Renting is no longer a dirty word to young Singaporeans

Ng Wei Kai

21 November 2021

Older Singaporeans wedded to the ideal of home ownership may not realise it, but social norms around household formation may be changing. Survey data shows it is more common for young people to live outside the family home.

Data from the Department of Statistics shows that between 1990 and 2020, the number of Singaporeans and permanent residents under the age of 35 who are either living alone or away from their parents rose from 33,400 to 51,300. The upward trend is accelerating. The figure jumped by over 10,000 between 2019 and 2020. It included singles and those who are widowed, divorced, separated or married but not living with their spouse.

Anecdotally, there are reports of more young people moving out to rent a place. Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie, said that while many people may still prefer buying in the long term and public housing in Singapore is affordable, she has seen an increase in the number of millennials renting during the pandemic.

Meanwhile, high prices in the resale market have resulted in landlords selling their units, bringing down supply and keeping rents high. "It is not only the affluent who are renting, there are also some who work normal jobs who are choosing to split rent with friends," she said.

Lawyer and fitness trainer Clara Nah, 23, is renting a room on a short-term lease through co-living company Hmlet, which saw its proportion of local renters grow from 10 per cent to 40 per cent in the second half of last year. She said moving out has given her the opportunity to decide how she wants to run her life, and the time to learn how to do it. "Even simple things like figuring out my own meals every day contributes to a sense of independence," she said.

Media reports have pointed to this trend.

The Business Times last month published "Renting can be a viable alternative to owning a private home in Singapore", which concluded that owning a home is not necessarily superior to renting in financial outcomes, if the renter put money meant for buying a home into real estate investment trusts.

Renting even had its day in Parliament recently. Workers' Party MP Louis Chua called for a subsidised and expanded public rental scheme that would better support the needs of millennials and cater to the growing class of gig economy workers. He argued that there is a "severe shortage" of rental flats, contributing to a lack of diversity in housing options. There were 1.019 million HDB flats sold in Singapore as at March this year, but only 63,773 rental units available.

In response, Senior Minister of State for National Development Sim Ann said extending public housing rentals to the mainstream will change social norms and could weaken communities. "It will reshape our social norms and could weaken our communities, because unlike home ownership, where people sink their roots, rentals are more transitory. This is not something we will embark on lightly without deep consideration," she said.

While I understand the importance and legacy of home ownership in Singapore's nation building effort, I also think there is merit in offering more Housing Board flats for rent and that this idea deserves deep consideration.

As Mr Chua has argued, providing more rental flats can destigmatise renting. Rental offerings without an income floor or ceiling would promote social equality and mixing. Renting also frees up financial capital for entrepreneurship, as he said.

It would help combat rental racism from private landlords, for a start. It would also widen housing options for marginalised groups such as single mums with kids and the queer community, who include young people forced to rent due to parental conflict.

In fact, providing more flats for rent can be a good way to build community. The idea that renters value community may sound contradictory to Singaporeans used to the idea of home ownership as something that anchors people to the country, and see renting as the a resort.

But a look at the popularity of co-working and co-living trends worldwide highlights how viable it is for renters to build community.

Co-living operators often organise social and networking events and living amid such activity is part of the appeal of renting a place from such groups. The experience of students who form strong bonds when thrown together in shared quarters is another example.

There are also studies on how clustering or co-locating like-minded people or companies can cross-pollinate ideas and create synergies. Just look at the pull that areas such as Silicon Valley in America has had on tech talent, Singapore's own Block 71 Ayer Rajah, and the incubator culture spawned by clustering people and start-ups.

Could co-locating young people in rental estates similarly strengthen the community?

I asked some friends what they would do if there were fewer barriers to young people moving into estates en masse. They said it would give them room to do small things together, like making music, watching movies, and having the space to grow their own plants. One friend remarked mischievously: Wouldn't having large groups of young singles living and working together also help solve Singapore's problem with birth rates?

Whether or not those laudable objectives can be met, I think creating clusters of rental housing to appeal to young people can work to revitalise some estates.

An HDB resident all my life, I know there is buzz aplenty in the town centres and markets, but along most of its corridors, neighbours pass one other like strangers.

HDB's latest Sample Household Survey - done in 2018 - shows that while 45.3 per cent of public housing dwellers exchange greetings daily, 77.9 per cent have never exchanged suggestions or advice. Even more startling, 47.1 per cent said they never visited one another, exchanged food or gifts on special occasions, and only 3.1 per cent said they did these things at least once a month.

HDB neighbours appear to be more acquaintances than friends. Casual conversation and greetings are not the stuff of deep community bonds that can support and enrich individual lives. This is especially pertinent for today's youth. Without the massive generationally-bonding shared experiences of mass mobilisation like in World War II, the fight for Independence, or even the early years of nation building, it is difficult to feel a sense of union and community.

Increasing the supply of rental flats in specific areas - perhaps in ageing or less popular estates - could lead to young people flocking to these places.

This would create new social hubs and grounds for new connections, community and possibly a sense of shared purpose and belonging - filling a social need that has been sorely neglected over the past two pandemic-stricken years.

But, some may ask, why not leave rental to the private sector? Surely there are enough flats, either HDB or private, available?

Leaving it to the private sector may keep rental prices too high for the average person.

Rental housing is not cheap: Even renting one room costs $700 to $1,500; sharing a flat requires about $1,000 per person. This is out of reach for most except graduates in well-paying jobs.

Providing more rental housing can help bring the costs down.

But how can such rental housing be provided?

I am not arguing for the Government to subsidise a dream and cater to youth who feel this way. I am merely proposing nurturing a housing environment which can let youth communities develop naturally.

Any increase in rental flats can come slowly. Priority should continue to go to those in the low-income group who need subsidised housing - as in the current system, and for applicants who have been waiting for many months or even years for their Build-To-Order flats.

But a third policy tool can be considered - slowly buying back HDB flats at market rates and renting them out at market rates, without subsidy.

These flats can be from potential sellers who want to move but cannot find a buyer, residents who are afraid of or have already seen the effects of HDB lease-decay on their nest egg, or the elderly who need to downsize or find alternative living arrangements as they age.

This increase in supply would, in theory, lead to a gradual drop in rental prices.

Normalising renting from the Government and making it possible for young singles to rent HDB flats would be consistent with HDB's history, for instance when housing policy supported single youth moving to Jurong when it was a new town, allowing them to rent.

While Singapore has "solved" the housing problem, with about 90 per cent home ownership among HDB occupants, public housing remains a work in progress as our society changes and matures.

The Government recently came up with a revised prime location public housing model, pricing flats in city areas to ensure affordability, accessibility and inclusivity. It needs to adapt to the needs of a new generation. If renting can go towards building a community, for young people before they decide to own their own homes, can it be part of the offerings available on the public housing menu? After deep consideration and consultation of course.

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