Rental eligibility now a game of cunning

Aug 26, 2008
Rental eligibility now a game of cunning

THE Housing Board has found itself in a quandary over sharply rising
demand for the small stock of rental flats available. The twin
trends - high rents for conventional HDB apartments and more people
conserving assets for fear of prolonged economic uncertainty - that
had been building for a year now are not easing. The HDB can expect
the tight rental situation to persist, or worsen. Ineligible renters
playing the system have added to the long application queues, but the
HDB can be counted upon to weed them out at first sieve. To satisfy
medium-term demand, raising the current stock of some 43,000 rental
flats is an inevitable response.

This the HDB is doing. But the gestation period of about three years
for the additional 7,000 to 8,000 units that will be built gives
little comfort to those applicants who need shelter now, not three
years later. There are an estimated 4,400 of these. These are
families with household income of about $1,500 and no assets.
Divorcees with young children are common among them. The HDB could
consider releasing unsold smaller units from its normal stock for
fixed-term leases to relieve pressure.

This is socially more enlightened than keeping the flats, usually in
less favoured locations, for choosy purchasers to make up their minds
about bidding. Beyond this, means testing which the HDB is
considering is the fairest way of sorting out the scale of need.

Abuse of the low-rent dispensation was not a problem when granny
flats were being built for retirees and rents for normal HDB flats
were about half the current rates. But since the spike of a year ago,
rent seekers have resorted to the deplorable practice of sub-letting
rooms or whole flats, sometimes to ineligible foreigners. Families of
some means, plainly not eligible, have joined the queue, attracted by
rents of as low as $26 a month. They should be forced onto the open
rental market by fail-safe administrative measures.

To disqualify applicants who own assets and whose household income
exceeds the cut-off mark is easy. Trickier is checking the assets of
their children and siblings, which the HDB is considering. The
thinking is that immediate families should take them in. In practice,
this may not always be practical owing to relationship frictions and
family feuds. But it does not weaken the case for wholesale means
testing.

It remains a logical way to ascertain need but the line should be
drawn at checking the assets of applicants' brothers and sisters. If
these siblings are married, with their own grown children and
consequent obligations, they are effectively separate families.