Why was HDB leasing vacated SERS flats in Toa Payoh to private operators for profit when these could have been used to meet the rental requirements of needy families?

    21 Nov 2012 |

Recently, an article was posted on an online platform, asking why HDB had let out three of the four housing blocks in Toa Payoh vacated under the Selective En Bloc Redevelopment Scheme (SERS) to private operators, when they could have been set aside for needy Singaporeans. The writer also alleged that profits were made from these arrangements, and was told that a total of 30,000 public housing flats have been outsourced to private operators.

These are baseless assertions. The figure of 30,000 is equivalent to the total number of HDB flats in an entire public housing estate such as Queenstown or Pasir Ris, and is immensely overblown, as there are not that many vacated blocks to be let out in the first place. Pending the finalisation of redevelopment plans and prior to demolition, some vacated SERS blocks are put to interim use to meet the demand for short-term rental housing. Because they are due to be torn down, these blocks are not suitable for long-term rental. Instead, HDB is increasing the number of purpose-built rental blocks to meet the demand for such accommodation.

Currently, a limited number of about 1,600 vacated SERS flats have been leased to private operators to manage. A portion of these flats are allocated to needy Singaporean families at subsidised rates under the Interim Rental Housing (IRH) scheme.

This is the case for the blocks at Lor 6 Toa Payoh. They have been leased to an operator, with one block set aside to assist needy households who need short-term housing under the IRH scheme. The other blocks are used for rental at market rates and tenants must conform to the approved categories of occupiers. HDB takes no profit from such interim use. The leasing contracts for the Toa Payoh blocks end in December 2012. The blocks will be demolished thereafter to facilitate future redevelopment.

Since the start of 2012, HDB has also removed the market rental component and set aside all the flats from new interim sites for needy households. Private operators are appointed to only manage the flats on HDB’s behalf and they no longer lease the flats from HDB.

In 1995, the Selective En bloc Redevelopment Scheme (SERS) was introduced as part of the Government’s estate renewal strategy for certain older public housing estates. Under SERS, selected old, sold flats are acquired under the Land Acquisition Act for redevelopment. Residents involved are given an opportunity to move from their old flats to new flats nearby with fresh 99 year leases, plus modern facilities.

These new developments in older estates not only help to physically rejuvenate the old estates, they also revitalise the demographics and economic profiles of the residents as younger residents move in. Overall, SERS has given older estates a new lease of life.

Under SERS, flat owners will receive market compensation for their current flats. They will also be assured of an allocation of a new replacement flat, which will be sold to them at HDB’s subsidised selling price, fixed at the time of the SERS announcement.