Oral answer by Ministry of National Development on the temporary relaxation of occupancy cap for larger HDB flats and private residential properties

Jan 9, 2024

*5504. Mr Pritam Singh: To ask the Minister for National Development with regard to the increased rental occupancy cap for HDB units from January 2024 (a) whether the Ministry foresees a rise in neighbour disputes and community dis-amenity, given the rationale for a reduced occupancy cap in HDB flats from nine to six as previously announced in 2018; and (b) whether HDB is sufficiently equipped to resolve any rise in complaints from such dis-amenity.

*5513. Ms Denise Phua Lay Peng: To ask the Minister for National Development (a) whether the Ministry can provide details on why the number of unrelated occupiers in a residential unit is increased from six to eight; and (b) what mitigation measures are taken to address the concerns of neighbours as a result of this increase.

*5527. Mr Chua Kheng Wee Louis: To ask the Minister for National Development in each of the last five years (a) what is the number of cases of infringements of the occupancy cap on the number of persons allowed in (i) HDB flats and (ii) private residential properties respectively; and (b) what is the number of cases of unauthorised renting out of HDB flats.

*5532. Ms Foo Mee Har: To ask the Minister for National Development whether HDB will limit the number of flats in each HDB block that will be allowed to house up to eight unrelated people under the new occupancy guidelines in order to ensure the existing infrastructure such as lift operations and bicycle parking space can cope with increased density of occupants in the block.

*5537. Miss Cheryl Chan Wei Ling: To ask the Minister for National Development (a) whether there is any correlation or increase in neighbour disputes with regard to the number of occupants living in a HDB unit over the past five years; (b) whether the Ministry foresees that the increased rental occupancy cap for HDB units from January 2024 will result in more of such disputes; and (c) if so, how will HDB intervene to manage it.

Answer:

          Mr Speaker Sir, may I have your permission to give a combined reply to PQs 10 to 14 in today’s Order Paper?

2.       Mr Speaker, my response will also cover matters raised in the question by Mr Gan Thiam Poh, scheduled for the subsequent sitting. I invite the Member to seek clarifications if need be. If the question has been addressed, it may not be necessary for him to proceed with the question for future sittings.

Measures to Better Meet Rental Demand

3.       Since 2022, we have seen sharp increases in rents in both the public and private rental market. Prior to the pandemic, rents had stayed broadly stable, even a bit soft. However, COVID-19 caused unprecedented disruption in the construction industry, global supply chains, and border controls, and the ensuing construction delays contributed to significant tightness in our rental market.

4.       In addition to the supply-side constraints, the delays resulted in strong rental demand from Singaporeans who were seeking interim housing while awaiting the completion of their new residential units. Subsequently, with the easing of border restrictions in 2022, non-resident rental demand also quickly recovered.

5.       To address these supply and demand imbalances, we have undertaken a broad suite of measures to support households that intend to rent. This includes significantly ramping up our public and private housing supply, and increasing the supply of flats available under the Parenthood Provisional Housing Scheme (PPHS) for those awaiting completion of their new HDB flats. Close to 100,000 public and private residential units will be completed from 2023 to 2025. We have also more than doubled PPHS supply to about 2,000 since 2021 and will further double to about 4,000 units by 2025.

6.       Public and private housing rents have showed recent signs of stabilising, with the quarterly increase in public and private housing rents moderating to 1.9% and 0.8% respectively in the third quarter of 2023, from 3.0% and 2.8% respectively in the previous quarter. That said, we expect rental demand to remain robust over the near term.

7.       That is why we announced the temporary relaxation of the occupancy cap for four-room and larger HDB flats, and private residential properties of at least 90 square metres. From 22 January 2024, these accommodations will be allowed to house up to eight unrelated persons, up from the current cap of six unrelated persons.

