On the Eligibility Criteria of the Public Rental Scheme in Singapore

Abstract

The key pillar of housing policy in Singapore is homeownership and since the 1960s, Singapore has progressed to achieve a homeownership of more than 80%. However, there are still a proportion of low-income households living in heavily subsidised rental flats provided by the Housing and Development Board under the Public Rental Scheme. With the strict eligibility criteria for the scheme, households might face a situation of not being able to afford market rents or afford to purchase a house, and yet do not qualify for the scheme. As such, there might be a conundrum where households aspire for homeownership, and yet wish to continue enjoying the low rents under the scheme. This study aims to identify whether there is welfare dependency through examining the income and working habits of the low-income households. The analysis of their housing preference would also help us to determine whether the low-income households are ready for homeownership. This will then help us decide if the eligibility criteria of gross household income not exceeding $1,500 should be adjusted. A door-to-door survey was carried out to understand the housing preference and working habits of the low-income households. Thereafter, the results for housing preference were analysed descriptively. An Ordinary Least Square Linear Regression was also carried out to analyse the relationship between household income and the working habits, namely through occupation type, employment type, and working hours. The regression results showed that there is no sign of welfare dependency as households still have good occupation, employment status and working hours despite having income close to or more than $1,500. The study also showed that the low-income households do aspire to buy a bigger flat, however they are unable to do so with an income exceeding $1,500 marginally. To further encourage homeownership among the low-income groups, the income limit is thus proposed to be adjusted upwards to ensure they are self-sufficient when they leave the scheme.