SINGAPORE – Singapore’s Ethnic Integration Policy (EIP) was in the spotlight on Aug 1, after a correction order was issued to a property agent for making false and misleading statements about the policy, which sets quotas for flats owned by each racial group in a neighbourhood.

The ERA property agent, Mr Shaik Amar, had suggested in an eight-minute video put up on social media that the EIP is unfair, as flat owners from minority races would likely have to provide steep discounts to sell their flats when EIP limits are reached.

The Ministry of National Development (MND) said, among other things, that it was misleading to focus on the point of resale without setting out that flats such as his were obtained within the EIP framework in the first place.

The Straits Times looks at the rationale for the 35-year-old policy, and how the EIP has evolved over the years.

What is the purpose of the EIP?

The EIP, which took effect on March 1, 1989, prevents ethnic enclaves from forming in HDB estates by setting a limit on the number of households of each race within each neighbourhood and block.

It was introduced at a time when communal clustering was growing, as the HDB resale market became more active in the 1980s.

While the Government had been able to achieve a fairly balanced racial mix across new towns and estates through resettlement and its public housing programme in the 1960s and 1970s, there were “disturbing” trends towards separate communal enclaves, said then Minister for National Development S. Dhanabalan.

For instance, Malays formed more than half of applicants for resale flats in Tampines and Bedok between 1987 and 1988, while Chinese households exceeded 90 per cent in some neighbourhoods in Hougang, he said in a speech in January 1989.

Left unchecked, in another 10 to 20 years, such trends would put Singapore back to where it was before independence, and undermine efforts to foster social and racial integration, he added.

How does the EIP work?

The EIP works by setting racial quotas on flat ownership within each block and neighbourhood based on the ethnic make-up of Singapore.

The last time ethnic limits were publicly updated was in 2010. At the neighbourhood level, the quotas were 84 per cent for Chinese, 22 per cent for Malays, and 12 per cent for Indians and other ethnic minority groups. At the block level, the limits were 87 per cent for Chinese, 25 per cent for Malays, and 15 per cent for Indians and others.

The 2010 revision, made in response to Singapore’s changing demographics, raised the limits for Indians and others by 2 percentage points for both neighbourhoods and blocks. 

Currently, EIP quotas – which are updated on the first of each month – are no longer listed on HDB’s website. Instead, prospective buyers and sellers have to use an e-service to check if they are affected by the quota for the block.

The quotas apply to the allocation of new flats and rental flats, as well as resale flat transactions. 

When a limit is reached, no further allocation of flats to the ethnic group will be allowed.

For resale transactions, this means a sale can only go through if the seller and the buyer belong to the same ethnic group. This ensures that the sale would not further increase the proportion of the ethnic group that is already at the limit in the neighbourhood or block.

Minister for National Development Desmond Lee told Parliament in July 2021 that the EIP “causes pain” to both the majority Chinese community, as well as minorities.

For instance, he cited cases where prospective Chinese home buyers in popular locations such as Bishan and Ang Mo Kio balloted successfully, but were told at the point of flat selection that the Chinese EIP limit had been hit and the flat would go to a buyer from a minority race.