Speech by Minister Lawrence Wong at the Committee of Supply Debate 2020 - Building our Future City and Home

Mar 4, 2020

As we tackle the ongoing COVID-19 outbreak and its economic fallout, we are reminded once again of how small and vulnerable Singapore is, and how exposed we are to external forces beyond our control.

But I am confident that Singaporeans will rise to the occasion. We are a resilient people. We have always faced tough odds. We have confronted many difficult challenges before, in our nation’s short history. And each time, the government and citizens rally together; we deal with the issues head-on; and we emerge stronger and surer of what we can achieve together.

Building Our Future Home

Take housing as an example. 60 years ago, this was one of the most pressing issues on the government’s agenda. We had a major housing crisis. Many Singaporeans lived in overcrowded slums, and the living conditions were appalling. The British could not solve the problem. They said it was not possible to build so many flats in such a short period of time. But we proved them wrong.

HDB was formed in 1960; it quickly ramped up the building of flats, and addressed the acute housing shortage. My family is a beneficiary – my grandfather was a fisherman who lived in a kampong in Tanjong Rhu in the 50s; and later when his children grew up and married, many were able to move out and purchase their own HDB flats, like my parents who got their flat in Marine Parade in the 70s; likewise many in my generation have benefited; and now I see the next generation – my nieces and nephews – getting married and purchasing their own HDB flats. One just managed to get a flat in Bidadari and he is very happy.

Singaporeans all over the island will be able to share similar stories. Through home ownership, we have a tangible stake in our country and a share in our nation’s progress. Through public housing, we all grow up together regardless of backgrounds, and we forge a stronger sense of community and common identity.

Today, HDB flats are an integral part of our Singaporean way of life. There are now more than one million HDB flats, home to about 80% of our resident households. And of these, 9 in 10 own their homes.

Enabling home ownership through HDB has been one of our most successful social policies. Many have called it one of the most successful public housing programmes enacted anywhere in the world.

For this we have to thank generations of MND and HDB officers, past and present, who have worked hard to make all this happen.

So we have much to be grateful for when we look back at what we have achieved together. But we must never be complacent. That’s why we are always looking for ways to make HDB living even better. So let me touch on three areas.

Keeping Housing Affordable and Accessible

First, it is our evergreen mission to keep public housing affordable and accessible, so that every Singaporean household can have a home to call their own.

That’s why we continue to sell HDB flats at heavily subsidised prices, and provide generous housing grants on top of that. In particular, with the Enhanced CPF Housing Grant (EHG) introduced last year, first-timer families can enjoy a grant of up to $80,000 for a new flat. If you buy a resale flat, you can get up to double the amount, or $160,000, in grants.
 
These considerable subsidies keep HDB flats affordable. Today, HDB flat prices remain at less than 5 times of median household income. You cannot find such affordable housing in any other major city in the world. This ratio, the house price to income ratio, is nearly 10 times in London, Los Angeles and Sydney. In Hong Kong, it’s more than 20 times.

Our affordability benchmark goes beyond the median income. Take the example of a first-timer couple with monthly income of $5,000, which is near the 30th percentile of resident household income.
 
They can buy a 4-room flat in a non-mature estate at a subsidised price of $330,000, and they will receive $45,000 in grants. So inclusive of grants, the flat will cost less than 5 times their annual income.

The grants can be used to pay the down-payment. So effectively, they need zero upfront cash. Then they take a 25-year housing loan, and their monthly mortgage is paid largely using their CPF savings, with little or zero cash outlay.

That’s our basic housing commitment to every generation of Singaporeans. It’s a housing commitment not just to the higher or middle-income groups, but we will also ensure that the lower-income Singaporeans benefit. So like the example I gave just now, first-timers, even at the 30th percentile of household income can purchase a new 4-room flat in a non-mature estate, and service their housing loan with zero or very little cash outlay.
 
For the vast majority of first-timers, the Singapore dream of being able to own your own homes is secure, and we will make sure of that, both now and in the future.

