Wednesday, August 19, 2009

The failure of past success - HDB

The news article published on The New Paper is not new. Moons ago, The Malay Newspaper Berita Harian has published alarming figures on those who are forced out of their HDB flats when they could not afford to pay their mortgage. They were even told by the HDB staff to "stay with their friends or relatives" instead of giving them a solution to their housing-financial woes.

The newspaper report actually gave a slanted connotation on the whole issue. Did Mr. Rafi bought a flat that is way beyond his means? Apparently no. Base on a monthly salary of $2,800, his mortgage payment of $900 is just about one third of his total salary. Ask any financial planner and they will tell you that this is quite alright. He did not buy a house that he could not afford back then.

It is only when he lost his job and found a job that pay less than half of what he used to get that make him unable to fulfill his mortgage payment. This is the key problem that the reporter refused to address.

Of course the reporter hinted that the blame of his plight now is due to "ill advice" from property agent but seriously, what other options could he possibly have other than selling off the flat that he could no longer afford?

The REAL BLAME lies in HDB and its policy! HDB KNEW that Rafi and his family can no longer afford to pay the mortgage and the only option is for him to sell their flat. But wait, where should they be living if they sell their flat? HDB refused their plead to rent a flat from them! I mean, rules and regulations aside, HDB could actually sit there and tell people that sorry, they could only live off the street or live with somebody else and they could not rent any flat to them!

What has become of this PAP government? This is a clear case of REAL NEED! Housing policy such as HDB has been one of PAP's greatest political achievement back in the 1970s and 1980s. They were proud to say that every Singaporeans will have a decent roof over their heads and this is their great political achievement. But now, this no longer holds any truth!

HDB, through the PAP government's policy, has actually DENIED Singaporeans of any roof over their heads! This should be the REAL ISSUE of this newspaper report! And there are many more people in the same plight and it was reported in Berita Harian that many Singaporeans who could not pay for their flats will be evicted out of their flats and HDB will not provide any alternative housing (i.e. rented flats) for them!

I think PAP's ultra-capitalist approach to governing Singapore has just gone too far. Where are the visions and promises of the past PAP for Singaporeans to have decent roof over their heads, a decent job, really cheap subsidized healthcare and the great promise of CPF covering their retirement needs?

Contrary to what Prime Minister Lee wanted us to believe in his National Day Rally, Singapore has become worse, not better! At the very least, back in 1970s and 1980s, we do not leave people to live off the street without a roof over their heads. We did not need to demand patients and their family members to guarantee that they are able to pay for whatever medical costs before admitting them into the hospitals which are now really overpriced. We did not have massive influx of Foreign workers to become cheap labour substitutes of Singapore workers and depressing our wage. Our wages are stagnant or even regressed for some segment of Singaporeans for the past 10 years while price hikes (Public Transport fare) become a common practice.

PAP's past success has failed. CPF as retirement funding has failed. HDB as part of 100% housing for all has failed. Affordable basic Healthcare has failed. Providing stable and good pay jobs has failed. There is really little past success of PAP left.

Goh Meng Seng

Mon, Aug 17, 2009
The New Paper

Their spiral into the streets

RISING property prices have a way of blinding you to stark realities like affordability.

Just ask Mr Mohamad Rafi and Madam SBagam.

Their stories are similar - they bought HDB flats they couldn't afford and when they fell behind on payments, they made poor decisions, sometimes based on wrong advice.

Read all the stories:
» Her descent into the van
» So what can we do for them?

They claimed that housing agents told them to sell their flats and pocket the profit, then get rental flats.

But HDB rules do not allow someone who sold a flat in the open market to get a rental flat until 30 months after the sale.

Increasing demand for rental flats also means they have to join a queue, says HDB.

Meanwhile, they run out of money and end up homeless.

The problem has raised concern in the Malay-Muslim community, with the Minister for Muslim Affairs, Mr Yaacob Ibrahim, recently mentioning a need for the Malay community to exercise financial prudence.

