Impact of Wage Increases under Progressive Wage Model on HDB Rental Housing Eligibility Criteria

6 Ms Denise Phua Lay Peng asked the Minister for National Development (a) how are HDB rental housing eligibility criteria and rental rates affected by the increase in wages arising from the Progressive Wage Model; and (b) whether low-wage earners who may become ineligible for rental housing or who have to pay higher rents as a result of higher wages will be discouraged from renting HDB flats.

The Minister of State for National Development (Assoc Prof Dr Muhammad Faishal Ibrahim) (for the Minister for National Development): Sir, public rental housing is provided as a social safety net for lower-income and vulnerable households who have no other housing options. HDB adopts a holistic and needs-based approach when assessing requests for public rental flats, and the $1,500 income threshold is just a guideline and not a hard ceiling. Applicants will not be rejected based on income alone, as HDB will also consider applicants' circumstances, including their household size, family support, housing budget and options.

For existing tenants who experience wage increases, HDB will not increase their rents during the current tenancy term. When their rents are reviewed at tenancy renewal, HDB will also consider other factors such as household size, in addition to income, to ensure that the rent remains affordable. Where necessary, HDB will exercise flexibility based on individual circumstances. In cases where the rent is increased, HDB will also ensure that the rent increase is lower than the income increases, so that tenants are always better off when their wages increase.

With the uplifting of wages through the Progressive Wage Model, we hope that more lower-wage workers will be able to purchase homes of their own. HDB has various measures in place to help public rental tenants move to home ownership.

These include grants such as the Enhanced CPF Housing Grant and Step-Up CPF Housing Grant, the Fresh Start Housing Scheme, priority in sales exercises through the Tenants' Priority Scheme, as well as personalised guidance on the flat-buying process from HDB's Home ownership Support Team. Once public rental tenants sign the Agreement for Lease to buy a new flat, their rents will not increase for the rest of their stay, even if their incomes increase in the period before their flat is ready.

Mr Speaker: Ms Denise Phua.

Ms Denise Phua Lay Peng (Jalan Besar): I thank the Minister of State for his answer. I wanted to reflect this ground feedback from employers and bosses of lower-income workers. They are telling me that when they increase the pay of the workers, for example, through compliance to PWM, some of the lower-wage workers were very worried, that, one, they will not be eligible for HDB rental flats because although it is mentioned that $1,500 is a guideline, I think, to many of them, from the official document, it does not sound like it is a guideline; it sounds like that was an income criterion for rental eligibility. That is one.

Secondly, they are also worried that their HDB rental will increase. In some of these cases, we have seen higher than the rate of salary increases.

So, I hope that there can be found a way to communicate and assure, both the workers and their employers, that indeed what Minister of State Faishal has said, that there will be flexibility, that HDB will align the increase in wages for these lower-wage workers and the eligibility criteria for such important and useful benefits, like housing and other relevant social benefits.

Assoc Prof Dr Muhammad Faishal Ibrahim: Sir, I thank the Member for the feedback. I will take it back to the Ministry.

I just want to assure the Member that in fact, over the last five years, about 2,700 applicants whose household incomes exceeded $1,500, were offered a rental flat. So, we will look at it holistically. We want to assure the Member that we will continue to do so and we want to help as many people as possible to have that housing option.

Mr Speaker: Mr Pritam Singh.

Mr Pritam Singh (Aljunied): Sir, just a quick question. What is the backlog waiting time now for rental flat allocation?

Assoc Prof Dr Muhammad Faishal Ibrahim: I thank the Member for his question. As we shared in the answer to the September Parliamentary Question, the waiting time is about eight months.