HDB consistently incurs losses selling new flats

I REFER to the letter, ‘No subsidy in new HDB flats, just a discount’ (ST, Nov 25), by Mr Cheong Chee Mun.

Mr Cheong said that HDB acquires land for public housing at ‘very low cost’. This is not correct. The land for public housing is purchased from the Singapore Land Authority at market value, based on the Chief Valuer’s assessment.

The total cost of developing four- and five-room flats is higher than the example of $200,000 mentioned in the letter. The development cost is even higher in mature HDB estates where the market valuation of the land is higher. Hence, the assumption that HDB enjoys a profit of $150,000 per flat is wrong.

HDB has consistently incurred losses in the development and sale of new flats. It is unable to fully recover the costs of development as it sells new flats at a subsidised price. Together with the other types of housing subsidy, such as the CPF Housing Grant and the Additional CPF Housing Grant for lower-income families, the sale of subsidised new flats results in a tangible and substantive cost to the Government. Specifically, over the last five years, HDB’s home-ownership programme incurred an average annual deficit of $390 million.

Kee Lay Cheng (Ms)
Deputy Director
(Marketing & Projects)
For Director (Estate Administration & Property)
Housing & Development Board

$390 million annual deficit just by moving land from pocket A to pocket B, and money from pocket B to pocket A. That’s damned mind-bogging, isn’t it?

Let me make this simpler for you so you would understand yet another ‘million dollar mindf*ck’.

Assuming your mom stays with you and you need to give her $500 / mth for allowance.

Now if you rent out the room your mother is staying you will get $800 / mth. And being the ‘filial’ because your mom has raised you, you decided she should just pay you $300 / mth of rent instead. And so you deduct that $300 from her and gave her only $200 every month. That means you have ‘actually’ subsidized your mother $500 ($800 mkt rate – $300 your mom would pay), and on top of that you still gave her an allowance of $200.

Therefore, your mom is being ‘heavily subsidized’ and you are ‘consistently’ making a ‘huge loss’ of $700 / mth. And that’s a whopping deficit of $8400 every year if you didn’t notice!!

How’s this Tali-PAP’s million dollar mathematics for you?! If you don’t geddit that all of these figures are all pulled out of thin air, because the land would only worth how much they said it would worth when somebody actually bought it, I feel really sorry for you.

You surely deserved the Tali-PAP gover-min for the rest of your miserable life!