Oral answer by Ministry of National Development on how HDB rental housing eligibility criteria and rental rates are affected by the increase in wages arising from the progressive wage model

Nov 7, 2022

Ms Denise Phua Lay Peng: To ask the Minister for National Development (a) how are HDB rental housing eligibility criteria and rental rates affected by the increase in wages arising from the progressive wage model; and (b) whether low wage earners who may become ineligible for rental housing or who have to pay higher rents as a result of higher wages will be discouraged from renting HDB flats.

Answer:

1        Public rental housing is provided as a social safety net for lower-income and vulnerable households who have no other housing options. HDB adopts a holistic and needs-based approach when assessing requests for public rental flats, and the $1,500 income threshold is just a guideline and not a hard ceiling. Applicants will not be rejected based on income alone, as HDB will also consider applicants’ circumstances, including their household size, family support, housing budget and options.

2        For existing tenants who experience wage increases, HDB will not increase their rents during the current tenancy term. When their rents are reviewed at tenancy renewal, HDB will also consider other factors such as household size, in addition to income, to ensure that the rent remains affordable. Where necessary, HDB will exercise flexibility based on individual circumstances. In cases where the rent is increased, HDB will also ensure that the rent increase is lower than the income increase, so that tenants are always better off when their wages increase.

3        With the uplifting of wages through the Progressive Wage Model, we hope that more lower-wage workers will be able to purchase homes of their own. HDB has various measures in place to help public rental tenants move to home ownership. These include grants such as the Enhanced CPF Housing Grant and Step-Up CPF Housing Grant, the Fresh Start Housing Scheme, priority in sales exercises through the Tenants’ Priority Scheme, as well as personalised guidance on the flat-buying process from HDB’s Home ownership Support Team. Once public rental tenants sign the Agreement for Lease to buy a new flat, their rents will not increase for the rest of their stay, even if their incomes increase in the period before their flat is ready.