More rental flats needed, say MPs

Members of Parliament (MPs) said there is a need to raise the supply of rental flats significantly, to match demand.

They said despite a shorter waiting time, there are still segments of the population who need rental flats quickly.

Their comments come a day after Minister for National Development Khaw Boon Wan said there was a need to ramp up the supply of these flats by “tens of thousands”.

MPs said based on their Meet-The-People sessions, demand for rental flats comes from low-income families and households facing difficult times.

MP for Tanjong Pagar Group Representation Constituency (GRC) Chia Shi-Lu said: “Giving a conservative estimate of five cases a week, 20 cases per month, and about 200 cases a year — and we spread that out among the 87 zones in Singapore — we’re looking at 15 to 16,000 applicants”.

Rental flats are meant to cater to poor and needy families who have no housing options.

Today, there are some 45,000 units in Singapore.

With rent as low as S$26 a month, the demand for such units is always high.

Even after tightening rules to prevent abuse of the system, the wait for one of these units can be relatively long.

HDB said the queue for rental flats is now about 1,700 applicants, down from 4,600 in 2009.

Waiting time has also been reduced from an average 21 months in 2008, to about eight months currently.

Even so, new cases continue to pour in every month.

In March this year, former National Development Minister Mah Bow Tan disclosed that HDB received 190 applications for rental flats each month last year.

On concerns from existing home owners that their property value may drop if rental flats were built in their neighbourhood, Dr Chia said more education is needed.

He said he has yet to see evidence of property values being affected by their proximity to rental flats, and added that other factors such as location and availability of amenities are likely to affect prices more.

MP for Holland-Bukit Timah GRC Liang Eng Hwa said rental blocks should be spread out across the island and integrated into neighbourhoods.

With the recent increase in Build-To-Order flats, and the proposal to have more rental units, Mr Khaw said the industry cannot cope with the demand for nearly 40,000 flats a year.

The industry currently has the capacity to build half that number, the Singapore Contractors Association said.

It faces many challenges in trying to ramp up supply so quickly – including a tight labour situation and rising costs due to rising foreign worker levies, higher dormitory and transportation costs.

In addition, there is the issue of sustainability.

Singapore Contractors Association 2nd vice-president Kenneth Loo said: “For the industry, it wouldn’t be good if (in) one year, we double the capacity, and the following year, we have to halve it”.

Channel NewsAsia understands HDB has been speaking to construction companies since last year about the possibility of ramping up the supply of new flats.

There are currently an estimated 20 regular HDB contractors.

Source : Channel NewsAsia – 30 May 2011

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