Housing and Development (Amendment) Bill

Order for Second Reading read.

4.28 pm

The Senior Minister of State for National Development (Ms Sim Ann) (for the Minister for National Development): Mdm Deputy Speaker, on the behalf of the Minister for National Development, I beg to move "That the Bill be now read a Second time."

Madam, this Bill seeks to amend the Housing and Development Act in three areas. First, it will extend existing polling provisions for HDB's upgrading programmes to also cover upgrading works at HDB commercial sites carried out under the Revitalisation of Shops Scheme, or in short, the ROS Scheme. Second, it removes the requirement for the date of lodgement or date of recission to be stated in HDB's notice served under Section 59(2) to 59(4). In place of this, provisions have been introduced to prevent the Board from lodging the instrument of vesting or rescinding the agreement for a lease until after the expiry of the period during which the purchaser, personal representatives or any interested persons may appeal to the Minister.

Lastly, it facilitates HDB's operationalisation of its service of notices via additional options, such as email.

HDB shops play important social and economic roles in our neighbourhoods. They provide affordable and convenient essential goods and services to residents. They also form the social glue within a community. HDB shops and shopkeepers that have been serving their communities for a long time contribute not only to local employment, but also add to the heritage and character of our heartlands.

HDB recently partnered with EnterpriseSG to undertake the Heartlands Shops Study, to examine the social and economic value of HDB shops for various stakeholders such as residents, business owners, workers and merchants' associations. Over 2,800 stakeholders were engaged. The key findings of the study are:

First, residents hope that we can improve trade mix in HDB shops to keep up with the changing needs of the local community and make the range of goods and services more interesting and diverse. Some also suggested that heartland shops serve as incubators for local entrepreneurs who are just starting out.

Second, residents feel that heartland shops play a special role in fostering a more inclusive community. For instance, HDB shops provide essential products and services at affordable prices and provide convenience to local residents, including older residents who may not be able to travel far.

Third, many respondents say that HDB shops contribute to the character and heritage of their neighbourhoods. Long-serving shopkeepers who know their customers well bring a sense of comfort and constancy to residents.

Given the important role the heartland shops play in our HDB estates, the Government has been reviewing how to support our heartland merchants better.

In the past one to two years, the Heartland Digitalisation and Revitalisation Committee (HDRC), co-chaired by Minister of State Low Yen Ling and myself, supported heartland merchants in advancing their digitalisation efforts and growing revenue streams. The HDRC worked with agencies to introduce initiatives such as Heartlands Go Digital to accelerate the adoption of digital solutions and Visual Merchandising to improve heartland shopfront aesthetics to attract customers.

Events were also organised to attract footfall. For example, the three-month long Heartlands Festival 2021, which ran from November 2021 to February 2022, resulted in 20% more footfall in participating precincts, and up to 30% more revenue among some shops. The 2022 edition of the Festival commenced last November. Support packages such as rental waivers for our HDB merchants and Community Development Council (CDC) vouchers were also given out to Singaporean households to use at participating hawkers and heartland merchants.

HDB also supports budding entrepreneurs and Social Enterprises through various schemes. For aspiring entrepreneurs, HDB sets aside retail spaces for allocation to start-ups in our shopping centres such as Oasis Terraces and Northshore Plaza. For Social Enterprises and SMEs with inclusive hiring practices, HDB supports them by direct allocating some commercial spaces to these businesses and provide them with a 20% rental discount.

We want to do even more. To enhance the vibrancy of heartland shop precincts, we need to invest in physical upgrading. This is necessary to rejuvenate the heartland shop precincts and improve the shopping experience for customers, while retaining the character and charm of the shops, especially older ones.

HDB introduced the Revitalisation of Shops (ROS) scheme in 2007 to provide funding for upgrading HDB shops and to improve the vibrancy of commercial areas in HDB heartlands. Under the ROS scheme, HDB co-funds common area improvement works at HDB town or neighbourhood centres. Examples of such works include corridor re-tiling, landscaping, installation of roller shutters and vertical blinds. To ensure a common vision and continuity of the revitalisation effort in the long term, shop owners need to co-pay a certain amount of the works and merchants' associations would currently need to gather 100% support from shop owners in the Town or Neighbour Centre before ROS upgrading works can proceed.

MND and HDB have engaged Merchants' Associations and shop owners, and a majority shared that the current ROS requirement to obtain 100% support from benefiting shop owners is too stringent. They are unable to proceed with upgrading even if there is only a small number of shop owners who oppose the upgrading.

For instance, the Marine Parade Merchants’ Association had managed to gather 77% support from the shop owners to upgrade Marine Terrace Neighbourhood Centre, but ultimately could not benefit from the scheme as a small minority of shop owners are not in favour of the upgrading. Some merchants' associations have shared with us that some shop owners are less interested in upgrading because they rent out the entire shop unit, rather than operate the shop themselves. For these owners, they may be more interested in the steady rental income stream. Unfortunately, if the upgrading does not proceed, the physical environment around the shop cluster may become dull over time, and it may become less attractive to customers. Instead, a refresh of the physical environment will be a win-win – residents can enjoy a better shopping experience, and shop operators may gain more customers over time.

Therefore, MND has reviewed the ROS and is proposing to adjust the scheme to allow upgrading to proceed if 75% of the shop owners vote in favour of the upgrading. This is aligned to HDB’s upgrading programmes for residential flats. For example, the Home Improvement Programme (HIP), can proceed if 75% of residents vote for it. Clauses 4 to 7 of our proposed amendment will extend the same framework to HDB shops.