Of course, we also want to have more affordable flats in the mature estates, and a wider range of flat options to choose from, and Mr Gan Thiam Poh and Mr Chong Kee Hiong both spoke about this. But it is more challenging to do so in mature estates, due to the limited space for new flats in these estates. In some prime locations, the prices of resale HDB flats are beyond the reach of many young couples just starting out in life.

If this trend continues, it will mean that certain public housing estates can potentially become exclusive areas that only a few can afford, and then this will lead to greater social stratification.

So we do have to do something about this. We cannot resolve this issue through our existing model of HDB flats. That’s why I’ve shared earlier that MND is working on a new model for BTO flats in prime locations.

The basic idea is to sell these flats at more affordable prices. But the flats will come with tighter conditions imposed. This is a major change which we are studying and thinking through very carefully, as it will also have an impact on the resale market. We will share more details in the coming year when we are ready.

Besides affordability, we will also help Singaporeans to access their flats more quickly, and several Members like Mr Chong Kee Hiong and Mr Mohamed Irshad spoke about this. We continually review and improve our sales processes to achieve this. 

For new BTO flats, we give priority to those looking for their first home. That’s why virtually all first-timer families have been successful within their first three tries for a BTO flat in a non-mature estate. We have also introduced BTO flats with shorter waiting times of two to three years because we bring forward the construction. 

Since last year, we have started sharing information on upcoming BTO sites six months in advance, instead of just three months. We will try to do more as suggested by Mr Gan Thiam Poh, but I’m afraid it is not so easy to project forward for more than six-months; it will be challenging to share this information too far in advance, because there may well be unexpected changes along the way.

Some households may need a flat more urgently. That is why we also offer our balance flats for sale, many of which are completed or near completion. Today we have the Sale of Balance Flats, or SBF, and if there are still unselected flats after the SBF, we pool all of them together and release them through what we call the Re-Offer of Balance Flats, or ROF, exercises. 

The initial take-up of the ROF flats has been positive. But we’ve received feedback and requests for the ROF to be done more frequently, instead of just twice a year. So last year, we tried putting out some unselected flats on an open booking system for people to apply all year round. 

Now that we have some experience with this open booking system, we are ready to extend it further. We will do away with the standalone ROF exercises. Instead, the unselected SBF flats will be pooled and offered directly for open booking right away, without going through another round of balloting. This will enable home-seekers with urgent needs to access flats more quickly.

Effectively, with this change, there will be three main ways of applying for a HDB flat. You can go for BTO flats, new flats, which will be released four times a year; you can apply for a balance flat which will be put out twice a year; or you can go for open booking and apply online at almost any time of the year.

Supporting Diverse Housing Needs
 
That is our first priority to ensure affordability and accessibility of flats. Second, we also support the diverse housing needs of different segments of Singaporeans.

For needy households without other housing options or family support, we will continue to provide them with public rental housing. Over the years, HDB has steadily increased the public rental supply. The waiting time is now less than two months for applicants who are not particular about location. For those who want specific locations, the waiting time may be longer depending on availability of units in that particular area.

Several members, including Ms Anthea Ong, Mr Lim Biow Chuan and Dr Lily Neo, asked for bigger rental units, and dedicated units for single tenants. SPS Sun Xueling has also explained our thinking on this matter. We would in fact very much like to accommodate all of these requests. The key constraint we face is one of land supply. 
 
We have to ensure that the demand for both new rental and new sold flats in Singapore can be met on a sustainable basis, not just today, but over the coming decade and beyond. That’s actually getting harder and harder to do, as our island gets more built up. So we do need to take a pragmatic approach.

For single tenants, as SPS Sun Xueling said just now, most are prepared to share, and are able to live in a rental flat together. For the few with medical conditions, we are prepared to consider the requests on an exceptional basis, and allow them to stay in a rental flat by themselves.

