The Prime Location Public Housing (PLH) Model
Keeping public housing in prime locations affordable, accessible and inclusive for Singaporeans
The Ministry of National Development (MND) and the Housing & Development Board (HDB) have announced details of the Prime Location Public Housing (PLH) model today. This new model ensures that new public housing built in prime, central locations like the city centre and the Greater Southern Waterfront will remain affordable, accessible and inclusive for Singaporeans. The PLH model was developed after extensive engagements with the public, experts and industry stakeholders. The first project under the PLH model will be launched at Rochor during the Nov 2021 BTO sales exercise.
2 About 4 in 5 Singaporeans live in HDB flats, of which about 90% own their homes. At the core of Singapore’s public housing programme are the values of affordability, accessibility and inclusivity. It is imperative for public housing in prime locations to be underpinned by the same values. However, left solely to market forces, it is likely that only the better-off would be able to afford housing in prime locations, given their attractive locations and attributes. Hence, it is necessary to develop a new model to ensure that public housing in prime central locations continue to reflect the diversity of our society.
3 In the development of the new model, extensive public engagement was carried out to gather feedback and suggestions from diverse groups of Singaporeans. For over 10 months between Nov 2020 and Sep 2021, more than 7,500 Singaporeans, including first-time homebuyers, existing homeowners, industry experts and academics, have shared their views on the new model.
4 These ideas and suggestions have enriched the policy-thinking and formulation of the new model. Spanning a broad spectrum of views and perspectives, Singaporeans recognised that each measure has its merits and trade-offs, and a balanced approach would be needed. A majority of Singaporeans said that it would be fair for the Government to introduce new policy conditions. These conditions could include recovering the additional subsidies given at first sale when reselling the flat; disallowing rental of the whole flat; setting eligibility criteria for subsequent resale flat buyers; selling flats on shorter leases; allowing flats to be sold back to the Government only; extending the minimum occupation period (MOP) beyond the current 5 years, and relooking the priority schemes for flat allocation.
5 Taking into careful consideration the diverse feedback received, MND and HDB have designed the new housing model to keep public housing in prime locations affordable, accessible, and inclusive for Singaporeans, both at the initial purchase and at subsequent purchase on the open market.
6 As new flats in prime locations would naturally command higher market values, new PLH flats will be priced with additional subsidies, on top of the substantial subsidies already provided for BTO flats today. This will keep flat prices affordable for a wide range of Singaporeans.
7 For parity with other BTO flat owners who are not accorded these additional subsidies, flat owners of PLH flats will pay a percentage of the resale price of the flat to HDB, as a means to recover the additional subsidies, upon the sale of their homes. The subsidy recovery percentage will be commensurate with the extent of the initial additional subsidy provided. More details will be announced in the Nov 2021 BTO sales exercise.
8 The eligibility conditions to buy such flats from HDB will be the same as the prevailing eligibility conditions for the purchase of BTO flats (see Table 1). However, the priority quotas for flat allocation under the Married Child Priority Scheme (MCPS) will be reviewed and adjusted depending on location for sites launched under the PLH model. This allows public housing in prime central locations to be more inclusive, providing more opportunities to Singaporeans whose family members do not live near the area to also live in these neighbourhoods.
9 Beyond the initial purchase, there is a need to ensure that PLH flats remain inclusive and accessible to a broad group of subsequent flat buyers over time. Hence, the resale of these flats will be ringfenced for buyers who meet the prevailing eligibility conditions for the purchase of flats directly from HDB (see Table 1 for the key differences).
Table 1: Key Eligibility Conditions for Purchase (Three-room and Larger Flats)
Note: * With or without CPF housing grants.
^ Or $21,000 if purchasing with extended/multi-generation family.
10 Without the eligibility conditions, the resale prices of these prime location flats may rise beyond the reach of many Singaporeans; and over time only the better-off can afford to buy them. MND and HDB therefore intend to require resale of PLH only to buyers who can meet prevailing eligibility conditions for BTO flats to around half of the 99-year lease before considering a review. For buyers who do not meet eligibility conditions, they can still consider the wide range of resale flats or other private residential properties in the market, to meet their housing needs.
11 Many Singaporeans believe that public housing should primarily be for families with genuine housing needs, and that more should be done to deter speculative demand. Given the prime locations and additional subsidies provided for PLH flats, there is a need to safeguard them for Singaporeans with genuine housing needs and strengthen the owner-occupation intent. Hence, PLH flat owners will need to occupy their flats for at least 10 years (i.e. the MOP) before they can sell their flats in the open market or invest in a private residential property.
12 Additionally, while they may rent out their spare bedrooms, renting out the whole flat will not be allowed, even after the MOP. These conditions, summarised in Table 2, will apply to all flat owners who purchase PLH flats from HDB and in the open market.
Table 2: Ownership conditions for BTO model versus PLH model
Note: * MOP is 5 years.
^ MOP is 10 years.
13 The PLH model will be implemented for selected public housing projects in prime and central locations, such as the city centre and surrounding areas, including the Greater Southern Waterfront. The PLH model will not be retroactively applied to existing flat owners.
14 Public rental flats will also be built at these sites, where feasible, for lower income households. This will ensure that public housing is kept inclusive and diverse across Singapore and HDB towns continue to be home to residents from all walks of life.
15 The first project to be launched under the PLH model will be at Rochor, in the Central Area. Located along Kelantan Road and Weld Road, 960 units of 3-room and 4-room flats will be offered for sale at the upcoming Nov 2021 BTO sales exercise (See Annex for location map). The pilot project will also include 40 units of 2-room rental flats. More details will be announced at the launch in November.
16 The PLH model has been designed by MND and HDB after taking into account the public feedback and studying all possibilities carefully. As with any new policy, we will continue to review the parameters over time and make adjustments where necessary to ensure they remain relevant to the needs of Singaporeans. For any enquiries, the public can visit the HDB InfoWEB at www.hdb.gov.sg.