The majority of the merchants' associations engaged have expressed their support for this move, and based on our experience with residential upgrading, we believe this to be a fair approach that balances the preferences of stakeholders with the need to rejuvenate our heartlands.

Let me elaborate on clauses 4 to 7. Clause 4 amends section 75 of the H&D Act to introduce the definition for “commercial property upgrading works”. The term “commercial property” refers to any property permitted to be used for the purpose of carrying out business, and would include units such as retail shops, childcare centres, commercial schools, offices or sports and recreation centres. This amendment will allow upgrading works aimed at attracting footfall and vibrancy to be carried out within and outside of any commercial property in the HDB commercial precinct.

Clause 5 amends section 77 to allow HDB to conduct a poll of the HDB shop owners for the purpose of shop upgrading works within an HDB commercial precinct and allows for the works to proceed when at least 75% of the votes by shop owners are in favour of the upgrading works.

Clause 6 amends section 78 and empowers HDB, upon a successful poll, to recover a portion of the cost of upgrading works from all shop owners and Town Councils, including the minority who did not support the works.

Clause 7 amends section 85(b) to allow the Minister to set out rules to operationalise the above amendments.

In our consultations, many businesses appealed to reduce the current level of co-payment for upgrading costs by shop owners, currently pegged at 20% and capped at $5,000, to make the ROS Scheme more attractive and benefit a wider community. To support our heartland businesses in their rejuvenation efforts, we are studying further enhancements to the co-payment structure, including lowering the co-payment share of shop owners. We will share more details at the Committee of Supply 2023.

Let me move on to the other administrative amendments.

Today, HDB may serve formal notice to a personal representative or an interested person to vest ownership of a flat back to HDB, if upon death of the owner, his personal representatives fail to take steps to deal with the deceased owner’s interest in the flat in the prescribed period. In such an event, HDB would serve a notice to inform the Estate of the deceased and all persons known to have an interest in the property, of HDB’s intent to vest the property back to HDB. Before repossessing the flat, sections 59(2) to 59(4) require the notice to include the lodgement or rescission date, that is, the date when vesting to HDB will take effect, so that the person is aware of when the flat will revert to HDB. This serves to give him or her sufficient time to submit any appeals. However, in practice, it is not always possible to state the precise date when the vesting to HDB will take effect as this date is dependent on when the instrument of vesting is registered by the Registrar of Titles. The proposed amendment to clause 3(a) therefore seeks to simplify the notice to exclude the requirement for this date.

However, to retain a period of time during which a person to whom notice is served can still appeal against the vesting, clause 3(b) inserts a new subsection (5A) that will prevent HDB from effecting the vesting of the flat until 28 days after serving notice of the Board’s intent to do so. This aligns with the 28-day period which a personal representative or an interested person may appeal to the Minister under section 59(6).

As a similar safeguard to the one in clause 3(b), clause 2 amends section 50 to insert a new subsection (3A) that prevents HDB from repossessing or taking certain steps needed to vest the title or the estate or interest in a flat, house or other living accommodations until 14 days after serving notice of the Board’s intent to do so. This aligns with the 14-day period which a purchaser may appeal to the Minister under section 50(4).

Finally, there is a need for HDB’s service delivery model to be updated to meet expectations of today’s HDB flat owners, and to be more environmentally friendly. Clause 8 repeals and re-enacts section 111 to provide additional option for HDB to serve notices such as via email.

However, these additional options will not be extended to notices or summons with higher gravity. HDB notices or summons pertaining to compulsory acquisition and vesting of title will continue to be served physically.

In conclusion, Mdm Deputy Speaker, this Bill enhances the ROS Scheme by introducing formal polling provisions that I have just described under clauses 4 to 7 and also makes administrative amendments to notice servicing under clauses 2, 3 and 8. Madam, I beg to move.

Question proposed.

Mdm Deputy Speaker: Mr Lim Biow Chuan.

4.41 pm

Mr Lim Biow Chuan (Mountbatten): Mdm Deputy Speaker, I spent my entire younger days living in a HDB estate, firstly at a rental flat at Selegie House and then later, my family moved to Rochor Centre.

As a child, I recall going to the neighbourhood shops to buy stationery for school work or to buy drinks and food from the local coffeeshop. I cut my hair at the local barber and my parents would buy their groceries from the provision shop just downstairs. The shopkeepers would usually know you by name, which block that you stay in and the usual items that you buy. If you forget to bring money to pay, they allow you to pay another day.

I still have vivid memories of all these shops in the HDB neighbourhood. For many residents, the shops like coffeeshops, barbers, clinics, opticians, clothing retail shops, provision shops or now known as mini markets, medical halls, stationery shops and so on, all these form part of their growing up experience in the heartlands.

When my children were young, I recall bringing them to the neighbourhood shops at Ang Mo Kio, to walk around and to buy groceries. Before Price Kaki came about, I had already shopped around and found that you can get the best price for infant formula and diapers from an HDB shop.

In November 2022, HDB released the result of the Heartland Shops Study which reveal that seven out of 10 residents surveyed visit the heartland shops at least once a week and about one-third of their monthly expenditure is spent at heartland shops. Many residents surveyed felt that: first, the heartland shops serve as a social space to facilitate interaction among residents; secondly, these shops provide affordable goods and services; and thirdly, they provide jobs for seniors and others who may prefer to work near their homes.

