Monday, August 20, 2018

All HDB flats to get upgrading twice during 99-year leases

By Alfred Chua

20 August, 2018


Home Improvement Programme to be rolled out to younger flats

SINGAPORE — Every Housing and Development Board (HDB) flat can expect to undergo major upgrading twice during its 99-year lease period, with the new Home Improvement Programme 2 (HIP 2) rolled out for ageing units at the 60- to 70-year mark.

At the same time, the HIP scheme — which currently covers flats built up to 1986 — will be extended to blocks constructed up to 1997.
This works out to another 230,000 benefitting from the programme, allowing estates like Pasir Ris, Yishun, Tampines and Jurong to qualify for upgrading.

Making the announcements in his English speech at the National Day Rally at ITE College Central on Sunday (Aug 19), Prime Minister Lee Hsien Loong noted that the existing HIP scheme — launched 10 years ago — has been a "very popular … essential upgrade".
Under it, the Government foots up to 95 per cent of the bill, with residents paying as little as a few hundred dollars for the upgrading which covers maintenance issues, such as ceiling leaks and damaged pipes, and upgrade of the electricity supply.

The final batch of HIP flats will be announced by next year, he added.

But in the decade since the HIP was rolled out, some flats which did not qualify under the 1986 cut-off are "now also starting to show their age", the Prime Minister said.

Citing the example of Pasir Ris, he told the audience that the oldest flats in the district, which did not qualify for the original HIP scheme, are about 30 years old, and beginning to show signs of wear and tear.

Hence, the expanded HIP will allow most flats to be upgraded around the 30-year mark after they were first built, which should make them good for another 30 to 40 years, before they start showing their age again.
"We are determined not to let our public housing degenerate into ragged, squalid slums, which has happened in many other cities," Mr Lee said on Sunday.

Thus, he announced that all public flats will receive a second round of heavily subsidised Government upgrading — under HIP 2 — to help keep them "safe and liveable, and also help them retain their value as their (99-year) leases run down".

[How will HIP 2 help them retain their value? The key reason why the value has decreased is because buyers face constraints in mortgage loan and the use of their CPF. Until those rules are changed, the value of flats with less than 60 years of lease will not rise significantly.

Put another way, in an extreme way - there is only one year left in your lease for a landed property. Will you install a new Jacuzzi? Will that increase the value of your property significantly?]

HIP 2 will likely be launched in about 10 years' time, just as the Republic's first public flats hit 60 to 70 years of age, noted Mr Lee.

Adding that the original HIP will cost the Government more than S$4 billion, Mr Lee said HIP 2 is a "huge financial commitment for the Government" as it "will probably cost even more, because the flats will be twice as old by then".

"But it is well justified, and we will do it so long as (the Ministry of Finance) MOF has the money," he said.

Introduced in 2007, the Government fully funds essential improvements under HIP in flats built up to 1986. They must not have not undergone the Main Upgrading Programme, HIP's predecessor.

[So there is no more Main Upgrading Programme.]

The Government also subsidises a large portion of optional improvements — such as new front doors and grilles, upgrading existing toilets, as well as options to make flats more elderly-friendly with the installation of grab bars, slip-resistant tiles and ramps.

The upgrading will proceed only with at least 75 per cent of a block's eligible Singapore Citizen households voting in favour of it.

As of Aug 1 this year, the HIP has been announced for about 242,000 of the 320,000 eligible flats under existing criteria. Of these, upgrading works have been completed for more than half, or or 122,000 flats, with work underway in the remaining flats, the HDB added.

[See also "HIP 2 is not a real option". ]

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