Time to go back to the drawing board for DBSS?

By Sheena Chua

On Saturday, Minister for National Development Khaw Boon Wan took to his blog to explain to angered netizens the justification for high price of a recent Tampines DBSS launch.

In his blog, Khaw said, "DBSS is a class of housing type between HDB flats and Executive Condos (EC)/private condos," adding that DBSS units are considerably more costly than flats sold by the HDB because the former is designed and priced by private developers.

Entitled 'DBSS Is Not HDB', the blog post also saw the minister address homebuyers' calls for the MND to step in and put pressure on the developer to cut prices. In response, Khaw encouraged them to exercise their right as consumers. "If buyers find a price too high, they can walk away," he said, adding that he will be launching another 13,000 more units in 2011.

Khaw also stated that upon public advice, he would be working with HDB to combine launches (as bigger launches provide buyers with more choices) at prices significantly lower than the DBSS launch in question.

What is DBSS?
DBSS is an abbreviation for Design, Build and Sell Scheme. DBSS units are developed privately but maintained by HDB, which is why it is still considered a form of public housing.

Developers have the freedom to design, price and sell these flats the way they see fit. As such, DBSS flats are often styled like condominiums and positioned at prime locations such as mature estates. Upon completion, the development site will be handed over from the developer to HDB for lease administration, and to the Town Council for maintenance of common areas such as car parks.

Essentially, DBSS flats are HDB flats — subject to the same rules imposed on HDB flats, such as Ethnic Integration Policy and Minimum Occupation Period (MOP). For instance, flats sold under DBSS will be offered under eligibility conditions similar to that of flats developed by the HDB.

Examples of DBSS are The Peak at Toa Payoh, Parc Lumiere at Simei and Natura Loft at Bishan.

What is the difference between DBSS and condominiums?
Unlike DBSS flats, condominiums — both private and executive (ECs) — are managed by residents. The first owners are also subject to a 5-year MOP from the date of issue of the Temporary Occupation Permit. ECs are fully privatised after 10 years.

Two features of DBSS housing are Assure 3 and Universal Design.

Assure 3 is an extended warranty scheme implemented in 2005 for DBSS flats launched thereafter. It covers ceiling leakages and external water seepage for five years each, and spalling concrete for 10 years.

The universal design of DBSS flats seeks to make daily life more convenient for the elderly and disabled through the installation of ramps at main entrances, levelled floors throughout each flat, significantly wider corridors and doors and other facilities that reflect the changing need of an ageing population.

Why are people unhappy?
Khaw has mentioned that buyers can walk away from an unsatisfactory deal. What, then, does this say about the effectiveness of cooling measures meant to slow down the price hikes? Could there be a better solution for this nagging problem?

Furthermore, home seekers whose incomes fall just out of range of the $8,000 ceiling are forced to move one step higher to the next best option — DBSS flats. Because of the income ceiling, DBSS flats are often the only option for this group of buyers.

Following public outcry, Sim Lian Group — private developer of DBSS flat in question Centrale 8 in Tampines — has slashed prices by up to $102,000 where it had previously asked for as much as $880,000 for the largest five-room units. This move now prompts the question: if the developer can so readily drop prices, why weren't these units priced lower in the first place?

A popular public opinion seems to be that until eligibility rules are revised, this housing issue will remain persistent. In what looks like an echo of this sentiment, the Ministry announced today that it will include the DBSS option among other housing to be reviewed. Perhaps it is time to go back to the drawing board for these housing policies.

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