COS 2022: Prime Location Public Housing Scheme

MP Pritam Singh

Mr Pritam Singh (Aljunied): The use of the word “lottery” to refer to the allocation of HDB flats in the online domain dates back to as far as 2003. The term “lottery effect” started coming into widespread use in 2015, after flats at The Pinnacle@Duxton reached their Minimum Occupation Period (MOP). This lottery effect was explicitly commented on by Minister Lawrence Wong in 2016 when he was asked about it while he was the National Development Minister. He talked about possible measures to curb this effect and the Prime Location Public Housing Scheme (PLH) was finally launched in 2021 with the project at Rochor. The second PLH project was launched on 17 February, last month. The PLH scheme continues to raise many questions. The first question is: how was the subsidy clawback determined for Rochor and the Kallang-Whampoa developments? How did the Government arrive at the figure of 6%?

The second related question is what is the purpose of the clawback? Is it to avoid high prices for PLH flats, or is it to lower the lottery winnings of PLH flat owners? If it is to avoid high price rises, that may not be the result of the subsidy clawback. Six percent is likely to be included in a future sale price after the MOP with a very long 89 years left on the lease. Buyers and sellers are likely to simply add the 6% into their overall calculations. The unintended effect could be that prices are driven up even higher than they otherwise would be. The higher the clawback, the higher the prices may be driven up.

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The third question concerning the PLH is: how does the HDB determine which development would be considered as being in a prime location? This is not merely being asked to satisfy curiosity. If the Minister makes known the criteria, then economists, urban planners and other experts may study the criteria and give feedback to the Government their validity or otherwise.

And the fourth question is: would the PLH scheme further drive up the prices of developments and resales flats close to PLH estates? The scheme does not admit of gradual differences between PLH projects and non-PLH projects. The distinction is all or nothing. Has the Government done calculations or made an assessment of the likely effects on the prices of non-PLH flats in close proximity to PLH projects? If so, I ask the Minister to share the calculations in this House.

These questions need answers, because it is important that the perceived solutions to problems do not create new problems themselves. Ameliorating the lottery effect should not be a gamble.

Ministry of National Development
8 March 2022

https://sprs.parl.gov.sg/search/sprs3topic?reportid=budget-1881

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