Cap on subletting of flats to foreigners soon

By Janice Heng And Rachel Au-yong, The Straits Times, 7 Dec 2013

UP TO 18 per cent of units in some Housing Board blocks are now wholly sublet to foreigners, even as the authorities are deciding on the cap to put on this figure.

This is to keep foreign enclaves from forming, National Development Minister Khaw Boon Wan said in a blog post yesterday.

"We will soon decide on an appropriate cap," he said. HDB said the board and the Ministry of National Development (MND) are aiming to finalise details soon.

The aim is to spread foreigners more evenly across the country. Now, over 35,000 units are entirely sublet to foreigners, excluding Malaysians - accounting for less than 4 per cent of all public flats.

But concentrations in certain areas drove the proportion up to 9 per cent in those neighbourhoods, "or even 18 per cent in some blocks", noted Mr Khaw.

Figures for subletting of entire flats came after HDB did an analysis of the subletting situation.

The cap will apply only to the subletting of whole flats, not to subletting of rooms, HDB said in response to queries yesterday.

Malaysians will be exempt "in view of their close cultural and historical similarities with Singaporeans", it added.

No figures were given for how many foreigners rent rooms, but in a July parliamentary reply, Mr Khaw said foreign workers renting flats or rooms form about 5 per cent of the total population in HDB flats.

The idea of a cap on units was first raised in this year's Budget debate by West Coast GRC MP Foo Mee Har.

Noting that "lifestyle differences" have caused tension between foreigners and Singaporean neighbours, she suggested a 10 per cent limit on units in each block that can be rented out to foreigners.

Mr Khaw replied then that MND would "do some analysis to see if 10 per cent is the appropriate cap", but added: "I find that figure a little low."

MP Lee Bee Wah, who heads the Government Parliamentary Committee for National Development, does not think there is "a magic number" for the cap.

"But certainly, we should not, for example, have 30 per cent of residents who are foreigners."

Yesterday, Mr Khaw agreed with Ms Foo "that we need to maintain the Singaporean character of our heartland".

But MND will keep in mind the impact on those who rely on subletting for additional income, especially the elderly, he said.

The coming move could send rents south if owners are forced to "attract other tenants like permanent residents (PRs) or locals", said property agent Jack Tam.

ERA Realty key executive officer Eugene Lim expects a cap of 8 per cent to 10 per cent, given the 8 per cent cap on PR owners now.

Non-Malaysian PR households cannot own more than that proportion of units per block, or 5 per cent of units per neighbourhood.

As for areas that might be affected, property agents named Jurong, with tenants from China, and those near Changi Business Park such as Simei and Tampines, with tenants from India. Such tenants also stay in Woodlands, Choa Chu Kang and Bukit Batok.

One foreigner who is worried is IT firm research manager Sandeep Singh, 31, from New Delhi.

Renting a three-room flat in Queenstown with his wife and son has given him a chance to meet many friends. "I am very close to my Chinese neighbours."

He fears new rules could create a "distance divide". "If foreigners are increasingly pushed to stay in private estates, we will never get the chance to live in the real Singapore," he said.

Related
Preventing Foreigner Enclaves
HDB sets quotas for renting out flats to foreigners and PRs
Market largely unaffected by subletting caps