Rise in Public Flat Rentals Due To Income Increases and Quantum of Rental Increases
Ministry of National DevelopmentSpeakers
Summary
This question concerns rent increases for public rental flat tenants due to income growth and whether current adjustment models disincentivise work or income progression. Minister for National Development Desmond Lee stated that in 2024, only one in five households with income growth saw rent increases, with a median hike of $150 against a $1,300 median income rise. Rents are reviewed only during tenancy renewal every two to three years, and increases are kept significantly lower than income growth to ensure tenants are better off. Specific protections also exist for tenants who have booked a flat and made a downpayment, as they experience no further rent increases regardless of income changes. The Government continues to review the Public Rental Scheme to maintain work incentives and consider individual household circumstances to ensure rents remain affordable.
Transcript
71 Mr Gerald Giam Yean Song asked the Minister for National Development (a) how many public rental flat tenants experienced rent increases in the past year due to income increases; (b) what was the average percentage increase in such cases; (c) whether the Ministry has conducted studies into the extent to which rent increases may disincentivise work or income progression among tenants; and (d) whether the Ministry will consider further refining the current rent adjustment model to better support tenants' efforts towards financial independence.
Mr Desmond Lee: Rents under the Public Rental Scheme are reviewed during tenancy renewal, every two to three years. The Housing and Development Board (HDB) does not impose rent increases during the tenancy term, even if tenants' incomes increase during this period.
In 2024, about a quarter of public rental households that renewed their tenancies had experienced income growth. Among them, about one in five experienced a rent increase. Their median rent increase was about $150, significantly lower than their median income increase of about $1,300.
The Government provides higher subsidies to lower-income households as they require greater support. To maintain the incentive for work and income growth, the Government has made refinements to the public housing rent structure over the years. HDB generally ensures that rent increases are significantly lower than tenants' income growth, so that tenants are better off as their incomes improve. Factors, such as household size and individual circumstances, are also considered to ensure that the rent remains affordable. In addition, tenants who have signed the Agreement for Lease and made the downpayment for a booked flat do not experience any further rent increase, even if their income increases during the time they are waiting for the booked flat.
We will continue to review the Public Rental Scheme regularly to ensure it meets tenants' needs.