A large majority of residents also felt that the heartland shops play an important role as part of our culture and heritage of Singapore.

Unfortunately, with the introduction of large shopping malls, many of these heartland shops are at risk of disappearing. They face steep competition with the larger players in the retail industry and today, they also face stiff competition from sales done online.

But these shops do provide a livelihood for many local residents. According to HDB, there are a total of about 15,000 shops spread out across town centres, neighbourhood areas and precinct shop clusters that are either rented out by HDB or owned by private operators. From the Heartlands Shops Study survey results, it is clear that the heartland shops provide an important service to residents living in the area.

When the Revitalisation of Shops (ROS) scheme was introduced in 2007 to support shop owners and merchants' associations in order to improve the vibrancy and competitiveness of HDB shops by co-funding the upgrading of common areas and promotional events, I was fully supportive of the scheme as I felt that it would help rejuvenate the neighbourhood and give a big boost to the business of these shops.

Marine Parade Merchants' Association was selected for the one-year ROS pilot scheme in 2007. I was then the Adviser to Marine Parade and was involved in the various meetings held by HDB, the Town Council, the Merchants’ Association and the grassroots organisations to work out the details of the pilot ROS scheme. There were no issues with the co-funding for the promotional events. These events help generate more footfall to the heartland shops, and this also meant more business for the businesses in the area.

However, for the upgrading of the common area, there was a major obstacle as the merchants' association is required to garner the 100% support from the shop owners. The reality on the ground is that shops in the HDB precinct come in different sizes and different scales of business. The owner of a large shop space who had rented out his space to say, a supermarket; he has no interest in the upgrading of the common area as he already has a steady source of rental income. The owner of a small retail shop, say optician or a clothing shop; he will feel the strain of paying up to $5,000 for the upgrading fee without knowing whether the additional expense would result in increased business for his shop. So, without the support of 100% of the shop owners, then any proposal to upgrade the common area is doomed to failure. Even if one single shop owner refuses to sign off, then all the efforts of the merchants' association would be wasted.

So, Marine Parade Merchants' Association tried to secure the ROS funding on several occasions but did not succeed on any one of them. Thus, Mdm Deputy Speaker, I support the proposed amendment to the Act to allow HDB to carry out polling for the upgrading works or ROS and to allow the works to proceed when at least 75% of the shop owners vote in favour of the works. This is similar to the polling process adopted by HDB for the MUP and HIP for residential estates. The majority of the shop owners should not have the upgrading works held back by a few owners who do not wish to contribute to the common good of all the shop owners and businesses.

I have three queries for the Senior Minister of State.

First, section 76 of the Act allows for the definition of precinct to be determined by the Minister. So, for many HDB heartland centres, the shops located at the fringe of the centre are usually considered part of the precinct. However, if the upgrading of the common areas does not benefit them – for example, if the merchants' association wishes to provide a roof shelter or landscaping for the town centre area to make the place more attractive to shoppers, these shop owners at the fringe are unlikely to support the upgrading works.

So, may I ask the Minister whether the shops located at the fringe of the town centre, can they be excluded from being considered part of the precinct? Because if these shops do not benefit from any of the upgrading works, they would surely not support the upgrading proposal. It will also not be fair to them to ask them to contribute to the cost of the upgrading if they cannot see the benefit in any way.

Next, for the poll of the prescribed owners of commercial property, will HDB distinguish between commercial properties of different sizes? Will a big shop, say for example the size of a supermarket, be given the same voting right as a small shop regardless of the size of the shop unit? So, if a bigger shop has a bigger vote share in a poll, would this affect the interest of the smaller shops?

Finally, may I ask the Senior Minister of State, for the upgrading works to the common area, will the Town Council have any say in the decision? Here I need to declare my interest as the Chairman of Marine Parade Town Council. I say this because some upgrading proposals may carry higher maintenance costs which will eventually be paid from the service and conservancy fees. How does HDB balance the need to upgrade the common area versus the possible higher maintenance costs in the long run?

May I ask that the Minister consider the above concerns when setting out the rules to operationalise the amendments to the Act? I support the Bill.

Mdm Deputy Speaker: Mr Louis Chua.

4.49 pm

Mr Chua Kheng Wee Louis (Sengkang): Mdm Deputy Speaker, home is where the heart is. And at the heart of our public housing estates are our heartland retailers and hawker centres which play an integral role in our lives throughout one’s life stages.

Growing up as a child in Ang Mo Kio and certainly before the age of e-commerce, I still fondly recall how the unassuming neighbourhood centre had almost everything that we needed, with the wet market, hawker centre, coffeeshops, bakeries, minimarts serving our F&B needs; the friendly neighbourhood general practitioner (GP) and dentists looking after our health needs and the retailers selling everything from clothes, hardware, spectacles, laser discs and even Tamiya cars and Pokémon cards that I had a particular interest in in the past.

While shophouses and five-foot ways of yesteryears have given way to HDB town centres and neighbourhood malls, it would be a pity if our heartland shops are not able to overcome the challenges of modern retail and the current difficult business environment. Hence The Workers’ Party had in our manifesto called for a strengthening of our hawker centres and HDB shops, and I am supportive of the Bill’s intent to support our heartland shops through creating a new category of commercial property upgrading works, while providing for such upgrading works to be carried out.