For families, especially with children, the majority already live in our 2-room rental flats. For very large families, we do our best to accommodate them. For example, for multi-nuclear families, we can offer them two rental units in the same block. On a case-by-case basis, we will be prepared to offer larger families a 3-room rental flat.

Ms Anthea Ong made a point about occupancy caps, and I should clarify that these are caps imposed on HDB owners renting out their flats. The occupancy caps do not apply to family members living together, be it in an owned flat or a rental flat.

At the same time, we will continue to support public rental tenants towards home ownership, and several Members also spoke about this including Mr Gan Thiam Poh, Mr Arasu Duraisamy and Dr Lily Neo. We have announced several measures on this last year, and SPS Sun Xueling has shared the progress on these initiatives.

For divorcees, we understand and recognise that their housing transitions can be stressful. To ease this process, we now allow divorcees to apply for flats earlier, once their Interim Judgment has settled matters concerning the children and matrimonial flat. But some concerns still remain.

For example, Mr Louis Ng spoke about divorcees who are awarded shared care and control of a single child, but are unable to agree on who can list their child in their flat application.
 
We understand that such agreement is not always possible, especially if the divorce was acrimonious. When this happens, HDB will be prepared to consider waiving the mutual agreement requirement, if there is clear evidence that one party has already moved on. 

Another group is unwed parents and several Members also spoke about this including Mr Seah Kian Peng, Mr Arasu Duraisamy and Mr Mohamed Irshad. We do want to ensure that their children have a stable home to grow up in. So we will assist all unwed parents who approach HDB with their housing needs.   

For such cases, HDB will assess their situation holistically, because their circumstances vary. Some Members did raise the point that such a case-by-case approach may cause some anxiety for the applicants because they do not know whether their applications will be successful. Let me clarify the approach that HDB takes. Essentially, there are two broad approaches.

First, for those who are in stable employment and who can afford to buy a flat, then HDB will allow them to buy a flat, not just a new 2-room flat, but also a larger 3-room flat, in a non-mature estate. For those who have insufficient finances and need a place to stay, then we will continue to consider them for public rental if it is in their child’s best interests, taking into account inputs from social workers if necessary. 

Yet another group that we support is our seniors, especially with their retirement savings. They can unlock the value of their flat, if they need to, in several ways – rent out their flat or spare bedrooms; right-size to a smaller flat; or sell part of their lease to HDB under the Lease Buyback Scheme, or LBS.

We recognise that more needs to be done to help Singaporeans understand the different options, especially LBS because it is relatively new, and also because we just recently extended the scheme to 5-room and larger flats – something that Mr Alex Yam, Mr Gan Thiam Poh and Mr Arasu Duraisamy highlighted. And that is why we have been stepping up our public dialogues and engagements. And I am glad to note that LBS take-up has doubled, from 800 households in 2018, to 1,600 last year.

Through these engagements, we also receive feedback and ideas on how our schemes can be improved. One feedback is that the schemes are quite complex, and we can simplify them further. This is particularly the case for the Silver Housing Bonus, or SHB, which comes with several conditions. Having studied the matter, we have decided to simplify and enhance the SHB, in three ways.

First, we will remove the requirement that seniors must sell a larger flat and buy a smaller flat. Regardless of the type of flat they sell, seniors can apply for the SHB as long as they buy a 3-room or smaller flat, and get some proceeds from the move. So effectively, someone staying in a 3-room in a mature estate who wishes to move to a 3-room flat in a non-mature estate and can get some proceeds from that move will still be eligible for a SHB – a lateral move, but because you are moving from a mature estate to a non-mature estate and you unlock some proceeds, you can still be eligible for SHB.

Next, to receive the SHB, seniors must top up some proceeds from their move into their CPF Retirement Account. This is to ensure they have adequate savings for retirement. The top-up required today depends on their net sale proceeds, and we will simplify this, such that seniors only need to top up the first $60,000 of their proceeds.  

