Friday 27 February 2015

[Straits Times] Allow flexibility in HDB shop rentals

THE Housing Board (HDB) should curb rising rental costs that are a result of the bidding system for commercial rental properties, in a bid to prevent "rent-pull" inflation.

The HDB electronic bidding system promotes impulse bidding, as bidders are given 10 minutes to increase their bids for the rental premises of their choice.

Keen bidders end up submitting inflated bids, which they eventually pass on to their customers.

Also, new HDB estates have a limited number of commercial spaces and these are currently allocated to a few specific types of businesses. This, too, helps to encourage aggressive bidding.

HDB should allow greater freedom in allowing the types of businesses that can lease these shop spaces, so as to increase competition and allow businesses to match demand and supply.

There are many void-deck shops in mature HDB estates that have closed down shortly after opening, due to the restrictions in the types of trade allowed, and the setting of minimum bids.

HDB should follow the National Environment Agency's lead and abolish minimum bids for the renting of commercial spaces.

This may help lower bids and help defray operational costs, which will ultimately benefit the consumers.

Heng Mok Koon