The convenience of e-commerce has changed most of our lives, largely for the better. During the periods of COVID-19 related lockdowns and mandatory quarantine, food delivery and e-commerce have helped us tide through some very difficult times. Based on SingStat data, online sales now represent about 12% to 15% of total retail sales in 2022, up from the mid-single digit percentages during the pre-pandemic periods from 2018 to 2019. For computer and telecommunications equipment, this is as high as 52% in March 2022 and even for supermarkets and hypermarkets which was the domain of brick-and-mortar retail, this is now similarly at 14% of total retail sales. I believe online sales will only continue to rise as a share of the overall retail market.

For our heartland retail shops, significant upgrading and rejuvenation is much needed, and time is of the essence for many shop owners who are struggling with narrowing margins amid competition and input-cost inflation and slowing sales volumes as they continue to lose market share to glitzy shopping malls and e-commerce alike. While the future of retail is likely in omni-channel retailing where both digital and brick-and-mortar retail coexist, it is important for us to urgently revitalise our heartland shops so they do not lose relevance, as they play an important role in adding vibrancy and character to our neighbourhoods. I thus hope the Revitalisation of Shops Scheme and other commercial upgrading initiatives can be rolled out expeditiously across our heartland shops once the Bill is passed.

Moving on to the specifics of the Bill, I welcome the move to reduce the threshold for shop owners to approve upgrading works from 100% to 75% of the total value in votes under clause 5. This would facilitate the upgrading process and not allow any single dissenting shop owner from halting the process indefinitely, while still ensuring that there is supermajority approval for any approved works.

Clause 6 however prescribes that the Board may recover from every owner of such commercial property within the precinct as is mentioned in section 77(3A), the costs incurred by the Board in respect of the commercial property upgrading works.

Any upgrading works will necessarily benefit our heartland shops directly and indirectly, as it is the clear intention of the ROS and related schemes. Even for heartland shop units which are directly owned, common areas are under the ownership of the HDB. It follows logically that any capital expenditure incurred on common areas should be the responsibility of the HDB as well. This is similar to retail malls owned by commercial landlords who may undertake upgrading works and Asset Enhancement Initiatives or AEIs to ensure that the mall is in a good condition and continues to be attractive to shoppers.

I take Senior Minister of State’s point that the Government is studying the possibility of reducing the level of co-payment for upgrading costs by shop owners. However, I do hope the Government can review this issue and consider if there really needs to be a co-payment element at all.

More broadly, I wish to share several points of consideration to better support our heartland shops. The first is the proactive curation of the tenant mix or trade mix. I note changes to the Price Quality Method tenders for HDB shops which will apply to new tenders starting in the first half of 2023, where the weightage for the business concept and affordability criteria will be raised from the current 25% to 30% to 35% to 45%.

The lower emphasis on pricing is a welcome move, given the importance of the affordability of goods and services, and the types of trades offered. Beyond the specifics relating to each tenderers’ design and layout, affordability and productivity, I hope the higher-level curation of trade mix for each area can be conducted on a more proactive basis to ensure the optimal share of each trade category via increasing or reducing the number of similar shops. For example, while F&B is the most relevant to our daily needs, there should be a conscious effort to ensure that less popular trades such as a dental clinic or even a veterinary clinic can be found within each neighbourhood.

Related to the point about the proactive curation of tenant mix is the push for digitalisation. With residents conditioned to the scanning of QR codes because of COVID-19, it is heartening to hear that today 93% of heartland merchants have gone digital in the form of accepting e-payments. To take it one step further, I wonder if additional support can be provided to our heartland shops to adopt digital point-of-sale (POS) systems? This could further enhance our heartland shops’ store productivity and enable them to better manage their finances. Should there be consent provided, sales information on an aggregated basis could also be studied by the HDB to provide for a data-driven approach to curating the appropriate trade mix for any particular precinct.

On the customers front, I recently downloaded the ShopperLink app but frankly did not find it very useful. A search for "bubble tea", for example, Singaporeans' favourite drink did not really throw out any results even though we know that there are many of such shops in the heartlands. Moreover, the coverage only appears to be that of HDB malls rather than the large pool of heartland shops across our town centres and neighbourhood centres. To take it one step further again, perhaps the HDB can consider introducing a rewards programme to encourage continued patronage of our mom-and-pop shops in the neighbourhood, similar to those of retail mall owners in Singapore such as the CapitaStar or Frasers Experience programmes.

Finally, while the attention of this Bill is rightly centred on facilitating the upgrading of our existing heartland shops, let us not forget the precincts and neighbourhoods which do not have the benefit of the convenience and rich diversity of having heartland shops in close proximity to our homes. The town of Sengkang which I represent for example is a case in point.

Many residents have often shared with me and my fellow Sengkang Members about the lack of coffee shops and everyday conveniences in their neighbourhood. Within my Rivervale division for example, while it is great that Rivervale Plaza and Rivervale Mall provide various retail offerings for those living in the immediate vicinity, there is only one coffee shop and one convenience store in the entire division. For the elderly or for those who are less mobile, having a meal or buying groceries can be quite a troublesome affair requiring the use of public or private transport.

If my childhood was spent living in present-day Sengkang for example compared to Ang Mo Kio where I had lived, I would not have been able to say, buy lunch for myself!

I would thus like to urge the HDB to also look at neighbourhoods or precincts such as Sengkang which are currently underserved. The Workers’ Party has called for a revival of convenience and coffee shops where HDB should allocate a portion of void deck space to provide for at least one coffee shop for every two precincts, or perhaps we could also consider repurposing certain parts of our multi-storey car parks (MSCPs) which are underutilised to allow commercial spaces even if not for coffee shops.

