SINGAPORE – Just four towns for now will be considered prime locations for Housing Board public housing projects – the central area, Kallang/Whampoa, Queenstown, and Bukit Merah.
And even in these four towns, the HDB will decide if a Build-To-Order (BTO) project falls under the prime location public housing (PLH) model, depending on the market value of the site and its other attributes such as proximity to amenities, National Development Minister Desmond Lee told The Sunday Times and Lianhe Zaobao in a recent interview.
The Government recognises that some locations have attractive attributes which command high market values, necessitating higher subsidies than usual in order for the HDB to launch flats at affordable prices, he said. This is where the PLH model comes into play, in requiring owners to fulfil a 10-year minimum occupation period and be subject to a subsidy clawback upon the resale of the flat, among other stricter buying and selling conditions.
“The option is not to build in those locations, but we do want to build in those locations because we think there should be public housing all over Singapore. We shouldn’t just build HDB flats in areas that don’t have good attributes in a bid to try to keep subsidies and prices down,” he said.
The decision to constrain the PLH model to these town boundaries is to give people certainty, said Mr Lee.
“People ask if PLH is an amorphous concept. No, it’s constrained to these towns at this point in time, and we look at attributes and market values,” he said.
The latter means there may be BTO projects within these four towns that do not fall under the PLH model, with the most recent BTO sales exercise in November as an example, added Mr Lee.
“If we don’t have to give additional subsidies and you don’t see a windfall on their resale, then they may not necessarily be under the PLH model,” he said, noting it would be unfair for sellers to reap a windfall given that their flats were subsidised by public funds.
Of the three Queenstown BTO projects launched in November, two of them – in Ulu Pandan and Ghim Moh – came under the PLH model but not the third, located next to Alexandra Hospital.
While the location of the project that did not come under the PLH was “visibly more Queenstown”, the Ghim Moh project has much better attributes such as being near schools, an MRT station and amenities including Holland Village, said Mr Lee.
He also reiterated that Toa Payoh and Bishan, two popular mature estates, are currently not considered prime locations because of their greater distance from the city centre.
Introduced in November 2021, the PLH model was developed after an almost year-long engagement with the public, amid growing concerns over home affordability as HDB resale flat prices soared while the number of million-dollar HDB flats hit a record high.
The model aims to keep new flats in prime locations affordable, accessible and inclusive for Singaporeans, both at the initial purchase and when these units are resold on the open market.
“By virtue of the MOP (minimum occupation period) and the conditions that keep these flats affordable, you have a sense that people who go for these projects want to settle down and want to live there long term,” said Mr Lee.
“I’m not saying that people who go for other projects want to flip, there’s a whole variety of motivations when you buy a home… It’s perfectly normal for people to want a home to live in but also a home that when they sell, if they do need to sell because their phase of life changes, appreciates in value to cover the cost of their borrowing and also makes some profit that they can use to upgrade to their next home whatever that location may be,” he added.
As more than 80 per cent of Singaporeans live in HDB flats, the Government has to cater to the broad diversity and demographics of HDB dwellers, said Mr Lee, who has long held that Singapore’s public housing policy is social policy.
“If you say the social compact for public housing continues to be that unifying element for Singapore, then you must recognise that it comes with these implications – people who have more purchasing power and, on the other hand, people who have much lower income that you have to provide for as well,” he said.
But should the HDB only cater to middle- and lower-income households, the housing social compact in the future will be very different from today’s, he said.
“It may be that you are looking at a very different housing social compact in future where the vast majority of Singaporeans live in private housing. Is that what we want? I don’t think in our Forward Singapore housing conversations people have supported that,” he said.
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