Interim rental housing issues

A recent Parliament session brought to light interim rental housing (IRH) and the growing segment of people who require them.

(The income ceiling for IRH, the temporary housing scheme, may need to be raised in the future. Image courtesy of thinkstock.)

In 2009, the IRH scheme serves as a temporary shelter for families in hardship undergoing housing changes. As Housing Development Board (HDB) regulations dictate that those selling their flats have to wait 30 months before applying for subsidised rental housing, tenants of the scheme include households waiting for a public rental flat, and those waiting to move into smaller units that are being built. Typically, two families will share a three-room flat to keep rents down.

In Parliament, Bishan-Toa Payoh MP Zainudin Nordin said interim housing issues account for at least half the Meet-The-People cases he encounters. “This means that they do not have an ideal housing situation,” he said.

The minister told of families staying in interim housing since 2009 and others sharing a two-room unit, and called on HDB to widen its rental scheme and come up with “meaningful subsidies”. “I cannot imagine how school going children can study, and how parents can keep their young safe while living with strangers. I’m disappointed that we’re slow at resolving this issue.”

Joo Chiat MP Charles Chong, who saw some 15 interim rental cases for every 60 people he talked to at Meet-The-People sessions during his stint in the Pasir Ris-Punggol GRC, echoed his sentiments. He felt the mismatching of families has further worsened the issue, and cited one example where a family who had an asthmatic member was sharing a unit with a family who had smoking members. Interestingly, Mr Chong observed that IRH demand picks up when the economy improves. He explained, “These people get into financial difficulties during the recession, and sell their flats when the economy picks up. After liquidating, they are hit by debarment rules and perhaps poor money management.”

Propnex chief executive Mohamed Ismail spoke to The Straits Times of the growing number of people who do not qualify for subsidised rental housing, yet have trouble renting flats at open market rates – something similar to what was addressed in the HDB sales sector earlier this year. In the open market, three- to five-room HDB flats can cost $1,600 to $2,600 a month; in contrast public rental flats cost $30 to $275 depending on a family’s income level. “Income ceilings have risen for buying a new flat. Perhaps, given the rising cost of living, it’s time to raise the $1,500 income ceiling for subsidised rentals as well,” he suggested.

Another solution is for more flats to be allocated to the IRH scheme. There are currently about 800 flats – mostly three-room units – found in Toa Payoh, Bedok and Taman Ho Swee in the IRH scheme.

National Development Minister Khaw Boon Wan recently revealed that rental policy as a whole is under review. Previously, Mr Khaw spoke of introducing more rental tiers to the rental structure and further improving the waiting time. (The longest waiting period was 21 months in 2008. It is currently six months.) According to the minister, up to 57,000 rental flats will be ready by 2015.

Said Mr Zainudin, “While the Government’s stance is that home ownership should be as widespread as possible, the reality is that there will always be some people who cannot achieve this. We must have a solution that is good and robust.”