Thirdly, we will increase the maximum cash bonus by 50%, from $20,000 to $30,000. So seniors will receive $1 in cash bonus for every $2 topped up to their CPF Retirement Account. So if you have sales proceeds, you top up $60,000, you will get $30,000 in SHB.

In line with the increase in SHB, we will also increase the maximum LBS bonus across all flat types. This means that owners of 3-room or smaller, 4-room, and 5-room or larger flats will get a larger bonus – the maximum cash bonus will be $30,000, $15,000, and $7,500 respectively.

We are also looking at alternative housing options for seniors. Last year, we shared that MND is working with MOH to pilot assisted living, which allows seniors to buy a flat along with care services. And Mr Arasu Duraisamy asked about the status of this project.

Both ministries have held several focus group discussions on the assisted living models. They are generally very well-received by seniors, particularly singles and those whose children have moved out. Seniors were especially attracted to the idea of community living.

So we have incorporated their feedback into the pilot. For example, this new pilot we are rolling out will have large communal spaces on every floor – not just on the void deck but on every floor – where residents can gather and interact. The flats will be 32m2, with senior-friendly features like larger bathrooms, and a layout that can be easily configured for mobility needs.

We will launch the pilot with about 160 units in Bukit Batok in May this year. More details will be shared in the coming weeks, including the sales conditions, indicative flat prices, and payment options.

We also want to make public housing more inclusive especially for persons with disabilities and mobility issues – something that Ms Cheryl Chan highlighted. We have made progress in creating barrier-free access for all our HDB estates. But certainly more can be done. And as Ms Cheryl Chan said, technology may well open up new possibilities. So we thank her for her ideas, and the government will continue to study this issue. 

One area when it comes to barrier-free access is having lift access on every floor. And several members have asked about this – Mr Gan Thiam Poh, Mr Ong Teng Koon, Mr Png Eng Huat. For lift access, there are still about 150 blocks that are not eligible for LUP.

To set things in context, we have managed to provide direct lift access for flats in the vast majority of HDB blocks. We have done so by using innovative technical solutions, and by exercising flexibility for some blocks even when they exceed the cost cap of $30,000 per household. 
 
For some of the remaining 150 blocks, LUP is just not technically feasible – regardless of the cost. For many others, the costs are very high – So it is not just about having flexibility on the cost cap, we are talking about costs of more than $200,000 per household in some cases. As Mr Png Eng Huat said –enough to buy another HDB flat.

So we will continue to explore new technical methods to bring down LUP costs, but it will not be so easy to make progress on this front. But in the meantime, we know that some residents may urgently need direct lift access due to medical or mobility issues. And really, it is more cost-effective to help them move to another flat. Mr Png Eng Huat asked for SERS – I do not think we need to SERS the entire block, but what we will do is to offer a new Lift access Housing Grant of up to $30,000, to help those with medical or mobility issues buy a new or resale HDB flat with direct lift access. So if anyone is in need and they need direct lift access and they do not want to wait, then the grant is available for them to move to a new place which will have direct lift access.

Rejuvenating Our Towns

A third priority for us is to continue to rejuvenate our HDB towns, and keep them vibrant for generations to come. And we have many upgrading programmes.

Let me start at the block-level. Town Councils are generally responsible for regular and cyclical maintenance of common property, including building façades. And the government supports the Town Councils for such work, so that the costs are not just borne by the Town Councils from their collections of Service and Conservancy Charges.

For example, MND has provided additional grants to help Town Councils with their operating needs and long-term capital expenditure requirements, including for lift maintenance and lift replacement.
 
On the issue of façade repairs that Mr Pritam Singh asked about, HDB will bear half of the costs. But if the damages are clearly due to design or construction issues, HDB will cover 100% of the costs. And on this specific case that Mr Pritam Singh asked about, we will get back to him quite soon, based on the BE’s assessment of what the damages were due to.

Beyond the work of the TCs, there is government upgrading through the Home Improvement Programme, or HIP.

