Housing

Affordable housing is a huge concern among Singaporeans who are increasingly finding themselves priced out. To address this problem, the Singapore Democratic Party (SDP) has proposed a new approach to increase the affordability of, and access to, public housing for all Singaporeans. In addition, an increasing number of HDB flats are approaching the 79^th year of their lease beyond which buyers cannot use CPF funds to purchase the flat. This will place the owners in a very precarious position as for many individuals, the bulk of their retirement savings would be concentrated in their flats which might rapidly decline in value. The government had promised a voluntary en-bloc redevelopment scheme seven years ago but no further details have been provided since. This makes retirement planning for residents very challenging.

The policy ideas contained in this paper, Housing a Nation: Holistic Policies for Affordable Homes tackle the key issue of affordability by introducing an innovative new housing scheme—the Non-Open Market (NOM) scheme—to our public housing system. This paper also introduces supplementary policies to support young families and foster inclusiveness within our public housing system.

Under the NOM system, prices of public housing will be lower because the cost of an HDB flat will only include the cost of construction and administration. NOM HDB flats will be built on land specially zoned for public housing and not contain a land cost component. This is unlike the current HDB practice of including the cost of land in public housing.

As a result, the NOM scheme can offer public housing to Singaporeans according to prices listed below:

For first-timer low-income households (with average gross monthly incomes of less than $4,000) HDB’s CPF Housing Grant scheme will be adapted and improved to provide grants for buying 2-room and 3-room flats. Grants will not be required for first-timers with higher household incomes and other buyers. This will save several hundred millions per year for taxpayers and MOF/MND.

The key features of the NOM system are as follows:

1. NOM flats may only be sold back to HDB at the purchase price less the consumed lease, their leases cannot be transferred in the HDB resale market.
2. Current owners of Open Market (OM) flats will have the option of converting to the NOM scheme, where the Government will return an amount based on the original purchase price from the HDB and the price of NOM flat of the same type.
3. HDB will hold a buffer stock of HDB flats to enable Singaporeans to obtain their flats with minimal waiting times.

Housing a Nation: Holistic Policies for Affordable Homes also makes the following policy recommendations:

1. Implement the Young Families Priority Scheme (YFPS), a targeted priority scheme that grants balloting priority for first-timer families with children or couples who are expectant for Balance Flats or new Built-To-Order Flats in non-mature estates.
2. Increase the inclusiveness of public housing by enabling single parent families with children and low-income households to to rent flats for two years at a time, without being subject to reviews every few months.
3. Enhance the Lease Buy-Back Scheme to more effectively assist needy senior citizens to have a secure retirement.

The NOM system will increase the affordability and access to public housing for all Singaporeans. While our suggestions for young families and Singaporeans with special needs will ensure our public housing system is inclusive. The retirement adequacy of citizens will be enhanced through lower mortgage repayments and higher savings accumulation in our CPF accounts.  Collectively, these SDP policies can contribute towards resolving some of the major problems affecting public housing in Singapore today.