And to take it one step further again, HDB could even offer low-rent commercial spaces allocated by ballot to stimulate microbusinesses, social enterprise and entrepreneurship in our heartlands. Coffee shops and convenience shops are community spaces that allow residents to meet their everyday needs and foster ties with their neighbours while also being an integral part of our heartland culture and should be more actively promoted. Notwithstanding my clarifications and suggestions, I support the Bill.

Mdm Deputy Speaker: Miss Cheryl Chan.

4.59 pm

Miss Cheryl Chan Wei Ling (East Coast): Mdm Deputy Speaker, like the hon Member Lim Biow Chuan, many Singaporeans and I would have grown up with the familiar sight of mama shops, clinics, fruit stalls, confectionery, traditional chinese medicine (TCM) halls and many others at the void decks below the HDB blocks where we lived or would find these shops operating in the neighbourhood centres near the market or hawker centre.

Four decades on, many of these sights remain nor have the trades changed very much. The reason I can imagine these shops and trades survived over the years is simply due to the convenience they bring to the residents and there is a genuine demand for the services provided.

The question today is with the proliferation of e-commerce, extensive delivery services available and changing patterns of work and lifestyle needs of the younger generation, will these shops survive after the last generation of stallholders retire? Should there be a refresh of the type of trades that operate around this what I consider "prime" location? And if a change entails, whom should decide what services continue and whether they remain relevant to fulfill the needs of the future. At least to me, there is much comfort in having a local scene with its unique heritage, characteristics and familiar stall owners who know just about everyone in the 'hood by name or family.

In my constituency Fengshan, this is just what we may see happening after the current lease of the commercial shops near the 85 Market and Hawker Centre runs out over the next two to three years. HDB has explained that the treatment of shops' expiring 30-year leases will be returned to HDB to be let out to operators via a tenancy model.

While I hope to see some changes in the tenancy mix to bring more vibrancy and new services like co-working spaces, gyms, learning and fixer spaces for the community, I am cognisant that we must retain some traditional and essential services like the clinics, dialysis centres, provision shops, sewing and alteration services, as they are still much needed by the older population who rely on these familiar services and for others in need of a last minute purchase.

Thus, the curation of service types after the shops' leases expire becomes critically important in shaping the life of a neighbourhood.

There is, however, a challenge when over 25% of the shops in Fengshan are sold as they belong to the early batch, where sale of shops was permitted. This has been the challenge faced when HDB offered to renew the area earlier but the response for support of ROS by the owners was underwhelming. The clear reason given by the shop owners was that they will not invest in face lift or rejuvenation cost, given the short leases. They felt the ability to recover the sunk cost does not make economical sense – and that I can clearly understand.

What ensues thereafter is the constant change of services in the subletted units. At times, there may even be one too many of a single service type, which has low cyclical demand to sustain them in business.

In clause 5 amendment 2 section 77, where a precinct has been declared to carry out the polling connection, with a proposal for the commercial property upgrading works, an approval seeks for at least 75% of the owner consensus before these works can be carried out. While I understand this concept of approval is similar to other schemes, like the Home Improvement Project, the Neighbourhood Renewal Programme, but the probability of flats changing owners are generally higher and new flat owners would mostly renovate post-purchase to upkeep their units.

Thus, I would like to seek clarification from the Senior Minister if State how this amendment can be effected if the sold commercial shops already constitute more than 25% and the likelihood of getting owners onboard to rejuvenate their shops and the neighbourhood is low.

Next, under clause 6(3a), under section 78, it allows HDB to recover the costs incurred, in respect of those commercial property upgrading works. I would like to know how the cost and upgrading work scope will be shared with the owners before any project tender. Will consultation with the shop owners on its design works and the project scope be discussed for better perspective of what to accept?

Lastly, clause 7 section 85(b) specifies that the Minister may make rule prescribing the value in votes of owners of flats for commercial property upgrading works. Can the Minister explain what are some of the principles of these rules, and if I may ask, can HDB also consider to include the lift upgrading for the blocks that were unsuccessful or opted out in the past for those areas that is near the commercial properties?

Mdm Deputy Speaker, I am all for the rejuvenation of our precincts, particularly at the neighbourhood centres. After all, this is a communal area that brings life to an estate and provide the convenience to the residents and over the weekends, some specialty pop-up stalls that makes an exciting walk through the area. If we can retain some heritage of the precinct and concurrently leverage on the understanding of needs versus availability of current and future services, we will be in a better position to transform the precinct beyond just infrastructure investment. Notwithstanding my clarifications, I stand in support of the Bill.

Mdm Deputy Speaker: Mr Henry Kwek. Not here? Mr Louis Ng.

5.04 pm

Mr Louis Ng Kok Kwang (Nee Soon): Madam, this Bill will make it easier to carry out upgrading works on common areas in heartland shops. This will facilitate works to vitalise our heartlands. I have just three points for clarification on the Bill.

My first point is on how HDB will determine if upgrading works on common property fall within the purpose of commercial property upgrading works. This Bill prescribes an admirable purpose for commercial property upgrading works. It says that such works are for "improving or encouraging diversity of local convenience shopping facilities and commercial and community activities."

They must also support the economic and social well-being and employment opportunities for persons within the precinct. However, it may not always be clear that such works, when proposed, achieve such a goal.

That is why for commercial property upgrading works, the Bill requires the works to be approved by a 75% vote of the owners who will benefit from the works. The owners who benefit from the works are clear where the works are carried out on commercial property. However, commercial property upgrading works are also defined to include works carried out on common property. In this case, it may be less clear who are the owners benefiting from the works who are entitled to vote.