We have finished selecting all flats built up to 1986 for the HIP. Now we are ready to move on to the flats built between 1987 and 1997. There are 230,000 of such flats. This year, we will start with almost one quarter of them, or 55,000 flats. We are starting with a bigger number to also help support the construction industry in this period.
 
Town Councils have submitted their nominations, and we will inform the TCs of the selected projects later this week, and then work can get started as soon as we can.  We are prioritising the selection by age, so that older flats will go first, and most flats should be able to get the upgrading when they are about 30 years old.

It will take around ten years to finish the HIP for this series of blocks built between 1987 and 1997. At around that time, our oldest HDB blocks will be about 60 years old, and if our budget permits then, as we have said, we will initiate the second round of HIP or HIP II for these older flats. So we will, almost every year, be continuing with upgrading works.

Besides block-level programmes, at the precinct-level, we refresh older precincts with new amenities through the ongoing Neighbourhood Renewal Programme, or NRP. And we will be selecting 20 NRP projects for implementation this year. In the past, we have done about 14 and again, we have raised this to 20 projects partly to support the construction sector.

If there are new in-fill developments within an old precinct, then HDB as the developer will also provide for facilities to link up the old and new precincts, which is something that Mr Png Eng Huat had asked for. He expressed some disappointment with HDB design. I should say that HDB blocks are designed by a range of architects – not all by HDB, many are designed by private sector architects. The architects take great pride in their work. We will let them know how Mr Png Eng Huat feel about their void decks which are maze-like and confusing. But I am sure they will want to get feedback and continue to work on these designs to do better.

Finally, at the town-level, we renew existing towns through the Remaking Our Heartland programme, or ROH. We have selected nine towns and estates for ROH so far. This year, we will select another four towns for ROH. They are Bukit Merah, Queenstown, Choa Chu Kang and Ang Mo Kio.

The remaking works that can be explored include refreshing of the town and neighbourhood centres, enhancing of greenery and community spaces in parks or even areas under viaducts.
 
We will do all of these refreshing and rejuvenating while strengthening the distinctive heritage and identity of our individual housing estates – something which Mr Teo Ser Luck and many others have highlighted. We will want to preserve and even strengthen that distinctive heritage and identity even as we put in new features and rejuvenate these towns. We will also engage and work with residents closely in this endeavour so that we can remake our heartlands together.

HIP, NRP and ROH are our key upgrading programmes, which we will continue to press forward with. At some point, as our flats and estates get older, we will need to more systematically redevelop and renew these older estates. That’s why we’ve said that we will be introducing a new programme called the Voluntary Early Redevelopment Scheme, or VERS. We expect to roll out the first VERS project sometime after 2030. This is a major programme and we will need to work through the details and we will take some time to do so. We will share that with Singaporeans when we are ready.

In the meantime, we will make our towns greener and more sustainable. Several Members asked about our plans for this.
 
Tengah, our newest and greenest HDB town, offers a glimpse of what we can do, and what we aim to do. Tengah will be equipped with the latest sustainable features, including a centralised cooling system; it will have dedicated walking and cycling paths, and lots of community green spaces. 

So as we push the boundaries in our new towns, we will do likewise in our older towns. And that’s why we will be launching the new HDB Green Towns programme. It’s a 10-year plan to make existing HDB towns more environmentally sustainable and more liveable. 

Let me highlight some of the key initiatives under this programme.  First, we will work with Town Councils to introduce smart LED lighting in all our HDB estates. Using sensors, the system dims to provide just enough ambient lighting when common areas are unoccupied, and then brightens again before residents enter an area. Its motion sensors, but this is enhanced motion sensors, much better than what you have seen so far. It uses up to 60% less energy than normal LED lighting.

