The Ethnic Integration Policy (EIP) (or HDB quota) has been brought up in parliament repeatedly. In July 2021, members of the parliament provided their views on why the EIP should and shouldn't be abolished.
Most recently, on 8 March 2022, the Singapore government has announced it will buy back HDB flats from eligible owners affected by the EIP, on a case-by-case basis. The policy targets EIP-affected homeowners who have encountered "genuine difficulties selling their flats due to constraints they face under the EIP".
These HDB flat owners need to have "owned the flat for at least 10 years and made regular, genuine attempts over a period of six months to sell their flat at a reasonable asking price on the open market."
Let’s have a look at the current racial policies in the public and private housing sectors, as well as, we're going to talk about how the policy affects you as a buyer and seller.
Ethnic Integration Policy (EIP) for HDB Flats
Some of Singapore’s housing policies have ignited impassioned discussions, and the EIP imposed by the HDB is no exception.
What is the Ethnic Integration Policy (EIP)?
Introduced in 1989, the EIP aims to maintain balanced proportions of ethnic groups in HDB estates and to stop racial enclaves from forming.
In the 60s and 70s, the government had undertaken mass resettling exercises, taking pains to ensure an even distribution of races. But by the 80s, this was no longer possible, since much of the land had already been developed into occupied residential estates. The EIP was thus put in place to counter the formation of ethnic enclaves during a time when certain neighbourhoods were starting to be dominated by one ethnicity or another.
The EIP places limits on the total percentage of a block or neighbourhood that can be occupied by a certain ethnicity. Once the racial quota for a certain ethnicity has been reached, you may not sell a flat to someone of that ethnicity, unless you and the seller happen to be of the same ethnicity (since this would not change the ethnic proportions of the block or neighbourhood).
In addition to the EIP, buyers and sellers are also beholden to the SPR quota, which places a limit on the number of non-Malaysian Permanent Resident households in a particular block or neighbourhood.
How Does the Ethnic Integration Policy (EIP) Affect You?
EIP for HDB Resale Flats
If you are a Singapore citizen or Malaysian PR buying a resale flat from someone of the same race, you do not have to worry about the EIP or HDB quota, as the transaction would not change the racial makeup of the neighbourhood.
For all other transactions, you will only be allowed to buy the flat if the quota for your race has not been exceeded. On HDB’s site, you can check if you are eligible to buy an HDB resale flat in a particular block or neighbourhood under the EIP and SPR quota.
The HDB updates the ethnic proportions and SPR quota on the first of every month based on all completed resale applications received in the preceding month. So, if you are unsuccessful and the seller has not yet found another buyer, you can try your luck in the following month.
SPR quota for Non-Malaysian SPRs:
What about multi-ethnic households? You’re in luck, as you can choose which ethnic group you wish to be classified under based on the ethnic group of any of the prospective owners or spouses. The ethnic group you choose must be indicated as the race on one of your NRICs.
EIP for BTO and new HDB Flats
For BTO or new HDB flats, the government will automatically allocate units according to the EIP or HDB quota during the balloting process, so no action is required on your part.
Can you appeal for EIP?
What about sellers who are finding it hard to sell their flat due to the EIP? The government may offer more leeway to such sellers on a case-by-case basis, such as by granting more time to those who have already bought a new flat but are having trouble selling their existing one due to the EIP.
Racial Policies for Private Housing (Condos, Landed Property, etc)
At the moment, there are no ethnic quotas being imposed on the private property market, so you are free to buy and sell private property to and from people of any ethnicity.
However, non-Singapore citizens are not allowed to buy landed property without first obtaining approval from the Land Dealings Approval Unit, which assesses each application on a case-by-case basis.
The government has been asked about the possibility of imposing ethnic quotas on private housing estates in order to boost social cohesion. However, Minister National Development Lawrence Wong said in January 2020 that they had no plans to do so as it would have implications on the property market and would also be difficult to implement, especially as the proportion of foreigners tends to be higher in private estates.
Furthermore, as non-PR foreigners are not allowed to purchase HDB flats, imposing restrictions on private property might make it difficult for them to find suitable housing and affect Singapore’s competitiveness as a global talent hub.
What About Racial Eligibility in the Rental Market?
If you follow this subject in Singapore, you’ll know that most regrettably, there have been reports of racial discrimination being practised by landlords on the housing market. There are many rental ads that state a racial preference, usually for Singaporean Chinese tenants. This makes it much harder for the minority races like Malays and Indians to find homes.
Unfortunately, although publishing discriminatory property listings of the sort is highly discouraged, it is not illegal.
These days, landlords posting such ads are increasingly aware that such discriminatory language could turn off potential tenants who may not wish to rent from someone they see as unsavoury. However, while agents and landlords are now a little more circumspect with how they word their ads, that does not mean that discrimination is no longer happening.
The reality is that certain landlords will still refuse to rent to Indian and Malay Singaporeans or foreigners of certain nationalities, most commonly those from India and Mainland China. In the current property market, overtly racist ads might no longer be used by the majority of landlords, but discriminatory renting practices are still rampant enough that they can raise rents palpably for those who are affected.
What can you do if you spot property rental ads displaying discriminatory language online? Your best bet is to report the ad to the website publishing it and urge them to have the offending ad modified or removed.
What is PropertyGuru Doing to Discourage Racism?
Since 2017, PropertyGuru has maintained a keyword detection feature that identifies racially discriminatory wording on listings and requires the poster to remove it before being able to post a listing.
Of course, it is impossible to be foolproof. But by lowering the number of discriminatory rental ads in this way, we hope to make a tiny contribution towards building a more inclusive society that celebrates diversity.
More FAQs about HDB Ethnic Quota
What is the HDB Ethnic Quota?
Introduced in 1989, the Ethnic Integration Policy (EIP) or HDB ethnic quota, aims to maintain balanced proportions of ethnic groups in HDB estates and to stop racial enclaves from forming. Under the EIP, each HDB block and neighbourhood has a specific quota for each racial group.
Does HDB Change the Ethnic Quota?
Yes. HDB updates the ethnic quota and SPR quota on the first of every month based on all completed resale applications received in the previous month.
What is the SPR Quota?
The SPR Quota is a quota set to Non-Malaysian SPR families looking to buy a resale flat in an HDB block or neighbourhood to ensure that SPR households can integrate with the local community. Currently, the limit is 5% for HDB neighbourhoods and 8% for HDB blocks.
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This article was written by Joanne Poh. A former real estate lawyer, she writes about property and personal finance and spends her free time compulsively learning languages and roller skating in carparks.