More people living in rental flats

More people living in rental flats
Trend due to widening income gap and growing number of lonely seniors
The Straits Times - August 21, 2011; By: Daryl Chin
More people living in rental flats
For the past 18 years, Mr Adam Teo's home has been a two-room rental flat in Toa Payoh, littered with books, toys and clothes.
Moreover, the 24-year-old is now his family's sole breadwinner, supporting his mother and two younger siblings.
Years ago, his father became mired in gambling debts, and eventually left home without a trace. Mr Teo had to drop out from his polytechnic diploma course.
He now works as a packing assistant and takes on odd jobs such as distributing fliers, just to feed the family and pay his siblings' school fees.
Ask someone like Mr Teo if he aspires to have a home he can call his own, and the answer is invariably 'yes'.
'Our goal is to buy a flat eventually, but life is getting harder, and things more expensive,' he said.
The role of the rental flat, meant for the poor and needy who cannot afford their own home and lack family support and other housing options, has come into sharp focus again following the recent National Day Rally.
Recognising that there are Singaporean families who cannot afford to buy flats, Prime Minister Lee Hsien Loong announced in his rally speech that he was raising the rental supply to 57,000 by 2015. The previous target, announced earlier this year, was 50,000 by next year.
The Housing Board's current stock of rental flats hovers at about 46,000, spread over areas such as Ang Mo Kio, Toa Payoh, Bedok, Tampines, Bukit Merah, Jurong and Woodlands.
The HDB, responding to queries from The Sunday Times, said the 7,000 new flats would be built in areas such as Punggol, Sembawang, Sengkang, Yishun and Bukit Batok, among others.
Rental flats are managed by the HDB. They come in one- and two-room options. Their monthly rents after subsidy range from $26 to $275.
As of last month, there were 1,572 applicants in the rental queue. Waiting time is about 61/2 months.
But the period of peak demand seems to have passed. That was in 2008 when there were about 4,000 applicants, with the waiting time stretched out to as long as 21 months.
More households are renting now, with the number having grown to 45,000, up from 40,556 households reported in 2008.
On average, about 1,800 rental flats are returned to the HDB per year, mainly due to tenants buying their own homes or moving out to live with family members.
Asked for her views on the increased supply, Ms Lee Bee Wah, chairman of the Government Parliamentary Committee for National Development, said it should help ease the waiting time.
During the rally, PM Lee also said the HDB would postpone the demolition of some Selective En Bloc Redevelopment Scheme (Sers) blocks. These would be turned into rental flats to cater to more families who need this leg up.
Families made up 83 per cent of the 2,300 rental applications last year, while singles made up the rest under the Joint Singles Scheme.
Under Sers, selected older blocks, some in prime areas, are redeveloped to optimise land use.
Currently, about 1,400 of the 2,200 Sers flats are offered at rental market rates while 800 are set aside for interim rental housing, which caters to the less needy.
These units are leased to operators like EM Services, LHN Group and the Katong Hostel, who take in Singaporeans, permanent residents, students and those with employment or S-Pass permits.
The HDB said 'there are several vacated Sers sites that are leased out in the interim, before demolition', and that it is looking at other Sers sites for use for rental housing in the future.
Earlier this year, some observers - pointing to the clamour for more rental flats for the needy - had urged the use of such flats for this purpose, as a matter of priority.
The HDB has also said that it has stepped up regular enforcement in stopping the illegal subletting of rental flats. There were 300 such cases from 2009 to last year, and 37 such cases so far this year.
The recovered flats have since been reallocated to needy families.
Analysts said that while the Government is tackling the immediate problem, the larger issues, centred on the housing of the poor and needy, are more complex and need further study.
Associate Professor Tan Khee Giap from the Lee Kuan Yew School of Public Policy said the 'worrisome' trend of the increased demand for rental housing is the economic outcome of a widening income disparity, caused by rapid globalisation.
Last year, while Singapore's gross domestic product hit a high of 14.5 per cent, the Gini coefficient - a measure of income inequality on a scale of 0 to 1, with 0 denoting perfect equality - also rose to 0.452, up from 0.448 in 2009.
Prof Tan said that those who need subsidised rental flats now will have difficulty affording even the most basic flats later on.
'A solid infrastructure needs to be in place to allow single-income households to become double-income earners if possible. And to ensure these families remain small, and their children are properly taken care of and educated,' he added.
About 44 per cent of rental applicant households last year earned below $800 a month, while the rest earned between $801 and $1,500 a month.
Already, Prof Tan said, the Workforce Development Agency (WDA) is partially correcting these imbalances through the retraining of workers, but 'it would take time, perhaps an entire generation, to address these issues'.
PropNex chief executive Mohamed Ismail said the larger picture is that the existing stock is just not enough to cater to people who fall through the cracks.
'Perhaps some are going through a bad patch and have to sell their homes. These people need time before they can get back on their feet. Increasing rental flat unit numbers is a clear signal that the Government is recognising the problem,' he said.
The Government, he noted, is already helping them, especially the first-timers.
He cited, as an example, new Build-To-Order two-room flats, which were expected to cost about $120,000 before the grants, costing $80,000 or less with the grants.
'Bear in mind that there will always be people, a small minority, with very different motivations from others, and who are content to rent and have no intention of owning a home,' he added.
But most rental unit residents The Sunday Times spoke to expressed optimism and hope for a better future.
Dispatch rider Muhammad Irwan, 25, said he was saving up, and that he and his mother, a single parent, will be able to afford a place of their own in six years.
'One day I hope to stop paying rent, and that my mum and I will each have a room of our own,' he said.
Technician Jeffrey Chua, 47, said it was important to focus on the happier things to keep spirits up.
'I'm not educated, and my pay does not rise with the cost of living. Everything I do now is for the sake of my two sons. I'll be happy if their future is bright.'

