2nd reading opening speech by SMS Sim on Housing & Development (Amendment) Bill

Jan 10, 2023

Madam Deputy Speaker,

On behalf of the Minister for National Development, I beg to move ‘That the Bill be now read a second time.’

Introduction

Madam, this Bill seeks to amend the Housing and Development Act in three areas.

First, it will extend existing polling provisions for HDB’s upgrading programmes to also cover upgrading works at HDB commercial sites carried out under the Revitalisation of Shops Scheme, or in short, the ROS Scheme. Second, it removes the requirement for the date of lodgement or date of recission to be stated in HDB’s notice served under Section 59(2) to 59(4). In place of this, provisions have been introduced to prevent the Board from lodging the instrument of vesting or rescinding the agreement for a lease until after the expiry of the period during which the purchaser, personal representatives or any interested persons may appeal to the Minister. Lastly, it facilitates HDB’s operationalisation of its service of notices via additional options such as email.

Revitalisation of Shops Scheme

HDB shops play important social and economic roles in our neighbourhoods. They provide affordable and convenient essential goods and services to residents. They also form the social glue within a community. HDB shops and shopkeepers that have been serving their communities for a long time contribute not only to local employment, but also add to the heritage and character of our heartlands. 

HDB recently partnered with EnterpriseSG to undertake the Heartlands Shops Study, to examine the social and economic value of HDB shops for various stakeholders such as residents, business owners, workers and Merchants Associations. Over 2,800 stakeholders were engaged.

The key findings of study are:

First, residents hope that we can improve trade mix in HDB shops to keep up with the changing needs of the local community, and make the range of goods and services more interesting and diverse. Some also suggested that heartland shops serve as incubators for local entrepreneurs who are just starting out.

Second, residents feel that heartland shops play a special role in fostering a more inclusive community. For instance, HDB shops provide essential products and services at affordable prices and provide convenience to local residents, including older residents who may not be able to travel far.

Third, many respondents say that HDB shops contribute to the character and heritage of their neighbourhoods. Long-serving shopkeepers who know their customers well bring a sense of comfort and constancy to residents.

Given the important role the heartland shops play in our HDB estates, the Government has been reviewing how to support our heartland merchants better.

In the past one to two years, the Heartland Digitalisation and Revitalisation Committee, or HDRC for short, co-chaired by Minister of State Low Yen Ling and myself, supported heartland merchants in advancing their digitalisation efforts and growing revenue streams. The HDRC worked with agencies to introduce initiatives such as Heartlands Go Digital to accelerate the adoption of digital solutions and Visual Merchandising to improve heartland shopfront aesthetics to attract customers. Events were also organized to attract footfall. For example, the three-month long Heartlands Festival 2021, which ran from November 2021 to February 2022, resulted in 20% more footfall in participating precincts, and up to 30% more revenue among some shops. The 2022 edition of the Festival commenced last November.. Support packages such as rental waivers for our HDB merchants and Community Development Council or (CDC) vouchers were also given out to Singaporean households to use at participating hawkers and heartland merchants.

HDB also supports budding entrepreneurs and Social Enterprises through various schemes. For aspiring entrepreneurs, HDB sets aside retail spaces for allocation to start-ups in our shopping centres such as Oasis Terraces and Northshore Plaza. For Social Enterprises and SMEs with inclusive hiring practices, HDB supports them by direct allocating some commercial spaces to these businesses and provide them with a 20% rental discount.

Formal Polling for ROS Scheme

We want to do even more. To enhance the vibrancy of heartland shop precincts, we need to invest in physical upgrading. This is necessary to rejuvenate the heartland shop precincts and improve the shopping experience for customers, while retaining the character and charm of the shops, especially older ones.

HDB introduced the Revitalisation of Shops scheme in 2007 to provide funding for upgrading HDB shops and to improve the vibrancy of commercial areas in HDB heartlands. Under the ROS scheme, HDB co-funds common area improvement works at HDB town or neighbourhood centres. Examples of such works include corridor re-tiling, landscaping, installation of roller shutters and vertical blinds. To ensure a common vision and continuity of the revitalisation effort in the long term, shop owners need to co-pay a certain amount of the works, and Merchants Associations would currently need to gather 100% support from shop owners in the Town or Neighbour Centre before ROS upgrading works can proceed.

MND and HDB have engaged Merchants Associations and shop owners, and a majority shared that the current ROS requirement to obtain 100% support from benefiting shop owners is too stringent. They are unable to proceed with upgrading even if there is only a small number of shop owners who oppose the upgrading. For instance, the Marine Parade Merchants’ Association had managed to gather 77% support from the shop owners to upgrade Marine Terrace Neighbourhood Centre, but ultimately could not benefit from the scheme as a small minority of shop owners are not in favour of the upgrading. Some merchants associations have shared with us that some shop owners are less interested in upgrading because they rent out the entire shop unit, rather than operate the shop themselves. For these owners, they may be more interested in the steady rental income stream. Unfortunately, if the upgrading does not proceed, the physical environment around the shop cluster may become dull over time, and it may become less attractive to customers. Instead, a refresh of the physical environment will be a win-win – residents can enjoy a better shopping experience, and shop operators may gain more customers over time.

