By Leong Sze Hian
I refer to the article “Life’s a beach, but it’s no holiday: Parents’ irresponsibility, greed and policy are depriving kids of homes” (ST, Mar 9).
The article begins by mentioning how a certain Mr Yusof lost his job as a technician in early 2006 and was unemployed for the next nine months. Living expenses ate up most of his savings. Unable to pay his loans, he was forced to sell his home in 2007.
But how can this case be cited as an example of an irresponsible parent whose greed deprived his children of a home? Isn’t this an example of a parent who was forced to sell his home by external circumstances?
The article also states that Mr Yusof was given a bank loan large enough to buy a four-room flat when his $800 a month income was the only source of revenue for his family of six”.
Had the Government not allowed banks to indiscriminately grant housing loans for HDB flats from 1 January 2003, tens of thousands of Singaporeans may not have ended up in arrears, lost their HDB flats or CPF savings, or made bankrupt.
To some extent, the woes of the homeless cannot be attributed entirely to them, as Government policy may have played a part too.
Mr Yusof was said to have sold three Housing Board flats in nine years, netting $90,000 in profits, before taking out a hefty bank loan to upgrade to a four-room flat in 2005, a move that cost him dearly.
In this instance, wasn’t Mr Yusof simply subscribing to the government’s much touted asset enhancement policy which involves constant upgrading and ever rising HDB prices?
If you have a policy that allows Singaporeans and permanent residents (PRs) to buy any number of resale HDB flats and sell after only one year of MOP (Minimum Occupation Period), can you fault people for trying to make money in this manner?
Mr Yusof’s main problem wasn’t due to his profiteering from HDB flat sales, some of which he may have ploughed back into subsequent flat purchases. His problems arose because he lost his job and could not find another one for nine months.
Even if he had bought just one flat in his lifetime, he may still have lost his flat and became homeless when he lost his job.
Since his pay was only $800, maybe he was trying to get some cash out of his HDB flat to supplement his meagre income. Otherwise, how do you feed a family of six and make ends meet with a salary of $800 before CPF deductions?
As banks generally do not lend more than a third of one’s monthly income for the mortgage monthly repayment, what exactly was the quantum of the “hefty” bank housing loan?
Mr Yusof could not even get a job that paid the paltry $800 that he had lost. Why is it that the highest unemployment rate among all the categories of workers belong to the cleaners, labourers and general workers?
To what extent has Government’s labour policy on foreign workers contributed to Mr Yusof’s problem, such that he could not even get an $800 job?
Why is it that those jobs which we are constantly told that Singaporeans do not want have the highest unemployment rate? Does it mean that even cleaners can’t compete with foreign workers to get a job after they lose their current cleaner’s job?
The article also mentions: “Some time ago, HDB discovered that one retired couple in the rental flat queue had no income, but owned nine private properties worth $6 million. Such people delay the truly needy from getting shelter”
Instead of just citing examples like this couple or Mr Yusof, can the HDB provide statistics on the percentage of rental flats whose owners are similar to the couple mentioned, or what percentage of rental flats are occupied by people who are in Mr Yusof’s situation?
By the way, why do we always get examples of irresponsible Singaporeans who lost their HDB flat due to bank loans and not that of a HDB loan?
As more people have an affordability issue with rising HDB prices due to HDB policies, as evidenced by the 30,770 HDB loans in arrears over three months as of September 2009 (not including HDB bank loans), more people will become homeless.
The article goes on to mention the case of a 27-year-old divorcee who earns $800 a month and has never taken an HDB loan, but who has been repeatedly denied the chance to rent or buy a resale flat with her six-year-old daughter because the child was born out of wedlock.
The article stated:
“The duo shared a one-room flat with her siblings for a year. But the others drank and smoked heavily and brought home strangers at night. After this newspaper inquired about her plight with the HDB, she was told she would be given a rental flat on ‘compassionate’ grounds. She faces a year-long wait for a home – no thanks to those who could find some other place to stay but who try their luck for a rental flat.”
If the HDB did not give 2,200 SERS acquisition flats to managing agents like EM Services to rent out to tenants like foreign workers, would this mother with a six-year-old daughter have to wait a whole year for a home?
As I understand that the current rental queue is about 4,000 plus, with each flat housing two to three families, does it mean that no needy family may have to wait at all, if all the flats rented to foreigners were given to Singaporeans?
The root cause of the problem of the homeless, or absence of rental flats available for the homeless, may be due to the HDB’s poor planning in projecting supply to meet demand, and policies that keep driving up prices like its Market Subsidy Pricing policy.