Seniors need them most
With new rental flats being added, the issue of who gets priority has to be looked at, noted Ms Lee.
'We need to prioritise, to give to those who need it. Besides divorcees with children, those old, lonely people who can no longer find work, and cannot afford market rental rates, deserve the most attention,' she said.
Neighbourhood-based voluntary welfare organisations (VWOs), such as the Lions Befrienders Service Association, have also noticed a rise in the number of seniors living alone in rental flats.
It takes care of 2,600 needy old folks above 65 years of age, all of whom live in such housing.
Said the organisation's spokesman: 'With an ageing population, the number of seniors living alone will increase. It's a constant challenge to find volunteers to provide them with social support and uplift them.'
The Thye Hua Kwan Moral Society's director of senior activity centres and health, Mr Joseph Cheong, said: 'This generation of people, in their 70s and 80s, are living longer with better medical care. With no social support, they have nowhere else to go, so the least we can do is to make their lives easier.'
The VWO is responsible for about 2,030 rental flats.
In Singapore, the average life expectancy at birth last year was 81.7 years, up from 75.3 years in 1990.
Ms Lucy Tan, 65, the centre manager of Peace Connect, which takes care of 2,296 rental flats, believes more can be done in housing estates to prepare for the silver tsunami.
She said some one-room units may be unsuitable for seniors as they are cut off from the residential community or have little ventilation. 'If ageing-in-place is to be encouraged, then more deliberate social planning is needed. But to be fair, HDB, by and large, has done a fine job in upkeeping the flats,' she said.
These smaller units could also cause strained relations, said Ms Peh Kim Choo, assistant director of Hua Mei Care Management Service, which is under the Tsao Foundation.
Currently, one of the ways seniors can qualify for rental housing is to register under a joint application.
'Sometimes this does not work, as it puts two total strangers with different lifestyles together in a very small living space. And that often creates a hotbed that breeds conflicts,' she added.


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