Rent Increase Affecting HDB Public Rental Scheme Households
Ministry of National DevelopmentSpeakers
Summary
This question concerns rent increases for HDB Public Rental Scheme households and the transition to home ownership, as raised by Ms Carrie Tan. Minister for National Development Mr Desmond Lee stated that 6% of households saw rent increases in 2021, down from 15% in preceding years, with 85% of increases being $200 or less. Rent is reviewed at renewal via a tiered structure based on income thresholds, ensuring that any increase is significantly lower than a household’s income growth. Tenants may request rent reductions if their incomes decrease mid-tenancy, while market rates apply only to those who can afford other housing. Since 2012, 38 out of 7,500 households who progressed to home ownership returned to rental housing after an average of six years.
Transcript
27 Ms Carrie Tan asked the Minister for National Development (a) how many HDB Public Rental Scheme households have had a rent increase from 2020 to 2021; (b) how does this number compare with the five years preceding 2020; (c) what has been the lowest, highest and average rent increase in the past five years; (d) whether there is a formula for deriving the increase in relation to changes in tenants' incomes; and (e) since 2012, how many households who progressed from rental housing to home ownership reverted to the Scheme and what is the average length of time in between.
Mr Desmond Lee: In 2021, about 6% of the rental households that renewed their tenancy experienced a rent increase. In the preceding five years – that is, 2016 to 2020 – the corresponding figure was 15%.
From 2017 to 2021, among the households that experienced rent increases, 85% experienced a rent increase of $200 or less. The range of rent increase is from $5 to around $1,000. There were a handful of households that were charged market rents as their financial situation had improved significantly, and they were assessed to be able to afford other housing options but remained in rental housing on an exceptional basis.
Rents are only reviewed during tenancy renewal, once every two to three years. Tenants will not experience any rent increases during their tenancy term, even if their incomes increase. On the other hand, tenants may request for a rent reduction at any time, if their incomes decrease during the tenancy term.
At tenancy renewal, the rent payable is assessed based on a progressively tiered rent structure. Rents may increase only when household incomes cross certain income thresholds and these income thresholds are several hundred dollars apart. Before increasing rents, the Housing and Development Board (HDB) will consider other factors, such as household size, and will ensure that any rent increase is significantly lower than the income increase.
From 2012 to 2021, 38 rental households that moved on to home ownership subsequently moved back into public rental housing, after an average of six years. Over the same period, a total of 7,500 rental households moved on to home ownership.