Building affordable homes for S'poreans

By Janice Heng, The Straits Times, 31 Mar 2014

AT THE turn of the last decade, there were fears that the Housing Board flat was becoming out of reach for many families.

Young couples bemoaned the fierce competition to buy subsidised Build-To-Order (BTO) flats from the HDB, while soaring prices meant that buying a resale flat was a costly proposition.

At the end of 2010, the median price of a four-room flat was $385,000.

Five-room ones were going for more than half a million dollars in many mature estates.

It led to heated tempers, with citizens and opposition parties urging the Government to care more about families and less about keeping property values high.

But to see Singapore's housing policy as hostile to families would be a mistake.

Granted, there is a tension between keeping flats affordable for buyers and keeping property values up for home owners.

The latter was a particular focus in the 1990s.

Then prime minister Goh Chok Tong, in a 1992 speech to grassroots leaders, said HDB flats were the most valuable asset for most Singaporeans, adding: "It is in your interest to ensure that the value of your flats continues to rise."

Nowadays, the need to maintain property values is taken as given.

In his Budget speech this year, National Development Minister Khaw Boon Wan said: "If Singapore's economy were to decline permanently, all properties would drop in value.

"That is why it is important to ensure that our economy remains dynamic and vibrant."

In the light of this, it is not hard to see why some might accuse the Government of being more interested in property than people.

Yet, such an accusation would be misguided.

Even as it aims to maintain property values, the Government has not neglected the needs of those seeking to buy a home.

Instead, it has moved to make sure that public housing is affordable and available.

When Mr Khaw took over the housing portfolio in 2011, he unlinked BTO prices from resale ones.

Previously, BTO prices were pegged to those of resale flats in the same area, and rose when resale prices rose.

Removing this peg meant the Government could keep new flats affordable even in a strong resale market.

In addition, the HDB had already begun launching more BTO flats, with 16,000 in 2010 compared to under 8,000 in 2008.

Mr Khaw ramped this up to more than 25,000 new BTO units each year, which allowed more young families to get a new flat sooner.

The income ceiling for HDB flats was also lowered, making affordable public housing available to more Singaporeans.

Cooling measures such as tighter home loan curbs reined in resale price increases.

Family first

IF ANYTHING, the family is central to housing policy.

Until last year, only families could buy subsidised flats directly from the HDB. Families also receive higher housing grants to subsidise their purchase of public flats than singles.

Housing policies even encourage larger family units.

For instance, 30 per cent of BTO flats are set aside for married couples with children who are buying their first public flat.

Priority is also given to extended families who live close to each other. The Multi-Generation Priority Scheme sets aside 15 per cent of units for parents who are applying with their married child for flats in the same development.

Larger "3-Generation" flats were introduced last year for multi-generational families.

As Mr Khaw put it in 2011, shortly after taking over, promoting marriage and births "is a national priority... and MND (Ministry of National Development) must facilitate it to its best ability".

There have even been arguments that the family has been too central to housing policy.

Over the years, there have been demands for more to be done for those who fall outside the usual definition of a family unit.

Single Singaporeans were initially shut out from the public housing market.

Then-national development minister S. Dhanabalan said in 1988 that land-scarce Singapore could not afford to let every single person have a flat of his or her own. Letting them live alone would also conflict with the Government's focus on the family unit, he added.

For decades, singles could not buy resale HDB flats on their own, but had to apply jointly with another single.

But things have gradually changed. In 1991, singles aged 35 and older were allowed to buy one- to three-room resale flats in all but some urban estates.

In 2001, that geographical restriction was lifted and three years later they were allowed to buy resale flats of any size.

Last year, they were finally allowed to buy new two-room flats in non-mature estates directly from the HDB.

Mr Khaw is unlikely to move any further on this issue for now.

When Member of Parliament Penny Low suggested in the Budget debate that singles be allowed to buy larger BTO flats, he insisted that families still come first. "I have no plan for such a change immediately. Given our limited resources, let me prioritise - and, I think, give greater priority to the married couples first."

But in focusing on families, Mr Khaw is also willing to pay more attention to less traditional ones.

"Now that we have cleared the backlog for newlyweds, we have begun to focus on helping the vulnerable groups, especially divorcees with children," he said.

In September last year, for instance, a temporary housing scheme was extended to divorced and widowed parents with children. Previously, this Parenthood Provisional Housing Scheme was open only to married couples who were first-time buyers.

Five per cent of two- and three-room BTO flats in non-mature estates are also set aside for divorcees with children below 16.

This approach looks set to be expanded in future. Mr Khaw asked: "Even as we continue to support marriages and families... how can we, in housing, build a social compact that is more inclusive and provide greater support to divorcees and unmarried parents with kids?"

The traditional family unit remains at the heart of housing policy. But perhaps the next step is to accommodate other sorts of families too.