Radical idea: Remove income ceiling for new Housing Board flats

Not one to shy away from radical ideas for housing policy, National Development Minister Khaw Boon Wan floats another talking-point suggestion: Do away with the income ceiling for new Housing Board flats.

If he had his way, he would remove the income ceiling for a Build-To-Order (BTO) flat to give everyone a shot at living in them, Mr Khaw said in his wide-ranging interview.

Noting that HDB flats are as essential to the Singaporean way of life as national service and hawker food, he said: "I like the idea of every Singaporean, rich or poor, having a stint in HDB living... and not growing up your whole life in a bungalow, for example."

Mr Khaw - who stressed it was just his personal opinion that he was throwing in for discussion - was explaining the effect of the income ceiling on HDB's market share. About 80 per cent of residents in Singapore live in an HDB flat.

The higher the income ceiling qualification to buy one, the more people can qualify for a flat.

A household cannot earn more than $10,000 a month to qualify for a BTO flat, and not more than $12,000 for an executive condominium.

When Mr Khaw moved over from the Health Ministry to his new post in 2011, he raised both income ceilings that very year from $8,000 and $10,000 so that more young couples could qualify for new flats.

The $8,000 limit had been kept unchanged since 1994 by his predecessors in a bid to naturally shrink HDB's share of the property market as incomes rose.

"The ceiling was not adjusted because at that time, they thought we should not expand any more of our market share," he recalled. "But I came in, I adjusted (because) I have a slightly different view."

This is that living in HDB flats would give people more chances to interact with others of different races and incomes, although the more disadvantaged would still receive a higher housing grant from the Government.

But Mr Khaw is quick to clarify that this sentiment does not mean that the HDB should aim to provide 100 per cent of Singaporeans' housing needs.

Referring to the current 80:20 split between public and private housing, Mr Khaw said: "Do we need to grow further? I don't think so. That we leave to the market."

But his philosophy is that "if a rich man's kid wants to apply for a BTO flat, provided he stays the five-year minimum occupation period, there's nothing wrong with that to me".

For his part, Mr Khaw said of his suggestion: "That's one view. Whether ultimately we decide that it's good, we'll see. "We can discuss it with Singaporeans."

Source: The Straits Times –13 April 2013