We will also harness more renewable power to power common services in HDB estates. We are already installing solar panels on the rooftops of close to 50% of HDB blocks. You don’t see that very often because very few people see HDB blocks from the sky, but half of our HDB blocks today will have HDB panels on the rooftops. We will increase this to 70% by 2030. We will also deploy more efficient solar panels, and aim to more than double the total solar power capacity on HDB rooftops, from 220 megawatt-peak (MWp) today to 540 MWp by 2030. This will provide clean energy for our common services in our HDB estates, and in turn benefit our residents.
 
Second, we will recycle rain water and mitigate flood risks. To do that, we will pilot a new underground water detention system. Rainwater collected can be used for non-potable purposes like washing of the void decks and watering of plants.

Third, to help cool our HDB estates, we will deploy a new type of paint, called “cool paint” that can reduce the heat absorbed by buildings. Our preliminary studies suggest that such “cool paint” may be able to reduce ambient temperatures in HDB estates by up to 2 degrees. We will test this across several neighbourhoods to confirm its effectiveness, before rolling it out across all estates.

Finally, we will work with Town Councils and the community to convert the top decks of suitable multi-storey carparks into urban farms, community gardens and rooftop greenery. This increases green cover and provides more green spaces for residents to enjoy.

With the Green Towns programme, we aim to reduce energy consumption in HDB towns by 15% from today’s levels. This is a major effort, and the government, Town Councils and our residents will all need to do our part. Only then can we build greener and more sustainable HDB towns for our next generation.

Building Our Future City

Our efforts to green Singapore do not stop with our HDB towns. We will also push ahead with our efforts to build our future city.
 
One of Singapore’s defining features is our lush greenery. We will be doubling down on our greening strategy, as 2M Desmond Lee has elaborated just now.

Our green strategy also covers our urban infrastructure and buildings. We have made good progress in greening our buildings, and we will continue to accelerate this effort, as MOS Zaqy Mohamad explained. 
 
Transport infrastructure is also key. We have set bold targets to move towards cleaner vehicles, including electric vehicles. And on our part, MND will expand the necessary charging infrastructure. We will work with private companies to introduce more charging points at selected public car parks, taking into account the geographical spread of EV chargers, car park usage, space availability for electrical upgrades, and estate upgrading plans. Mr Ong Teng Koon asked for some details on this, but we are still working through the detailed plans and we will share more in the coming months.
 
There are many other exciting areas where technology can make a difference in our urban transformation and improve our quality of life. That’s why we are committing close to $1 billion in Urban Solutions and Sustainability research, to build a more liveable, sustainable and resilient city.

We will also continue with our longer-term plans to rebuild and re-make our city for the future. Over the next 10 to 15 years, we will continue developing new growth centres outside the city centre, to enhance Singapore’s economic infrastructure. We have plans in the East, in the West, in the North. East around the Changi region; in the West, around Jurong Innovation District and Jurong Lake District; and in the North, with the Punggol Digital District as well as Sungei Kadut.

In the longer-term, beyond the next 10 to 15 years, we have major sites for redevelopment, as Members would be aware, including the Paya Lebar Airbase when the military airbase moves out, and the Greater Southern Waterfront. These are ambitious, major long-term plans, which will take several decades to realise. So it’s an opportunity for all of us to start imagining what future Singapore can be, and to work towards realising it.

Of course, we all recognise that the best-laid plans of Man do not always come to pass. The future is not preordained. There will be unexpected challenges along the way.

At the start of this year, no one could have predicted that we would be dealing with a virus outbreak today, and that this virus outbreak will be potentially escalating into a global problem. It reminds me of what our founding Prime Minister, Mr Lee Kuan Yew, used to say. He said this twice, on two occasions during his birthday dinners. He said and I quote, “Only a people who are willing to face up to their problems and be prepared to work with their leaders to overcome unexpected hardships, with courage and resolution, deserve to thrive and prosper.” And that’s why the theme of the Budget this year is Unity. With a united purpose, we can overcome our current challenges. We can continue to plan for tomorrow, and we can continue to work together to build a better city and home. Thank you.