Monday, November 13, 2006
[RealEdge] BT : HDB revising rental rates based on household income
| Published November 13, 2006  | |
| HDB revising rental rates based on household income Majority of households renting will not be affected THE Housing and Development Board (HDB) said yesterday that there would be an 'alignment of rental rates to household income', with some rents increasing from about 30 per cent to as high as 70 per cent of market rent. There are currently about 40,000 rental flats and HDB said that the majority of households renting these units - around 80 per cent - will not be affected as they have a household income of $800 or below. This entitles the household to rent flats for about 10 per cent of market rent, or what HDB calls, '1st-tier rent'. In October 2003, HDB introduced '2nd-tier rent' for those households with incomes of between $800 to $1,500 per month, pegged at 30 per cent of market rent. HDB said that from March 1, 2007, 'alignment of rental rates' will now be phased-in over two tenancy renewals. HDB rental flats are let on a two-year term tenancy. Based on aligned rents, households earning between $800 to $1,500 per month will pay 30 per cent of market rent by the completion of the second tenancy renewal while those earning between $1,500 to $2,000 will pay 50 per cent of market rent. Households that earn above $2,000 per month will pay 70 per cent of market rent. Rents are also being aligned for households that have previously sold one subsidised HDB flat in the open market. For households earning $800 or below, rents will be 30 per cent of market rent. Those earning between $800 to $1,500 can expect to pay up to 50 per cent of market rent. HDB said that this is to ensure 'equitable distribution of public housing subsidy'. That some households were taking advantage of HDB's subsidised rental subsidies was broached by National Development Minister Mah Bow Tan in Parliament last Friday when he cited a family which had been renting for 20 years even though the household income had increased from $700 to $5,000 per month. |
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