Can the Senior Minister of State confirm that a poll must still be carried out under the new section 77(3A) where the works are carried out on common property? If yes, can the Senior Minister of State share how HDB will determine who are the owners benefitting from works proposed for common property who are entitled to vote? Will this be based, for instance, on geographical proximity to the works proposed or the scale of the works proposed?

My second point is on the information that will be provided to property owners who are entitled to vote on the upgrading works. As I mentioned earlier, the upgrading works proposed by HDB must be to achieve specific purposes, including improving shopping facilities, encouraging commercial and community activities, and supporting economic and social well-being. In order for the property owners to exercise their vote meaningfully, it is important that HDB provide them with enough information for the owners to determine if these purposes will be met. Can the Senior Minister of State share if information will be provided to owners on how the upgrading works will achieve these purposes, including measurable indicators that HDB will monitor to determine if the purposes are achieved?

My last point is on the recovery of costs for commercial property upgrading works. The new section 78(3A) will allow HDB to recover the costs of commercial property upgrading works from every owner of such property and the Town Council responsible for the maintenance of common property. Such recovery can only be done after HDB has completed the works. Can the Senior Minister of State confirm if such recovery is to be done, whether the owners and the Town Council will be kept informed of the likely costs before a poll is taken? Will the owners be kept updated on any changes in the costs? It is not uncommon for construction costs to exceed initial estimates. Given that the recovery of costs is to be done only after HDB has completed the upgrading works, where the cost exceeds initial estimates, can the Senior Minister of State confirm who will bear the excess costs?

Madam, notwithstanding these clarifications, I stand in support of the Bill.

Mdm Deputy Speaker: Mr Henry Kwek.

5.08 pm

Mr Kwek Hian Chuan Henry (Kebun Baru): Mdm Deputy Speaker, I would like to declare that I am an Advisor to the Federation of Merchants' Associations, an industrial association that helps the SMEs in our heartlands transform and thrive. I stand in support of the amendment Bill, as it provides very timely and needed support to our heartland enterprises.

ROS is a wonderful program to ensure that our heartland shops remain relevant. In general, heartland merchants are very appreciative of the Government support and, frankly, how many governments in the world do we know proactively think about how to ensure that micro-enterprises, which many heartland enterprises are, thrive in both good times and bad?

Just think about the massive help that the Government has provided during COVID-19 and the CDC vouchers that get Singaporeans to spend more time at the heartland shops. The enhancement to ROS is very much welcome, as it is aimed at overcoming the main obstacles to implementing ROS – which is garnering sufficient support from the merchants to implement the programme.

I must stress that the existing efforts by HDB – both in terms of funding roadshows and the time put in by HDB to do outreach – is very useful and appreciated, and we certainly hope it can continue.

I would like to make three suggestions centered around how to generate support for ROS. Firstly, we can strengthen the partnership between HDB and Merchants' Associations (MAs) to persuade the shop owners. HDB, not MAs, currently writes to the owners. But some owners are very hard to reach and are not interested to responding to letters if they do not know much about the programme, or what is at stake. It is also very hard to put down all the complicated details and address concerns using letters only.

As such, I think many MAs hope that HDB can explore how we can better work with MAs, to jointly reach out to the shop owners, so that MAs can have a chance to appear in person, or at least speak over the phone and make a compelling case for the support of ROS.

The second point I would MND to consider is, can HDB consider excluding the no-response from the vote, if more than 70% of the shop owners have responded? In the long run, the upgrading of an area has huge implications to the vitality of the businesses and the livelihood of the people employed by the heartland merchants. And if a place fails to have a chance to do ROS, we know that it is quite difficult for ROS to be revisited for the foreseeable future, because there are so many other places that wants to do ROS. It is not like an en bloc, where you can have repeated attempts to do that.

So, that is why it is essential for the majority, who are usually for the upgrading, for the upgrading to go through. And by not counting non-responses, we can put in the right incentives for all the owners to respond and we are not depriving the owners of their voice.

The third suggestion I have is, it would be wonderful if HDB can work with MAs to come up with a low-cost preliminary design concept and detail out the works that would likely be done, so that the shop owners will know what they are paying for. From my understanding, the usual process is for the Government to hire an architect to come up with the plans after an upgrading is confirmed. But from the perspective of, let us say, somebody sitting on-the-fence, they would be more likely to be convinced if they have more information about what will be done.

Let me move to a different point, which is what is the right percentage of support for ROS. I am aware that some heartland merchants would welcome a threshold of 60% to determine whether a place can undergo ROS. Some even tell me that 50% is the appropriate number. They tell me that based on their experience, the support from certain trades, mainly chain stores, clinics, that have either strong branding, independent of the heartland locations or do not require much common infrastructure to attract businesses, usually are a lot less interested in supporting upgrading.

The MAs' concerns are valid. but I also understand why HDB would prefer the 75% threshold, as 75% is intuitively a fair number and is in line with HDB's very successful Housing Improvement Programme (HIP). That is why I suggested the three earlier suggestions on generating consensus, using 75% that the Minister proposed today. But I do hope that after a few years down the road, and after one or two rounds of ROS, HDB can then review whether the 75% threshold is the best option.