He said last month: 'There is enough evidence to suggest that the Malay community is overstretched.

'They have extended themselves in terms of credit, buying homes beyond their means... there is a downward spiral effect.'

Mr Mohamad Rafi used to earn $2,800 a month as a forklift driver. He didn't get any CPF contribution, had little savings, but the 30-year old newlywed didn't think twice before buying a four-room flat for $244,000 in Clementi in the open market.

He used $29,000 from his CPF savings from his earlier jobs and took a HDB loan, repaying $900 a month.

That was in 2000 and the economy was booming.

But, as the economy slowed, he was retrenched after his company went bust in 2004. He managed to get another job as a forklift driver, but at just $1,200 a month (without CPF contribution).

By then, he and his homemaker wife had two children.

As his debts spiralled out of control, his HDB repayments dwindled to irregular payments of $200-$400.

'There was no way I could afford the flat anymore,' he said.

Within three years, he ran up arrears of $20,000. After repeated reminders, HDB sent him an acquisition letter in 2007 along with a court order.

He was told that if he wanted to keep his flat, he had to pay up half of his arrears.

'Where to find $10,000 like that?' he said.

Grace period

Desperate, he sought the advice of a property agent friend who told him that he could seek an MP's help to ask for a grace period.

He was granted 10 months' grace and was advised by his friend to sell his flat in the open market.

At end 2007, he sold his flat at a loss of $19,000 and had hardly anything left after settling his arrears.

With no money and no home, two children and his wife pregnant with their third child, he was at his wits' end.

His parents' flat in Bukit Panjang had been sublet, he said. So the family headed to Hawaii Hostel in the Bencoolen area where they paid $36 a day for a simple air-con room and free breakfast.

The family of four squeezed into a double bed.

'It was so cramped, I was sleeping like a mummy,' he said.

In March last year, his parents asked him to move in with them after the subletting period ended.

But shifting to his parents' flat came with a hefty price.

He had to quit his job to take his 62-year-old mother to the National Kidney Foundation dialysis centre in Toa Payoh thrice a week

Why didn't he ask his wife to take his mother for dialysis? He claims she was busy looking after the children.

He also had to help his father, then 65, sell ice-cream on a pushcart, for which he got $15 to $25 a day.

After a family dispute in March this year, he left his parents' home. Now with a 5-month-old daughter, the family of five had to put up at his father-in-law's rental flat in Bukit Merah.

With no income, he could not support his family and even took his children out of school.

His first daughter was in Primary 1 while his second was in kindergarten.

He returned to Hawaii Hostel last month but left after five days because he could not pay the bill.

For the past month, his family have been roaming the streets in the Bugis area in search of shelter.

They have spent nights outside Fu Lu Shou Complex, Sim Lim Tower, Sim Lim Square and Burlington Square.

On Wednesday night, they rested in the 24-hour McDonald's outlet in Bugis.

'People come to McDonald's to eat, but for us it is where we sleep,' he said.

He now works at the Thieves' Market in Sungei Road as a driver-cum-helper for one of the hawkers.

He now regrets buying his flat without anticipating that his financial situation could change.

Asked whether he felt ashamed, he said: 'What to do, it's our reality now.'

Nurul Asyikin Mohd Nasir, newsroom intern




Mr Mohamad buys 4-room flat in Clementi for $244,000. He was earning $2,800 a month and could afford $900 monthly HDB payments


Economy goes bad. His salary drops to $1,200. Can only make irregular payments of $200 to $400


After repeated reminders, HDB sends acquisition letter. He approaches MP for help and gets 10 months' grace

end 2007:

Mr Mohamad sells flat at $19,000 loss. Left with no cash after paying HDB, family stays in hostel

Mar 2008:

Moves to parents' home in Bukit Panjang. Mr Mohamad quits job to look after mother. Earns about $15 a day selling ice-cream

Mar 2009:

Leaves parents' home after dispute in March. Moved into in-laws' home. Left the home last month. Now living on the streets

This article was first published in The New Paper.

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