20130428 HDB – many things very wrong somewhere, not just ECs

It is quite surprising that Minister Khaw had not realised that all is not right with the EC scheme. (“Khaw hints at changes in EC scheme”, CNA 26 Apr)

http://www.channelnewsasia.com/news/singapore/khaw-hints-at-changes-in-ec-scheme/654024.html

In fact, there are many things that are very wrong not just with the EC scheme but the HDB as well, the most obvious being a politicised statutory board.

More statements by ministers are starting to border on the ridiculous with the latest by Minister Khaw:

– “…government loses “hundreds of millions” of dollars when constructing public flats

Isn’t it akin to saying that the government has lost billions constructing schools, roads, hospitals etc when in fact nothing has been lost by the government because these have been funded by taxpayers?
The government cannot define every infrastructure expense into a loss. Singaporeans are also not getting their HDB flats FOC but pay slightly under market rate. As the largest housing developer in the world, the economies of scale must be substantial for the government. The price paid by HDB buyers are definitely much more than construction costs, which is probably the reason why the government has repeatedly refuse to come clean on this issue. What about the $2,674,000,000 collected from developers for ECs and HDB flats since 7 Aug last year, also a loss??
http://www.hdb.gov.sg/fi10/fi10330p.nsf/w/LandDevMangFinalResult

Being ranked the highest in the world in math, Singaporeans really know how to add.

– “Every year, hundreds of millions of dollars of losses were incurred by the HDB and that’s why MOF (Ministry of Finance) has to give the HDB an annual grant, otherwise the HDB will be in the red. It cannot be forever in the red, because there’s no way it can make money.”

Primary and secondary school students pay between $5 to $15 dollars per month. This amount can hardly cover the utilities bill of a school, not to mention wages of teachers, principals and other staff. Similar to public housing, schools are also constantly upgraded, sometimes costing tens of millions. I hope the government is not going to tell Singaporeans that the MOE incurs billions of losses because if this is the approach, the government will be very busy stating all the LOSSES of every statutory board and all government agencies.

The responsibility of the government is to take care of its citizens but housing needs have clearly not been met. When applications for new estates in the most far flung corner of our island has been oversubscribed, it does not indicate the estate is popular because the people really have no choice. How to apply for a Tampines flat in order to live near parents (planning for junior) when new flats are only constructed in Punggol/Woodlands etc?

The HDB has been politicised because housing issues can be used to sway the electorate even though dangling million-dollar upgrading carrots have a possibility of disappearing into a magician’s hat.
The PAP has been reluctant to cede control of public housing for political reasons and has been distracted from its original role of providing affordable housing, especially to lower income citizens.

The HDB was still on cloud nine even when the average maximum price of recent EC launches reached a stratospheric $1.6 million, with a maximum insane price of as $2.05 million. Why was the HDB providing grants to a large group of people who should be buying from the private sector? Anyone responsible at the HDB for ‘overlooking’?
http://www.executivecondos.net/

A single million dollar public housing unit could buy at least 2 to 3 bungalows across the causeway, more in countries further up north.

ECs are a strange hybrid – sold by the government but comes with a 10-year control clause before becoming privatised. Besides condominiums, other variations of housing have not been allowed eg no frills private apartments.

No one is really insisting that land cost should be excluded but it is outrageous to price land at the highest bid by developers and pass this cost on to Singaporeans. Comparing apples to apples, a discount from private property prices still tags our public housing on the high side of unaffordability. Besides the absence of facilities, an inferior quality of finishing, uncertainty of getting a car park lot and a markedly lower standard of estate management, a HDB flat also comes without strata title and is prone to visits by artistic unlicensed money lenders. Public housing is really not as cheap as the government makes it out to be.

Minister Khaw has not really addressed the issue of high costs of our public housing. New buyers appear to be the only ‘beneficiaries’ as flats will be priced about 30 per cent below current prices. Nothing is really for free in Singapore as the HDB will probably lop 30 per cent off the lease.

Fortunately the LTA has no intention of making car ownership more ‘affordable’ with 2 year COEs.

What ails our public housing, not just ECs, is the lack of focus of the HDB due to its sheer numbers. Since one size doesn’t fit all owners of the 900,000 HDB units, the HDB expands too much energy in perpetually tweaking the system. In pleasing one group of applicants, if antagonises another.

Controlling 80 per cent of all residential units also means the frequent involvement of MPs on a host of housing issues. Next, the CPF Board comes into the picture, micro managing housing top-up grants, additional housing grants, special housing grant, grant for singles, singles living with parents etc. The HDB has its alphabet soup of schemes and programmes which includes LUP, MUP as well as an MCP scheme.

As a statutory board, the HDB does not have sufficient resources to continuously tweak and micromanage an already unstable system. The government should not assume the role of the private sector, attempting to provide even luxurious housing for almost all Singaporeans. The role of the HDB is only to provide affordable housing to those in need.

Controlling almost a million housing units presents an administrative nightmare. Public housing issues are not only confined to ECs.

Phillip Ang

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