A new change in the Housing Development Board (HDB) rental rule for non-Malaysian work permit holders, had removed the ability for them to rent an entire Housing Board flat.
This change, which was effectively from 1st January 2017, will affect non-Malaysian work permit holders from the manufacturing sector. Instead of renting a whole Housing Board flat, they can now only rent rooms. Holders who are still under their subletting agreements can continue their living till their existing agreements expire.
Currently, work permits in Singapore are issue to semi-skilled foreign workers in the construction, manufacturing, marine, process or service sectors.
This new change in rental rule is expected to impact approximately 3.5 per cent of HDB households that are leasing their entire or portions of their flats. Based on the figures by HDB, there were 52,394 HDB flats that are entirely rented out as of 30th September 2016. However, the figures are unavailable for those with portions of flats rented out. Thus, the absolute impact of the change remains debatable.
Affected flat owners had been notified about the changes on 1st June 2016, with a letter sent out by HDB, to allow sufficient time to adapt and make the required changes. The implication of this change meant that flat owners now can no longer rent the entire flat to non-Malaysian who hold work permit from construction, manufacturing, marine, and process sectors.
Since 7th November 2006, non-Malaysian work permit holders from the construction sector are not able to rent any HDB flats or rooms. This rule was further extended to the marine and process sectors since 1st May 2015.
As a result of the change, only those non-Malaysian work permit holders in the service sector can rent an entire HDB flat. However, HDB cautioned of future reviews of its rules on a routine basis, to ensure a balance in the demand from flat owners and tenants.
HDB flats and rooms can still be rented out to Malaysian work permit holders with considerations of the “close historical and cultural similarities between Malaysians and Singaporeans”.
Having said that, the regulations on the number of rooms entitled to be rented out, remain unchanged. There are a maximum numbers of rooms eligible flat owners can rent out and that depending on their flat type. For those who own a HDB 3-room flat, only 1 room can be rented out. While for those who own a HDB 4-room flat and bigger, only a maximum of 2 rooms can be rented out.
The reason behind the change, as mentioned by HDB, was a component of the Government’s longer-term plan to have non-Malaysian work permit holders living in purpose-built dormitories and approved workers’ quarters. These accommodations are fitted with the appropriate facilities that suit the holders’ needs to better.
Despite the change, some employers felt that it will not affect the number of foreign workers in Singapore. While majority of the manufacturing firms currently do not get involved in their workers’ accommodation choices, there are already some firms housing their workers in purpose-built dormitories.