Beyond these three suggestions on generating consensus, I would also like to suggest that HDB consider prioritising ROS projects that can be added on to existing upgrading efforts – be it ROHS efforts to revitalise a town or when there is a plan by the local Town Council to do extensive renovations at the town centres. There is a lot of fixed cost when it comes to renovating common areas, especially common commercial areas, and when we can combine fundings from various schemes, it will be quite possible to achieve much better outcomes.

In conclusion, the amendments proposed today are excellent moves that would help spur heartland merchants, MAs and HDB to revitalise the vitality of heartland shops. And with that, I stand in support of the Bill.

Mdm Deputy Speaker: Senior Minister of State Sim Ann.

5.13 pm

Ms Sim Ann: Mdm Deputy Speaker, I thank the Members for their comments and their support of the Bill. Let me address the issues they have raised.

First, there were a few questions about how polling for upgrading works would be carried out. Under the ROS scheme, HDB provides co-funding for improvement of the common area within the shopping precinct to boost the vibrancy and competitiveness of HDB shops. This upgrading may include works at the shopfront that directly benefit the individual shop operators, such as replacement of the floor tiles or lighting at the shopping corridor. It may also include other common area works that would indirectly benefit the individual retailers by improving the overall shopping environment and increasing footfall to the area. Examples include building new spaces for promotional events, the introduction of entrance markers or way finders.

Mr Louis Ng and Mr Lim Biow Chuan have shared their concerns that shop owners who do not benefit from the ROS works – or perceive that they do not benefit – might vote against upgrading the common areas and asked if such shop owners should be excluded from the poll. Mr Henry Kwek also suggested for HDB to consider excluding non-responsive shop owners from the poll, sharing feedback that some heartland merchants would welcome a polling threshold of 60%, or even 50% instead. Miss Cheryl Chan also asked how the upgrading works could be put into effect if the likelihood of getting owners onboard is low.

First, on ROS works. Neighbourhood Centres have clear boundaries, and our intention is for ROS to be provided to a neighbourhood centre as a whole. However, as various precincts have different upgrading needs depending on their age and design, HDB does not stipulate a set scope of works to be carried out under the ROS programmes. Instead, a Local Working Committee (LWC) comprising members from the Merchants' Association (MA), the Town Council and HDB, will be formed when the precinct is selected for ROS. With the local stakeholders' input through the MA, the scope of works can then be tailored to best suit local needs.

The incidence of benefit for the upgrading works will depend on the design and configuration of each neighbourhood centre. We expect precincts selected for ROS to propose enhancements that can benefit the majority – if not all – of the shops in the precinct.

Next, if a poll succeeds, I believe Members would agree, that there is a need for parity for all shop owners. Hence, HDB will recover the cost of upgrading from all beneficiary shop owners, regardless of their vote or their attendance at the poll.

In this context, excluding non-responsive shop owners from the overall count would amount to further lowering the threshold for a successful poll. As Members would be aware, the key basis for this review is to avoid a situation where a single shop owner can exercise what is effectively a veto and deny the rest of the opportunity to upgrade, even if they were all supportive.

At the same time, we have to strike a reasonable balance with the consideration that some individual shop owners might not support upgrading for their own reasons.

We have hence taken a leaf from other upgrading programmes, such as the Home Improvement Programme (HIP), where the threshold of 75% has come to be widely accepted. We believe this would be a reasonable threshold for ROS to move towards.

For sites that continue to fail to meet the threshold of 75%, there are other upgrading programmes which will help to rejuvenate the common areas for the benefit of nearby residents, such as the Neighbourhood Renewal Programme, where HDB provides funding for the Town Council to upgrade common areas for the benefit of residents.

On Mr Lim's query on whether voting rights will differ based on the size of the commercial property, shop owners will be entitled one vote per beneficiary unit, regardless of size.

For shop owners with multiple beneficiary units, they will be entitled to one vote per beneficiary unit as the share of upgrading costs for the site is typically apportioned to the shop owners based on the number of shop units owned by the individual owner, among other factors.

However, in the case where HDB is the owner of the shops in the town or neighbourhood centre, HDB will only hold one vote, regardless of the number of rental units which can be considered as beneficiary units so that there is no contention on polling outcomes.

There were also questions relating to the scope and cost of upgrading.

Miss Chan, Mr Ng and Mr Kwek asked if HDB could come up with a preliminary design concept on the proposed works and provide information to shop owners ahead of polling, for them to exercise their vote meaningfully.

We agree that this is necessary. After the selected sites are announced and the LWC is formed, the LWC will work with a consultant to come up with the preliminary design concept for the upgrading works. Prior to polling, shop owners will be notified in writing of the full scope of works proposed so that they can make an informed decision on whether to support the upgrading. The specific details are being worked out and will be provided when we open the upcoming ROS Batch 8 for application.

[Mr Speaker in the Chair]

Mr Ng also asked who would bear the costs if the upgrading works were to exceed the initial cost estimates.

Shop owners will be notified of the overall estimated upgrading costs, as well as their share of the bill, before polling. In the event that the construction costs exceed initial estimates, HDB will work with the LWC on the best course of action for the specific site, which may include reviewing the scope of proposed works.

Mr Louis Chua also raised a question on whether HDB would consider wholly bearing the cost for upgrading to the common areas. In this case, we are talking about upgrading for the purposes of improving shoppers' experience and also with the view of drawing in more shoppers, greater footfall, which will result in better business and monetary gain to the shop owners. It is in this case therefore reasonable to expect some co-payment although as I have said we are reviewing the co-payment structure.

HDB co-pays a significant amount because we acknowledge that HDB shops also exist to serve residents. However, undeniably there is also a commercial interest involved. So, we believe that some amount of co-payment would be reasonable.