In support of my above remarks, I would like to refer to media reports on the debates in Parliament, in which it was said that the HDB will not go back to the former Build-to-sell (BTS) system from the current Build-to-order(BTO) system.
The reasons given was that in the wake of the Asian financial crisis in 1977, the HDB was at one point left with 31,000 unsold flats which took five years to clear, and that the waiting time for BTS was six to seven years compared to the shorter BTO waiting time of around 3.5 years now.
I think the reason why the HDB was left with 31,000 unsold flats was due primarily to the fact that the wrong type of flats that were built.
Had the flats built been 2, 3 and 4-room flats, instead of 5-room and executive flats, there may not have been so many unsold flats.
As to the BTS waiting time being six to seven years, I think this was the longest waiting time in HDB’s history because of the relatively lower HDB prices then and thus the high demand at that time.
In fact, the waiting time was zero during the period when there were unsold flats.
The problem with BTO may be that since we are not projecting demand in the future, and given that the typical Minimum Occupation Period (MOP) is five years, it may take about 8.5 years (3.5 years to build plus 5 years MOP) before a flat is available for the resale market.
This may have lead to the high increase in resale prices in recent years, with 79,000 and 59,500 new permanent residents (PRs) in 2008 and 2009 respectively.
Since new HDB flat prices are pegged to resale prices under the Market Subsidy Pricing policy, this may also have caused the affordability of new flats to be an increasingly contentious issue.
The HDB should not take the easy way out by not planning ahead, as no private developer or public housing authority in the world can do away with the need to project demand and supply.
For without planning and projections for the future, not only will PRs but also foreigners who may need to rent HDB flats may find the supply so inadequate, that prices of both new and resale flats, and rentals, may continue to escalate in the future.
Moreover, under a “BTO only” system of public housing, down-graders and those who cannot pay like the 30,770 flat-owners who were over three months in arrears, as of September 2009, may have no new smaller flats to down-grade to.
Finally, why is it that there is such a high number of 31,000 flats left unsold, and why was never disclosed until now?
_________________________________________________
Related posts:
- Straits Times’ outrageous opinion piece on homelessness
- HDB housing policies – tilting the advantage towards PRs?
- Providing affordable housing – HDB should re-look policies
- PAYM forum: Now I know why flats are “affordable”? (Part 2)
- HDB’s inflexible policies will result in more homeless S’poreans
I believe there is a continous challenge of building more flats in land-scarce Singapore.
“I believe there is a continous challenge of building more flats in land-scarce Singapore.”
We compounded the problem by indiscriminately importing hundreds of thousands of foreign workers.
Land scarcity is a myth, perpetuated by the government and developers to keep land prices high. Just look at how many TOP condos and other property are standing empty now. It is a disgrace to talk about scarcity of space when so much of it is wasted for investment purposes.
The government seemed to believe that our dependence on foreigners will only cease when the birthrate shot up to 2.1 child per woman, instead of depending on the existing population. There are many countries with less than a million people and they don’t have such an aggressive immigration policy. Even Malaysia looks desirable now with it’s abundant and spacious land. Have we taken count of the number of Singaporeans migrating there or owning homes?
The Government through the media is showing us that they are in a state of denial. Whether there were silly financial decisions made by the homeless or they were displaced from their jobs by foreigners; this is a serious social issue for the Govt to deal with because they are Singaporeans.
The example of 31k flats not sold reminds me of a Swiss friend who told me that every year Rolex will make a certain number of watches below that of the anticipated demand. That way demand is stronger than supply, keeping the value of Rolex watches up.
The government should stop profiteering from the sale of HDB flats and focus on providing affordable housing for all Singaporeans. This government is totally out of sync with the voters. Let the voters remember how this government is serving itself rather than the people.
THousands and thousand of PRCs imported and converted to citizens, you tell me…. those stats provided could be a fraction of the actuals. So many of them around us today… look at the MRT and transport systems, 1000s of them.
And best of all, they are offered jobs ie IRs and Singaporeans are left out.
Linda Lim,
hdb has repeatedly stated that they are giving heavy housing subsidy to Singaporeans to buy “affordable” dhb house. Last year, hdb even announced that it had a deficit of $2billion. HDB will never admit that it is making obscene profit from Signaporeans.
those who believe them must be daft. Sadly there are still many who choose to be daft.
Well he shld have factored in loss of job.
