The #PSPHousingDebate lasted 12 hours over two days, ending at 11pm on Tuesday. I am completely exhausted but happy to have fought a good battle with Hazel and all the WP MPs. All 11 Opposition MPs voted for the PSP’s motion and rejected the Government’s motion.
We have the moral advantage from the start because affordable public housing is part of the social contract that our nation has written with all Singapore citizens. No matter what the Government says, the current public housing policies have produced the following outcomes:
• Many young Singaporeans are delaying family formation and other life milestones
• Many older Singaporeans need to sell their flat or downgrade to retire
• Future generations will have to pay higher and higher HDB prices
• Social inequality worsens as property speculation becomes the norm
PSP thinks that these are sufficient reasons to call for a reset of our public housing policies and not doing more of the same.
In Singapore’s political context, it is difficult for independent researchers and other political parties to propose alternative policies without having the same access to information as the government. Despite our limited resources, the PSP has taken up the challenge and proposed the Affordable Homes Scheme and Millennial Apartments Scheme. In particular, the Affordable Homes Scheme took reference from Dr Tan Meng Wah’s deferred land cost proposal in 2013, which shows that there are many good ideas in the public domain provided the Government remains open to them.
Everyone will agree that the Affordable Homes Scheme will allow Singaporeans to spend less on housing and save more for a comfortable retirement. Every generation of Singaporeans will be assured of an affordable HDB flat at “user price” which is the construction cost plus a location premium. We do not need to worry about that our children and grandchildren will not be able to afford housing.
We also expect that the Affordable Homes Scheme can engineer a “soft landing” for resale prices that would be healthy for the market and enable more young couples to form their families. Under the Affordable Homes Scheme, resale prices will still be firmly supported by a fall in the supply of resale flats because more Singaporeans would stay in their flat longer or for their entire life. Additionally, demand will be underpinned by upgraders, PRs and people who want to live in a specific area. After all, the resale HDB flat is still much cheaper than private property.
Under the Affordable Homes Scheme, Singaporeans can still sell their flat in the market or back to HDB. The breakeven price for resale is the user price plus the deferred land cost and the accrued interest.
If a Singaporean cannot sell in the resale market and really wants to get out of the HDB flat, he can sell it back to the HDB at the user price minus location premium and minus lease depreciation based on Bala’s Table. Hence, the depreciation will be less significant for the first 20-30 years of the lease. The location premium will be non-refundable because it is the cost that people will have to pay for buying a flat in a popular location. Singaporeans would not need to pay land cost if they exercise this option.
A Singaporean who has bought a flat under the Affordable Homes Scheme will be allowed to pass the flat on to his beneficiary like under current HDB rules. The beneficiary can choose to live in the flat without having to pay for the land cost, sell it in the market and pay the land cost with accrued interest, or sell it to the HDB.
The Millennial Apartments Scheme will provide more housing choices for Singaporeans and alleviate the shortage of BTO flats. Instead of building Prime Location Housing flats, PSP proposes that the Government should use our prime location land to build a larger quantity of smaller quality rental flats to house young Singaporeans temporarily as they wait for their BTO flats to complete.
Finally, all these schemes can be implemented with the existing fiscal resources we have and will not raid our reserves. I have pointed out the excess NIRC resources in my Closing Speech but as it was already very late, we will debate this at the Budget Debate after 14 February.
PSP will continue to engage Singaporeans on the finer details of our proposed policies in the coming weeks and months. This is a collaborative process where we will listen to the people’s concerns and also take advice from policy experts and researchers. Together, we can build a better Singapore!
Singaporeans deserve better.
For Country For People.