Therefore, MND has reviewed the ROS and is proposing to adjust the scheme to allow upgrading to proceed if 75% of the shop owners vote in favour of the upgrading. This is aligned to HDB’s upgrading programmes for residential flats. For example, the Home Improvement Programme or (HIP), can proceed if 75% of residents vote for it. Clauses 4 to 7 of our proposed amendment will extend the same framework to HDB shops. The majority of the Merchants Associations engaged have expressed their support for this move, and based on our experience with residential upgrading, we believe this to be a fair approach that balances the preferences of stakeholders with the need to rejuvenate our heartlands.

Let me elaborate on Clause 4 to 7. Clause 4 amends Section 75 of the H&D Act to introduce the definition for “commercial property upgrading works”. The term “commercial property” refers to any property permitted to be used for the purpose of carrying out business, and would include units such as retail shops, childcare centres, commercial schools, offices or sports and recreation centres. This amendment will allow upgrading works aimed at attracting footfall and vibrancy to be carried out within and outside of any commercial property in the HDB commercial precinct.

Clause 5 amends Section 77 to allow HDB to conduct a poll of the HDB shop owners for the purpose of shop upgrading works within an HDB commercial precinct, and allows for the works to proceed when at least 75% of the votes by shop owners are in favour of upgrading works.

Clause 6 amends Section 78 and empowers HDB, upon a successful poll, to recover a portion of the cost of upgrading works from all shop owners and Town Councils, including the minority who did not support the works.

Clause 7 amends Section 85(b) to allow the Minister to set out rules to operationalise the above amendments.

In our consultations, many businesses appealed to reduce the current level of co-payment for upgrading costs by shop owners, currently pegged at 20% and capped at $5,000, to make the ROS Scheme more attractive and benefit a wider community. To support our heartland businesses in their rejuvenation efforts, we are studying further enhancements to the co-payment structure, including lowering the co-payment share of shop owners. We will share more details at COS 2023.

Removing requirement for date of lodgement/rescission on HDB’s notices

Let me move on to the other administrative amendments.

Today, HDB may serve formal notice to a personal representative or an interested person to vest ownership of a flat back to HDB, if upon death of the owner, his personal representatives fail to take steps to deal with the deceased owner’s interest in the flat in the prescribed periods. In such an event, HDB would serve a notice to inform the Estate of the deceased and all persons known to have an interest in the property, of HDB’s intent to vest the property back to HDB. Before repossessing the flat, Sections 59(2) to 59(4) require the notice to include the lodgement or rescission date, i.e. the date when vesting to HDB will take effect, so that the person is aware of when the flat will revert to HDB. This serves to give him or her sufficient time to submit any appeals. However, in practice, it is not always possible to state the precise date when the vesting to HDB will take effect as this date is dependent on when the instrument of vesting is registered by the Registrar of Titles. The proposed amendment in Clause 3(a) therefore seeks to simplify the notice to exclude the requirement for this date.  

However, to retain a period of time during which a person to whom notice is served can still appeal against the vesting, Clause 3(b) inserts a new subsection (5A) that will prevent HDB from effecting the vesting of the flat until 28 days after serving notice of the Board’s intent to do so. This aligns with the 28-day period which a personal representative or an interested person may appeal to the Minister under section 59(6).

As a similar safeguard to the one in Clause 3(b), Clause 2 amends Section 50 to insert a new subsection (3A) that prevents HDB from repossessing or taking certain steps needed to vest the title or the estate or interest in a flat, house or other living accommodations until 14 days after serving notice of the Board’s intent to do so. This aligns with the 14-day period which a purchaser may appeal to the Minister under section 50(4).

Additional option to serve notices by e-mail

Finally, there is a need for HDB’s service delivery model to be updated to meet expectations of today’s HDB flat owners, and to be more environmentally friendly. Clause 8 repeals and re-enacts section 111 to provide additional option for HDB to serve notices such as via email.

However, these additional options will not be extended to notices or summons with higher gravity. HDB notices or summons pertaining to compulsory acquisition and vesting of title will continue to be served physically.

Conclusion

In conclusion, Madam Deputy Speaker, this Bill enhances the ROS Scheme by introducing formal polling provisions that I have just described under Clauses 4 to 7 and also makes administrative amendments to notice servicing under Clauses 2, 3 and 8.

Madam, I beg to move.