Source : Straits Times - 25 Apr 2008
RENTAL flats may make up just a mere 5 per cent of Singapore’s total public housing stock but they have been in the headlines this year.
Several factors - the rise of rental cheats and the recent surge in demand for rental flats - have prompted the HDB to conduct a review of its public rental scheme, the results of which are due early next year.
Recent figures released by the board early this month showed that more rental cheats are being exposed, with the number of flats seized by HDB for illegal subletting increasing fivefold this year.
As many as 147 rental flats were recovered by the Housing Board as at end August, compared to just 28 flats recovered last year. Fewer than 20 flats were seized in 2005 and 2006 each.
In May, The Straits Times reported a surge in the number of rental flat tenants subletting their units illegally to cash in on demand for cheap housing.
The situation came about because of last year’s property boom, which caused rental rates to escalate islandwide. At the same time, Singapore saw an influx of foreign workers looking for cheap accommodation.
Previous anecdotal evidence showed that in some estates, as many as one in five rental flats - meant for the needy - was illegally rented out, often to foreign workers or students from Malaysia, China and India, who are either ignorant of the rules or just want the cheapest rental option.
Rental cheats get these flats from the HDB for as low as $26, but sublet them for up to $1,000 a month.
The HDB has since stepped up its enforcement blitzes, and is considering a heavier penalty, such as fines, for rental cheats.
The rise of illegal subletting comes at a time where local demand for rental flats is rising. This was singled out as a ‘worrying trend’ by Prime Minister Lee Hsien Loong in his National Day Rally speech.
The number of people seeking such flats has ‘tripled’ in just a year, he said.
There were about 4,387 on the waiting list as at June, with a waiting time of nine to 18 months. In 2006, the wait was just two to six months.
The HDB has said it would ramp up its current stock of rental flats from 42,800 to 49,860 by end-2011.
Some MPs, such as Aljunied GRC MP Cynthia Phua, feel that there should be more rental flats in Singapore.
She was part of a government delegation led by Senior Minister of State (National Development and Education) Grace Fu, who visited Hong Kong recently to study its public housing policies.
About a third of Hong Kong’s population lives in 670,000 rental flats, catering to different family sizes and circumstances.
Ms Fu had said that Hong Kong’s rental ‘product offering is wider’, and provided good ideas for the HDB.
Madam Phua said changing demographics such as younger or broken families wanting more mobility added to the demand for rental flats.
‘We can stagger the subsidies for rental flats, so that those who can afford can pay more. But we need to have more supply first,’ she pointed out.
Rates for rental flats currently range from $26 to $205 for a one-roomer and $44 to $275 for a two-roomer, depending on household income and other factors.
The flats are reserved for needy, low-income families that cannot afford to buy a home or pay market rates.
National Development Minister Mah Bow Tan has also pointed to the need to scrutinise applicants in the queue.
Those in desperate need of a home will be moved to the front of the queue. The HDB will also study the assets of applicants, including private property of their siblings and children, to ensure that they rely first on family.
Pointing to a possible root of the problem, North West District Mayor Teo Ho Pin, who is also MP for Bukit Panjang, said the illegal renting of flats is due to a shortage of affordable accommodation for foreigners.
‘If we address this quickly, it might discourage people from renting flats illegally.’
The HDB might be ramping up rental flat supply, but Ms Fu said that home ownership would still be the cornerstone of Singapore’s public housing policy.
‘Rental flats will still be a small portion of what we will do, as far as public housing is concerned.’
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