Thursday, January 28, 2010

'No' to more rental housing

BUILDING more flats for rent could ease the burden on younger Singaporeans starting out in life - just as it could help others invest their resources in developing their businesses.

The idea of increasing the Housing Board's pool of rental flats to help those Singaporeans concerned about affordable housing, was put to Minister Mentor Lee Kuan Yew at a conference yesterday.

But he was quick to disagree, arguing that it was tantamount to putting the HDB in a position of subsidising rents indefinitely. It would also create a 'dependency group' - those constantly dependent on the Government and on subsidies.

The right policy is to, instead, subsidise the price of the flat for the buyer, who then has an asset that will appreciate in value as the economy grows.

I'll improve the surroundings, I'll improve the lifts, the conditions, I'll give you more space. But it is yours and you look after it. And we do not have rundown public housing like other countries which are rental (units),' he said.

The idea was put forward by Professor Deng Yongheng, director of the National University of Singapore's Institute of Real Estate Studies. He said that having more rental flats would help low-income earners, and also allow others to put their money into meeting 'entrepreneurship and other demands'.

Mr Lee said that for those needing resources for their businesses, there was 'nothing to stop you from taking your house, your flat, you go to the bank and say... I've got so much more to pay, this is my income, I need this capital to start a business'.

The HDB clarified later to the media, however, that an HDB flat cannot be used as collateral for a bank loan.

In his response at the dialogue, Mr Lee also said that young Singaporeans wanting to invest in business and not be burdened with financing a flat, could rent from the private sector:

'If you believe you can be a great entrepreneur, then rent a flat from somebody. All the HDB flats are now rentable.'

Mr Lee also disagreed with another idea, raised by Ambassador-at-large Tommy Koh, that the HDB could build retirement communities like those found in Australia and the United States.

Mr Lee said he had read an article by a US doctor, who had assets but who stopped his practice and went into such a home.

'This retirement home was like a hotel and there were other doctors with whom he could discuss things at an intellectual level... He is in that profession, so he has saved enough to pay for the facilities as if it were a hotel,' Mr Lee said.

'You want American standards of living, be an American doctor. Singapore cannot give you that. We haven't got that kind of economy, nor that kind of land. Not even the developer can afford to go and retire in that kind of situation.

Source, Straits Times 28 January 2010

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