HDB - Public Housing

When we became Independent in 1965, Singapore was a third world country with underdeveloped economy. There were massive unemployment, shortage of schools and poor housing with lack of facilities.
 

With swamp and slump shanties, the government began to resettle the villages and farmers. When the fire razed through the squatters in Bukit Ho Swee, the government speeded up the process in building new flats to house the homeless caused by the fire.
 

I witnessed the transformation of Singapore landscape from rural village in the 50s and 60s to urbanised satellite new town in the 80s and 90s. Singapore became a metropolis today with infrastructure and facilities of the first world.
 

It was the promise and priority of the government to provide permanent shelters for all Singaporeans. It was not only a shelter but affordable housing. It was the dream of home ownership that the government started with the public housing programme. Under the HDB (Housing and Development Board), the government started with low cost housing programme speedily. It was with remarkable result that 90% of the population bought and stayed in subsidized public housing.
 

With better trained architects and engineers, the HDB started to improvise with town planning. They built with better design and quality finished materials. HDB allows buyers to tap on their CPF savings to pay for their flats. HDB also help to provide direct housing mortgage loan and give grant to the first timers and for children to buy their own flat and stay close to their parents.

The investment in an asset on public housing gives security and protection to the aged and retired Singaporeans. The asset can be converted to cash in time of emergency. Some out of desperation, cash-in and sold their HDB flat to pay for their medical bills or debts. However, some would take advantage on the inflated value and cash-in on their HDB flat. They would squander their money from the sales proceeds and spent lavishly on their lifestyle or satisfied their desires.

Actually, there are alternatives or solutions to get some reliefs from their existing HDB flat. One is to sublet one of the rooms to collect monthly rental to support their livelihood. Two is to down-grade to a smaller unit or buy a studio apartment, if they are eligible, and keep the balance of the cash from the sales proceeds to support their living expenses. Three is to consider the "Buy Back Scheme" if they meet the HDB's criteria (age and size of the flat). It must be the last resort to sell their HDB flat. An important factor many residents neglect or ignorant is to pay the levy when they sell their flat and later wish to buy a HDB flat for second time. Many will cash-in and use the money from the sales proceeds for other purposes. They later found that they are eligible to buy the HDB flat for second time but they do not have cash to pay the levy they owe to HDB. Normally, the amount is substantial and can be thousands of dollars.

In the last National Day Rally, PM said that MND is working on "Fresh Start" to give those who have previously bought twice the HDB flats another chance to buy and own a new HDB flat. However, there would be criteria attached to the "Fresh Start" scheme so that buyer cannot abuse the system. One effective way is to control on the resale of "Fresh Start" flat. The owner can only sell back the "Fresh Start" flat back to HDB at their original purchased price.

HDB flats are heavily subsidised and it is only fair that HDB imposed levy on the re-sales of flat. Also some might have received grant from the HDB at the time of their purchase and again, it is only fair they pay back the grant when they sell their flat. If one compare the HDB public housing to a private condominium, the difference is vast and it can be as much as 5 times or more on the purchase values, depending on the location, design and size (floor area) of the private unit.