8.       Allowing larger units to be rented out to more tenants will increase rental supply, even as we recognise that not all landlords and tenants will tap on the relaxed occupancy cap. By increasing supply, we aim to ease the pressure in the rental market and help to moderate rents overall. This will benefit all households seeking to rent, such as Singaporean families who are in between homes, including those waiting for the completion of their new flats, as well as work pass holders who play a critical role in our domestic economy and essential services, such as healthcare workers.

Enforcing the Occupancy Cap and Minimising Dis-amenities

9.       As of November 2023, there are approximately 58,000 HDB whole flats that are rented out. This is about 5% of the approximately 1 million sold HDB flats island wide. Of these, 16% are rented out to six unrelated occupants. About 90% of these occupants are Non-Residents, with most in their 20s to 40s. 

10.      Some Members have raised concerns about infringements of the occupancy cap and potential dis-amenities that may arise from this temporary relaxation. We understand these concerns. We have put in place measures to mitigate these infringements and dis-amenities.

HDB Flats

11.      First, HDB regulates who is allowed to rent a HDB flat or a bedroom, to minimise dis-amenities and maintain the Singaporean character of our HDB estates.

a.       We have put in place the Non-Citizen quota of 8% for HDB neighbourhoods and 11% for HDB blocks, which limits the number of flats that can be rented out to foreigners in each neighbourhood and block.

b.       Non-Malaysian Work Permit holders from the construction, marine, and process sectors are also not permitted to rent HDB flats or bedrooms.

c.        These rules will continue to apply.

12.      A member asked if we intend to limit the number of flats in a HDB block that may tap on the temporarily relaxed occupancy cap, to prevent overloading existing infrastructure. While we do not currently have plans to impose such a cap, the existing Non-Citizen quota will help to limit the increase in occupants in each block, given that most of those renting at the occupancy cap are non-citizens.

13.      Second, HDB flat owners are required to seek HDB’s approval prior to renting out their flats or bedrooms. HDB also undertakes routine inspections to ensure that owners and tenants comply with the terms and conditions of approval, and do not cause serious dis-amenities to public.

14.      Over the past five years, instances of feedback relating to nuisance caused by tenants renting HDB flats or bedrooms constituted 1.5% of the total feedback on nuisances from neighbours. Where friction arises between neighbours, including tenants, HDB adopts a mediative approach and advises flat owners and tenants to be mindful of causing disturbances to others. Should the parties require additional mediative assistance, we will encourage them to tap on Government initiatives such as the inter-agency Community Dispute Management Framework and the Community Mediation Centre, which provide facilitated mediation sessions that can help parties reach mutually acceptable solutions. Finally, in instances where tenants cause serious dis-amenities, HDB will take firm action by revoking the approval for the rental of the flat or bedrooms.

15.      Over the past five years, HDB has taken action against an average of 115 cases of unauthorised renting a year, including cases where flat owners had breached the occupancy cap.

16.      As we temporarily relax the occupancy cap, we will continue to take firm action against those who breach the rules. Depending on the severity of the infringement, HDB will issue written warnings, impose financial penalties, or compulsorily acquire the flat for the most severe cases.

Private Residential Properties

17.      Similarly, owners of private residential properties must first register with URA to authorise their properties to accommodate more than six persons. In the event of serious dis-amenities, the authorisation will cease, requiring the property to revert to its original occupancy cap of six.

18.      URA undertakes regular inspections to ensure compliance with the prevailing occupancy cap. Those who breach the cap can be fined and/or imprisoned. Over the past five years, URA has taken action against an average of 244 cases per year, for breaches of the occupancy cap in private residential properties.

Temporary Relaxation

19.      Sir, the relaxation of the occupancy cap is a temporary measure that will be in place for three years, to better meet near-term rental demand and moderate rents for Singaporean households that need to rent. We will continue to monitor the demand and supply of open market rentals, as well as residents’ feedback on dis-amenities. These will be taken these into consideration when reviewing whether the relaxed occupancy cap should be extended beyond 2026.