Variety needed in HDB income-ceiling rule

April 24, 2008

Variety needed in HDB income-ceiling rule

MR SONG Yee Soon proposed that the household income ceiling be raised to more than $8,000 for high-end Housing Board flat buyers ('Raise income ceiling on HDB flats over $500k', April 16).

Over the years, the HDB has responded well to increasing diversity in housing needs. The Design, Build and Sell Scheme (DBSS) is one example. A DBSS flat may cost five times or more than a common HDB two-room flat. It shows how diverse HDB flat buyers are now.

But should the buyer of a $700,000 flat be subject to the same income ceiling as the buyer of a flat that costs one-sixth the price?

Also, many couples who marry at over 35 may not qualify for public flats. Older second-time buyers may also find this ceiling restrictive.

Couples who have worked overseas, and have missed the chance to apply for an HDB flat earlier, may face the same hurdle. Is there a better way to entice them home?

Should we be more empathetic to these fellow citizens, who are caught out by the income ceiling rule, and allow them to share the fruits of our nation's labour?

The income-ceiling rule is an elimination system, not an evaluation system. In an evaluation system, multiple factors and situations are assessed to derive a more balanced verdict.

Conversely, a complicated evaluation system with too many factors may be cumbersome and confusing to the public.

To keep it simple, retain the income-ceiling rule but refine it by incorporating additional factors.

For example, develop an age-specific income-ceiling scale, where older applicants can enjoy a higher ceiling. Raise the ceiling by $1,000 for those aged 35 and above, for instance.

We could also add a third factor - type of flat applied for. High-end flats could have a separate scale. Also, determine if three-room and smaller flats should have a separate ceiling.

These changes may increase the number of eligible buyers. Examine if additional housing funds are justified or changes should be made to the existing subsidy structure so the lower-income group are not disadvantaged as a result.

The challenge is how to achieve the optimal balance where social benefits of the public housing scheme are maximised within resource constraints.

Ng Ya Ken



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