Mr Lim Biow Chuan also asked how the need to upgrade the common areas would be balanced against higher maintenance costs.

As mentioned earlier, when a Neighbourhood or Town Centre is selected for ROS upgrading, an LWC would be formed comprising members from the MA, the Town Council and HDB. As part of the LWC, the Town Council will be able to participate in the process of determining the scope of works and design of the upgraded precinct and provide a check to ensure that the proposed works will not generate significantly higher maintenance costs that are unsustainable in the long run for the Town Council, which remains ultimately responsible for common property.

In our engagements, it was highlighted that Town Councils may be constrained by funding issues. Please be assured that we are looking into this while balancing against the need for Town Councils to also have skin in the game and we will announce more details further on.

Miss Cheryl Chan also asked if HDB could consider including lift upgrading for blocks that were unsuccessful or opted out in the past as part of upgrading works under the ROS scheme.

Currently, there is a menu of upgrading works offered under the ROS scheme, which are funded jointly by shop owners, HDB and the Town Council. Main items include fixed awnings, re-tiling, shop corridor lightings, digital directory, way-finders, landscaping and street furniture and Digital Display Panels. Shop-specific items that individual shops can opt in for include vertical blinds and roller shutters.

Lift upgrading works are covered under the existing Lift Upgrading Programme. While we note that lifts are important to serve residents in common areas, lift upgrading is a big-ticket item that would exceed the budget allocated for works under the ROS scheme. So, we keep the two separate.

Other questions pertain to prioritisation of ROS sites to align with other upgrading programmes and retaining the roles of MAs, from Mr Kwek; and whether we have indicators of success, from Mr Ng.

We agree that coordinating upgrading efforts will facilitate more comprehensive upgrading of the shopping environment and minimise disruption to retailers. Hence, HDB will continue to prioritise town or neighbourhood centres which have been selected for or are undergoing other HDB upgrading programmes such as the Neighbourhood Renewal Programme mentioned earlier, Remaking Our Heartlands, or where the Town Councils have plans for Repair and Redecoration works.

We also agree with him that HDB should tap on the strengths of MAs to persuade shop owners to support ROS upgrading in their neighbourhood centres.

MAs indeed play an integral role in our commercial heartland areas, including revitalisation efforts within the neighbourhood centres. They are an important intermediary between HDB and the shop owners. Under the revised scheme, we intend for the MAs to continue to play a key role in the upgrading process.

The LWC, which I mentioned earlier, will include representatives from MAs, who will help us to shape the upgrading plans so that they can meet the needs of the shop owners. While the MAs will no longer need to gather support from the shop owners, HDB will still need to tap on their networks to engage and reach out to shop owners and share the upgrading plans with them.

To Mr Ng's query on measurable indicators that HDB monitors to determine if the purposes of upgrading have been achieved, there are varying outcomes that we aim to achieve through the upgrading works.

Fundamentally, upgrading should improve the shopping experience and hence, footfall. This should translate into revenue for stallholders. But there are also less measurable outcomes such as enhancing the vibrancy and local character of our heartlands, and their role as social hubs for the community to interact and forge bonds.

Ultimately though, the context, including factors such as catchment, trade mix and location, will differ from site to site and hence it would be difficult to impose a standard target across ROS sites. Nevertheless, we will monitor feedback post-upgrading so that we can continuously improve on the scheme.

And in this connection, although some of the points raised were not strictly to do with the clauses of the Bill, I would like to also take this opportunity to address them. In particular, I want to thank the interest expressed by Mr Chua and also Miss Chan in trade-mix curation in our neighbourhood centres and town centres. We agree that this is very important and I appreciate their raising the importance of getting the trade mix right.

Mr Chua has also talked about the use of point-of-sale system and he has also mentioned ShopperLink. Indeed, HDB is in the process of rolling out, point-of-sale systems to the malls that are under HDB ownership, precisely with a view to use the data gathered to analyse and to help shop operators achieve better outcomes and also to provide a better experience for shoppers overall. So, this is ongoing.

Likewise, ShopperLink is also progressively being rolled out. It is a work-in-progress and I thank Mr Chua for his interest in ShopperLink.

As for the specifics, with regards to the injection of eating places in our towns, HDB follows planning parameters for the insertion of food and beverage (F&B), as well as other kinds of amenities and facilities needed by residents as we plan and build each town. In the case of Sengkang, we have been hearing feedback from residents and also progressively been injecting F&B or eating facilities, especially as new developments come up. If the Member has specific suggestion or feedback, he can share it with HDB, which we will study.

Mr Speaker, as mentioned in my opening speech, our heartland shops play important social and economic roles in our neighbourhoods. We know that our heartland shops hold a very special place in the hearts of Singaporeans. Hence, we are giving more support our heartland merchants through enhancing the ROS scheme with formal polling provisions.

Overall, the amendments will enable us to better facilitate physical upgrading, which is a first and necessary step in our plans to refresh and upkeep the vibrancy of our heartland shop precincts. Mr Speaker, Sir, I beg to move.

Mr Speaker: Any clarifications? None.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Ms Sim Ann].

Bill considered in Committee.

[Mr Speaker in the Chair]

The Chairman: The citation year "2022" will be changed to "2023", as indicated in the Order Paper Supplement.

Clauses 1 to 8 inclusive ordered to stand part of the Bill.

Amendment agreed to.

Bill reported without amendment; read a Third time and passed.