He benefited from the system and so when he loses, tazlife. Sad for the kids and Mrs though. S’pore can afford to help the wife and kids. Sometimes moral hazard has to be accepted.
the government is too in synch with the economy and out of synch with the people. the synchophant grassroots leaders only know how to wayang and paint rosy pictures for the MPs they report to.
we need to import cheap foreign labour because that’s the only way the govevrnement knows how to expand the economy. our 20+ years of productivity drives have come to naught.
yusof is a good example of the failed productivity drive. any basic driver position will pay $1200 and up. a cabby will earn about 1.5-2k. so what’s his problem then? mat mentality or too much faith in his god to provide for his material needs? 4 kids on $800/mth… are mendaki handouts that generous??
I don’t think we can fault Mr.Yusof without knowing in details what were his reasons for changing flats, was it solely for profit? Or was it that he wanted his family to have a better living condition? With 6 members, it would be a squeeze in 3 rm or smaller flats, especially when the children gets older..
“A Tan
Mar 12, 2010 10:49
Sometimes moral hazard has to be accepted.”
That is true. By calling a spade a spade. Not by twisting a spade into some froggie story (remember kingdom of frogs).
This article lacks the clarity that it should have.
The topic is serious.
HDB needs to have a good projection of the future. Imagine spending monies on a telephone network without knowing whether if we need to unroot it for expansion 20 years later.
The reason why they are not planning ahead is because they are using HDB flats to mock up liquidity unlike westerners who uses bonds. Much like the way they use land sales to mock up liquidity.
This is the kind of things this small asshole MBT has imposed on us.
“Last year, hdb even announced that it had a deficit of $2billion.”
The problem with some higher mortals is that they are treating (insulting) the general population as a bunch of unthinking brain-dead morons. Subsidy & deficit, who do they think they are trying to kid ? Wanting to be a financial hub some more !
HDB keeps using the old “31,000 unsold flats” excuse like a broken record. It’s only a valid excuse if HDB was a profit-driven corporation, where it becomes important to recuperate the costs of the building those flats before the banks start calling you for their money back. HDB is supposed to be serving (presumably) us. They’re building us with our money. If you had 31,000 unsold flats, even HDB has to concede that they have all been sold since then. If not, HDB needs to start examining why they took so long to sell–bad location, bad design, too expensive, not served by transportation, not meeting people’s needs? Instead, of course, just typical of them, they blame Singaporeans again, essentially saying “I build, but you dowwan, so it’s your fault I don’t build more or build faster, lor.”
First they took away our money to build those flats which are supposedly meant for us as promised. Someone saw money making opportunity coming in, they they hold back and accumuated those flats to be sold in cash to the foreigners instead. Remember, someone exposed later that they are making appr. 70K profit for a 4rm flat transacted, they are cornered and now they blamed the singaporeans for being choosy. MBT even mentioned that hdb lost some 2billions for subsidising to the people. Not long ago, the people discovered blocks of old flats which are supposed to be demolised years back are actually kept back to make more money out from renting to the FW. Instead of providing the citizens to buy a decent roof over their heads, they even washed their hands off and pushed the citizens to seek higher commercial bank loans but they never tell you how many lower income citizens are not even qualified for commercial loans and is not their problem anymore. You lost your jobs, its game over for you and your family, the banks will come and seize your flats, simple as that. Everything they do to the citizens, step by step till to this very day is too obvious to the core that they are not interested at all to serve the people anymore other than accumulating all those billions for who? its too obvious. Even the devils know how to protect their own children, how about our so called dear founding father of singapore???
$800, 6 kids? Seriously? I have no pity for Mr Yusof.
“31,000 flats left unsold, and why was never disclosed until now?” Because if such a number was made public, the market would be depressed further and the supply might take an even longer time to unload. Such disclosure would only display their incompetency in forecasting, projections of demand and handling of cashflow in their own budget.
Land scarcity not the root prob. More likely overpopulation (even before we hit the preposterous target of 6.5 million!). Then factor in the ridiculously high cost (but lower standard – cramped public places and transport packed like sardine cans) of living these days and higher unemployment rates, fewer citizens can afford the 5-room flats. All in a chain cycle.
IMHO, they didn’t build enough 3 to 2 room flats and overbuilt four-five room flats because they really believed their economic policies would ensure that no one is left behind. (Swiss standard of living, IT city and all that stuff in the 90s) Hence they are sincerely baffled and bewildered when reality proves otherwise. But it’s not the model’s fault. It’s people’s fault for not sticking to the model.
