NEA clarifies viral post about 'almost 40%' hawker stall rent increase, says increment not more than S$300

NEA said that it was misleading to only look at percentage increases, as the previous rent could have been as low as 'a few hundred dollars, or even S$1'.

Nigel Chua | June 26, 2021, 03:19 PM

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A viral Facebook post by Makansutra founder KF Seetoh sought to highlight the contrast between those trying to support hawkers amid Covid-19 on one hand, and the National Environment Agency (NEA) raising rental rates on the other.

In his post on Jun. 25, Seetoh shared a photo of a letter from NEA to a hawker with the hawker's details redacted.

The letter offered the hawker a renewal of their tenancy, and set out the terms of the renewal, including the revised rent to be paid to NEA, among other charges such as cleaning fees.

Seetoh said that the revised rate of rent was "almost 40 per cent" higher than before.

Seetoh wrote that the letter had been sent recently, and said that while "the national coffers" might need topping up, "it's a horrible timing to do so now."

While the date of the letter was also redacted, the year in which the revised charges would apply is visible as "2021".

Seetoh also made reference to the current constraints that hawkers faced, such as the resumption of dining in for a maximum of two persons per group, instead of five as initially expected.

He said that these constraints, and the fact that "professional valuers" had decided to "decree that rents must be raised now", sounded "another death knell for the #supportourhawkers movement."

NEA: Rental rates did not increase by more than S$300 in recent years

NEA, in a Facebook post on Jun. 26, appeared to address the matter by referring to "discussion online that NEA has increased a hawker’s stall rental by a significant percentage during this period".

NEA did not identify Seetoh's post as the origin of that discussion, however.

In its post, the agency said that the rental for hawker stalls is unchanged throughout their tenancy, which is typically a three-year period.

Rental can be as low as S$1

Stallholders who obtain their stalls through NEA's monthly tender exercises could pay as low as "a few hundred dollars, or even S$1," NEA said.

At the point of renewal, however, the rental rate would be based on prevailing market rates, which could either be higher or lower than the previous rate.

"For example, if there was fierce competition for a particular stall at tender and the successful rental submitted is higher than the valuers’ market rates at renewal, the rental will fall to the market rate," said the agency.

However, NEA also shared that when rentals are increased, the agency "moderates the amount of increase" so that the rental rate would not increase to the prevailing market rate in "a large jump".

NEA said that increases in rental rates in "recent years" have not exceeded S$300, and that only looking at percentage increases was "misleading" as an increment of S$300 from a previously low rental rate would appear to be a large percentage increase.

Assuming that there indeed was a 40 per cent increase in rent, and that the increase in the rental rate was the maximum figure of S$300 cited by NEA, this means that the rent before the increase was S$750 per month.

An increase of 40 per cent from S$750 would mean that the new rental rate offered to the hawker was S$1,050.

NEA shared that the median monthly stall rental of non-subsidised cooked food stalls across all hawker centres is S$1,250, a figure which NEA said was "competitive and significantly lower" when compared to rates charged at commercially-operated coffeeshops and food courts.

NEA froze rental increases amid Covid-19

NEA also said in its post that it froze rental increases for a year from Apr. 1, 2020 to Mar. 31, 2021, "in recognition of the difficult Covid-19 period".

"In addition, NEA had provided in 2020 five months of rental waivers and three months of subsidies for table-cleaning and centralised dishwashing services to help our hawkers. Eligible hawkers further benefitted from the Self-Employed Person Income Relief of nine months," said NEA.

The agency also outlined other relief provided to hawkers in 2021 such as rental waivers and subsidies for services.

"NEA remains fully committed to supporting and promoting our hawker trade and culture," said the agency.

Top image via KF Seetoh and NEA on Facebook