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17 Jul 2019
Out of the box
Suggestion View - 135
Set a cap on hawker stall rental

The government prefers the rental for hawker stalls to be set by the market. That is why they allowed the stalls to be sold to the stall holders or allow a master operator to tender for the food court or hawker center and to lease out the stalls to the operators.

This has led to an unfortunate outcome. The rentals have gone up too high, to a point where many stall operators cannot make a living, in spite of working very long hours. 

If the stall is let out at a modest rental, there is the risk that the stall holder will sub-lease the stall to the actual operator for a higher rate and keep the margin. This is call "rent seeking".

To stop this practice, the government has set a requirement that sub-leasing is not allowed. However, they found it difficult to enforce the requirement.

What can be done?

Here are some of my ideas:

a) Build adequate hawker stalls, so that there will be no scarcity. The oversupply will ultimately keep the rentals at modest levels.

b) The hawker stalls are a good way to keep the cost of living low, and also to provide work for the stall holders and their assistants.

c) There is no need for anyone to sub-lease a stall at a higher price, if they can rent directly for a modest rental.

d) The good hawkers will earn a higher income, due to their capability, However, the over capacity and competition will not allow these hawkers to make too much profit.

e) The normal hawker will earn a moderate income, but it should be a good way for them to make a modest living.

In summary, the solution is to have a somewhat over capacity of hawker stalls. It is the best way to keep the rentals at a modest level.

Tan Kin Lian

Vote - do you agree with the suggestion to build more hawker stalls to keep the rentals low?

 


Agree: 4  Disagree: 1  Vote  Comment (0)

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