FOSG Public Housing Policy Proposal: Question on Population and CPF interest

Future of Singapore, a nonpartisan Internet research & discussion forum presented a policy paper on its recommended amendments to the public housing to cope with the looming crisis facing the existing housing system.

The group identifies two major problems facing public housing today:

First, HDB flat owners have no security of tenure beyond 99 years, and the capital values of their flats will sharply diminish towards the end of the 99-year lease. As a result, their life savings will depreciate significantly as they age.

As things currently stand, the value of HDB owners’ flats will become zero at the end of their 99-year lease, unless they are fortunate enough to qualify for Selective En bloc Redevelopment Scheme (SERS) midway. However, for the bottom 50% of income earners, the bulk of their net worth, or life savings, is in the value of their HDB flat. For most of them, when their flats go beyond the 40-50 year mark, the value of HDB flats tends to decline rapidly, just when the owners need to capitalise on their flats’ values to fund their retirement the most. Neither the proposed Voluntary Early Redevelopment Scheme (VERS), nor the current the Short-lease Flexi-Flats and the Lease Buyback Scheme (LBS) adequately address this problem.

Secondly, the current cost of HDB flats for first time buyers of BTO flats relative to their incomes is very high, with the result that it typically takes about 25 years for home buyers to pay off their housing loans. This effectively means that for the greater part of their working lives, many Singaporeans are channelling a significant part of their disposable incomes to paying off their HDB flats (while foregoing the interests paid by the CPF Board), leaving insufficient savings for retirement, medical expenses and education upgrading. The problem is exacerbated for the lower, irregular or uncertain incomes that makes home ownership difficult.The paper proposes four major reforms to public housing that will address these problems and greatly improve the wellbeing of allSingapore citizens.
1. Extension of lease to 99 years once flats reach 50 years.2. Replacement of aged flats when they reach 100 years.3. New pricing policy of new flats to be sold at construction cost.4. Subsidised rental flats to be offered to those who cannot afford home ownership with reasonable security o lease tenure.

https://www.futureofsingapore.org/single-post/2019/11/30/ADDRESSING-SINGAPORE%E2%80%99S-KEY-PUBLIC-HOUSING-PROBLEMS-Asset-Protection-Affordability-and-Access