disbursed through the CCCs, not the TCs. We have said this in this House many times before. It is therefore incorrect for Mr Singh to say that MND had previously given CIPC funding to the former Aljunied TC, but withdrew it from AHPETC. This is untrue. The funds were never disbursed through any TC. They were disbursed through the CCCs.

Just as we give TCs flexibility over proposals under the HIP and NRP, we give the CCCs flexibility to assess proposals under CIPC and to prioritise them for implementation. The CCCs are close to the ground and will be able to decide on the projects which will be most useful for the local residents. CIPC is community oriented. Its key objective is to bond residents, working together with their community leaders, to improve the living environment. CCCs also have to raise the 10% co-payment for CIPC, and will have to be prudent in what they decide to do as they have the responsibility to raise the funds, thus the need to consult the residents and know what the residents want and whether the residents are prepared to support the CCCs in their fund raising efforts.

In the case of AHPE CCCs, I understand that it had earlier consulted residents on proposed CIPC projects in their HDB estates and received 90 project proposals. The number of projects residents proposed had busted the CIPC budget for the year and the CCCs needed therefore to prioritise these projects. Notwithstanding this, the CCCs reached out to AHPETC for its nominations; AHPETC proposed 52 projects.

This meant that there was a long list of proposals, 90 that the CCCs received from the residents, plus 52 with some overlaps between them. The CCCs, which comprised community volunteers, needed time to go through all these proposals. Eventually the CCCs identified 17 projects which could be funded within the allocated budget: 6 were proposed by both the TC and CCCs – that is the overlap, 6 were proposed by the TC and the remaining 5 were proposed by the CCCs. So AHPETC’s proposals actually accounted for 12 out of 17 projects selected. And the CCCs have to raise funds for these AHPETC’s proposed projects. The CCCs would need a bit more time to implement the projects.

I don’t know why Mr Singh would now turn around, blame the CCCs for tardiness, and unfairly paint them in such a negative light in the eyes of the public, when the CCCs took the time and trouble to seek, go through and as it is clear, gave significant consideration to the TC’s proposals and were prepared to support many of them? I think the grassroots and the local community leaders are fully prepared to work with the TC to serve residents better. But it takes two hands to clap.

Fish Kill Incident

Madam Chair, let me now respond to Associate Professor Muhammad Faishal Ibrahim’s query on the recent plankton bloom that affected our fish farms in the East and West Johor Straits.

The fish losses have come up to 600 tonnes so far, most of which are farms near the East Johor Straits. The farms near Lim Chu Kang on the West Johor Straits are less affected with losses of about 10 tonnes. Most of the dead fish reported in that area at Lim Chu Kang jetty and Sungei Buloh coastline were wild fish from the sea. The plankton situation has since improved, with reduced fish mortality. During my visit to the fish farms in East Johor Straits last week, I personally saw a farm that lost their entire fish stock. I fully empathise with the fish farmers on their losses. I know it must be a very painful experience for those badly affected.

According to experts, the plankton blooms that caused the fish mortalities could be due to a confluence of unfavourable environmental factors, such as neap tide, dry weather, increased nutrients in the water possibly due to untreated sewage, oil palm discharge and other pollution. We are investigating and will see what can be done to reduce such pollution at source.

AVA has collected samples from the affected farms for laboratory analysis. No marine biotoxins that are harmful to humans were detected from any of these samples. AVA will continue to test fish samples from the affected farms to ensure food safety.

AVA has been monitoring the situation at the fish farming areas daily over the past weeks as there were concerns about potential impact of the recent hot and dry weather spell on our fish farms, and they do it every year. On 30 January, AVA alerted the fish farmers to adverse weather conditions and advised them to monitor the situation. As soon as AVA detected elevated plankton levels at the East Johor Straits, they alerted the fish farmers on 16 and 17 February so that they can take immediate action. AVA advised them to deploy canvas bags to isolate the fish from their external environment, harvest their fish early to cut losses, and transfer their fish stock to unaffected areas. The farmers who heeded AVA’s advice before the fish deaths peaked on 27 Feb averted the worst. Similar warnings were given to fish farmers in the West Johor Straits on 25 February, prior to the fish deaths on 6 March.

One of the farmers whom I met, Mr Gary Chang of San Lay Marine Culture Co., took early action after AVA’s warning on 30 January. Mr Chang lined his net-cages with canvas and installed a simple filtration system to maintain the water quality. His losses this year were only one-tenth that of last year’s fish kill, that he experienced.

Unfortunately, there are many farmers who did not react in time and suffered much worse losses. To assist farmers in the disposal of dead fish, AVA officers worked hard and deployed waste disposal vessels, even working and visiting the farmers daily during the Chinese New Year period.

We cannot prevent plankton blooms from recurring, but we can take steps to minimise their impact when they recur.

First, AVA will work with the fish farmers to recover and build up resilience against similar future incidents. AVA will help farmers to develop operationally ready contingency plans to reduce their losses in future occurrences. I strongly urge the fish farmers to work with AVA on this. We also plan to help farmers learn from their counterparts who have installed resilient systems. Farmers can tap on AVA’s Agriculture Productivity Fund to purchase relevant equipment to enhance their resilience. MND and AVA are exploring further assistance beyond these measures for affected farms to restart their operations. Similar to last year, AVA will not impose the minimum production requirement on affected farms, nor take action against them for not meeting the minimum production requirement. We are very reasonable people. We are not heartless. We understand the difficulties the farmers face during these times and will allow them sufficient time to get back onto their feet and we will continue to help them do so.

Second, we need to better understand the science behind this phenomenon. AVA is collaborating with agencies such as NEA, NParks and PUB, and experts from research institutes such as Tropical Marine Science Institute (TMSI), to study the relationship between plankton blooms and fish kill.

Third, through the Co-Innovation Partnership Programme (CI Partnership), AVA has commissioned projects to develop closed containment systems which can reduce the vulnerability of the fish stock to water conditions. The existing mode of farming in net cages in the sea exposes the fish to unnecessary risks. Fish farmers must consider modernising their farming methods so that they are better protected in the longer term. A good case in point is Singapore Aquaculture Technologies. The company puts their fish stock in a closed containment system and has an appropriate water treatment system to protect the fishes from the harmful effects of the algae. They managed to save two-thirds of their fish stock with their system. I am glad that there are already several farmers who realised this, and have invested in technology such as the closed containment systems.