Interim Rental Housing: A policy for the people?

 

 

It is certainly about time that the Housing Development Board has decided to review its leasing model under for the Interim Rental Housing Scheme, which was started in 2009 to help needy families find temporary housing and accomodation whilst they resolve their housing issues. Flats that were seemingly slated for demolition in Bukit Ho Swee, Bedok, and Toa Payoh were converted into units that would be either shared by families, or smaller one and two room household units taken up by bigger families. 

In the current model, the management of these interim rental blocks is outsourced to private operators such as EM services who manage the care of these units, as well as the entry and exit of families from these households. These aspects would also include the monthly costs each family would have to pay, and how long they would be allowed to live in these flats. 

The formulation of this policy represented the government's initiative to address the rising instances of low income families finding themselves homeless after losing their flats, in face of the limited supply of shelters available that are being operated by the different welfare groups in Singapore, for example Project Hope. 

When I first heard wind of such a project, my thoughts were that it represented a short term yet proactive attempt towards addressing the issues of homelessness in Singapore. However, the quick takeup rates of these interim homes made the issue of homelessness for the lower income populous one that is more urgent and requiring further examination. However that would be a discussion for another day, where here I will be focusing on the current difficulties and challenges of the current leasing model. 

The overt statement in this policy would be to address the immediate needs of the low income families, but the current model of practice undercuts this philosophy just by the very fact that a profit driven organisation is managing the leasing of such flats. Although these flats are leased at well below the market rate to low income families, the whole idea of letting a private and profit driven agency manage and address a social problem is one that is questionable

If I were to "analyse" this problem within my limited knowledge of economics (please correct me if I am wrong), the issue of homelessness may be defined to be a social cost of the current market patterns of demand and supply. Families are unable to afford houses at the current "normative" market prices, and are hence forced to await the heavily subsidised one or two room rental flats, and join the long queues to eventually be allocated a flat.

The presence of these homeless families are thus considered the "normal" effects of a competition-driven meritocractic society, (alas, this creates the concept of the "other" mentality, where the poor would be blamed for their difficulties; though I once again won't elaborate further on this matter in this post).

To get to the point, to address these social costs, frequently public or social goods need to be introduced. The Interim Rental flats represented the public goods that were required by the government to address the social costs of homelessness. Within the laws of a profit making institution, providing beneficial public goods would result in positive externalities (for e.g clients being able to find better jobs and stability through getting appropriate shelters) that are not remunerated to the profit seeking institution. Therefore the incentive to produce this product towards the social benefit of the public (or more specifically low income residents) would be insufficient. The market would then not be able to provide a product or service that is really needed by the clients. 

This is evident in the current leasing model, where the private organisations in their natural state, function towards minimising cost, and maximising profit. Instances occur where flats originally meant for the low income instead are rented out at market rental prices to  Singaporeans who can afford higher rental, permanent residents, students or those with employment or S-Pass permits.

Families who are on the verge of homelessness are faced with strict rules created pertaining making full payments of $600 to $800 (1st month pay plus one extra month up front) before they can move into a poorly maintained home (with minimal living facilities, amenities, and lift accessibility) to share with another family. They are fined and asked to pay higher prices even though these families are already afflicted with multiple issues of irregular employment. Even worse, they go into greater debt after losing their homes, lowering the likelihood of upward mobility.

The way of supporting these families who are are marginalised through the current structural system would probably not be to place these families into an even structured profit driven system. 

The profit drive institution is simply not built to empathise with the realities that unique circumstances that this families face. 

The solution is simple (to say, at least): Social Costs need to be addressed by public goods, by the public sector. Get the social service agencies in. Each family coming can be treated as an individual case, and different plans to suit each family's ability. At the structural level, the systems that make it difficult for these families to find employment and afford homes have to work hand in hand.

It may be time for the Ministry of National Development to work closely with the Ministry of Community, Youth and Sports. The fact is that you can't extricate the social from most things.

 

 

 

 

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