As I have mentioned before, Public housing is for citizens.
No other country that I know, allows PRs to buy public housing. Handle the root of this problem, we will see a happier citizens.
you need to know where are the 31000 unsold, it could be those asking for $700k to $1.4M flats.
minimum amt in special account raised to 40K:
only the 1st 20K earns 4%.
The remaining 20K earns 2.5% in the future.
What is the point?
Given that this is a sum that is held for at least 20 years.
even 4% is fucking low.
At the end of 20 years with 40K kept initially, you will end up with 87.6K.
Now, with the new scheme or tiered interest rate, you end up with 73.2K at the end of the same period.
A decrease of 14.4K over 20 years.
We have not even reached the minimum sum yet.
And Tan Kin Lian was complaining about low yield from insurance when most people don’t put up half the contributions to the special account to insurance.
What a joke!
F**ker Gan is slapping us with a tax of 14.4 K over 20 years masked as a prudential measure against misinterpreting and I wonder why we took it like that calmly…
Cambridge didn’t teach him ethics apparently.
No child in Singapore will be left homeless,
says Dr. Balakrishnan
According to Community Development, Youth and Sports Minister Dr. Vivian Balakrishnan, no child in Singapore will be left without a home, and officers will intervene to ensure this if a family is in danger of losing their home. This is in response to a question raised in Parliament over the issue of homelessness in the country.
1. LKY ever proclaimed to pay less than 1% of our GDP (2009 US$240) to our Ministers is good deal. So I think Warren Buffet must be a lousy deal maker. As a CEO of Berkshire Hathaway (market cap > US$200B , almost same as much as Singapore GDP, drew only US$100,000 for his salary.
2. Government also claimed that they don’t control the prices of resale flats, but they could make sure it stays affordable.
3. HDB blasted BTS scheme was lousy, as the waiting time is 6.5 yrs. But the truth was they had 31,000 unsold flats lying around.
Why can’t they just be more humble?
They must be very busy trying to justify the $2billion deficit by HDB. Thus, they try very hard to confuse Singaporeans that holding the 31,000 unsold flats (grand mother story already anyway) was a super duper burden for them, and the old scheme was lousy. Only till MBT come to the rescue.
I think they also hint that previous (equally highly paid) MND Minister sleeping all the while till MBT took over.
Maxim goes….”When you can’t convince the people, confuse them.”
Can somebody explain to me why holding a supply of 31000 PUBLIC HDB apartments is a bad thing? They don’t depreciate and are instantly available in urgent cases…
For the love of money is the cause of all evils – “growth at all costs” – leading to the great influx of cheap foreign workers, which caused greed to breed. By cheap foreign workers, I don’t mean the construction/contract manual labor recruited en bloc who live on site or dorms provided by their employers. I mean those who are here because of our open door policy, to compete with Singapore citizens for jobs, etc.
I am just sick and tired of this government putting foreigners ahead of citizens.
I am voting for change.
There is no other choice.
I over heard two foreigners from India speaking over lunch today next to me. One asking the other if he applied for EP ( employment pass ), he said no, he applied for PR and got it ” quite fast” !!
We should acknowledge that there are people with poor financial planning out there. To have a family of 6, have a 4 room flat on an income of $800 is evidence of poor planning. As it is, to have two kids is taxing on income, even for a mid-income family.
I think Mr Leong missed the point about rental flats and EMS. EMS provides rental flats at market rates while HDB provides rental flats at subsidized rates. Mr Yusof and others can always opt for rental flats @ market rates if they want because they are available on the market.
So the thing is shortage here is not the physical rental flats- there is always some available on the market. The thing that is really in ’shortage’ is subsidies. The main question for Singaporeans is- how Singaporeans want our society to evolve? Are we willing to shoulder more taxes for solidarity with less fortunate? And if we are, how much moral hazard/free-riders are we willing to accept, at the expense of those who have been hardworking and prudent with money?
I think all societies have different answers to these questions. The Danes have accepted the concept of ’solidarity’ and have been willing to pay 50% taxes to get equality. They also have accepted that some people will leach off the system (e.g. students who have done 9 yrs in university because they get allowance while studying).
For Singapore, we have to figure out our own right ‘mix’ and what we want.
lim
Gd pt.
notalone
I hope you are aware that Mr Buffett is world’s third richest man because he owns shares in Berkshire.
So his salary is peanuts.
