Chapter 1
When HDB was established in 1960, its mission was to alleviate the acute housing situation facing our country post-independence. HDB role was the landlord of public housing, providing low affordable rental units to the mass.
This business model more or less remained intact, until the 1980s, with the liberalization of CPF and the introuduction of Asset Enhancement Scheme, HDB then effectively relinquished its power to set the rental rate for public housing units to the flat owners (of course, except for those flats taken back for SERS or otherwise).
In relinquishing its power (in rental rate), an investment element was introduced in a public HDB flat. Before exploring further this investment element, let's look at the situations before and after in simplistic way:
Before, HDB carried all the financial burden of funding the construction of HDB flats, and collect rents. A pure landlord situation.
After, the HDB flat-buyers carried all the financial burden of funding the construction of the HDB flats. HDB retains the title of the units they are buying.
In the next chapter, we look into the investment element of a HDB flat.