The bank is really scheming. Loan money to someone who wants to buy a high-end apartment with a 99% possiblity of defaulting to hopefully reposses the property. Do this as long as the property is sound and property market trend is going up.
Can capitalism be self-regulated in this small Singapore? I think not. It is not like we have multiple banks to choose from or an experienced opposition to closely scrutinise the details of the incumbent.
Instead of admitting the mess they themselves have created, the govt deems people who cannot pay their mortgage as “greedy and lazy”.
You must admire the moral ethics of our MSM, putting the entire problem of homelessness on one man’s shoulder. Are they saying every homeless Singaporean is greedy and lazy. Seriously, our moral compass is really screwed. I realise we are not a welfare state, but if you don’t provide the fishing rod, how is anyone going to learn how to catch fish?
Singaporeans has been so badly manipulated by those MIW all these years, the system is so corrupted that 1 man have successfully manipulated his entire team into corruption by authorizing to pay his own gang with millions out of the singaporeans pocket, just to keep himself in power.
I think the housing problem has been, and will continue to be, plagued by the ever-increasing population in Singapore. No amount of new or existing policies will be able to solve the problems arising. Imagine, Singapore is globally ranked 3rd in terms population density (http://en.wikipedia.org/wiki/List_of_countries_and_dependencies_by_population_density), only surpassed by Macau and Monaco. While it is a simple averaging of total population over total land area, it does gives a gauge of how dense we are. Our absolute population (~ 5M) is more than New Zealand (~4.3M), but our land area is only 710 square km compared to 270,ooo square km of New Zealand. Go figure…
I guess most singaporeans not buying HDB did not look into it closely – 3.5 years if you are lucky or buys a 2-room flat.
Check out the applicants versus flat ratio here – http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatYourAppl?OpenDocument
A summary for the past BTOs and sale of balance flats
Sale of balance flats (Oct 09) -2132 flats, 21452 applicants (1 to 10)
BTO boonlay/sengkang (Oct 09) – 1200 flats, 4487 applicants (many 2 and 3 rooms leftover, wrong type of flats built)
BTO punggol (Nov 09) – 1078 flats, 4678 applicants
BTO Dawson (Dec 09) – 1588 flats, 9857 applicants
BTO BukitPanjang/Sembawang (Dec 09) – 952 flats, 2888 applicants (too many 2 and 3 rooms, wrong build ratio)
BTO CCK/hougang (Jan 10) – 1291 flats, 7077 applicants (record for 4-room flats to applicants ratio set)
BTO punggol/woodlands (Feb 10) – 1534 flats, 6648 applicants
Analyzing the number of applicants to flats, I find 4-room has the worst ratio and 2-room are generally left-over. Obviously, to put that “affordable” roof over everyone’s head they had to reduce the size to 2-room units and nobody is taking it. So even if you did apply to all BTOs with 4-room in mind, ya typical person would need 4-5 tries…
With regard to the 4-room ratio in limbang green, HDB response me that the land is only suitable to have that kind of 4-room due to the land.
I cannot really talk back to them unless I can hired some land expert to check the land. If not they say what, I have to accept.
Maybe we need a group of land expert to help the poor citizen to check the land so that we can ensure all BTO are actually design best for the citizen.
Spoke to a friend in HDB. Quite high up guy. told me that in confidential briefings it is admitted that the entire policy for National development, not just housing, was caught off guard and unprepared for influx of foreigners. So you see, its not just HDB pblm but an entire management failure of MND. he also said its obvious MND and other ministries not coordinating. one ministry say more foriegners the other didnt know it was happening so didnt plan infrastructure for it.
i replied that this is nothing confidential because it is so obvious that policies under LHL’s Leederslip are hotch-potch and knee-jerk in nature. nothing coherent or long-visioned. everyone that has eyes can see that LHL has no Leederslip qualities and his abilities are pretty mundane. So if you have Leederslip under LHL like that, what can u expect from his team? Who is the minister of MND ah?
i am sick n tired of this government monopoly where the losers are fixed to the people.VOTE PAP OUT!PROBLEM OVER N TATS IT.
Yes HDB have a deficit because they acquire land from SLA which sells them at fair value.
SLA will release the land to them at the reserve price(minimum) if im not wrong. If to private property, they will have to bid for the area and still have to meet the reserve price
In essence, your hdb is already undervalued
i just guess that all that we speak falls on deaf ears…Even at the regular MP Meeting session nothing comes to a conclusion.Still HDB has a higher end finally.I hate seeing their reply letters.