Singapore drops mandatory budget meal rule at HDB coffee shops, offers rent perks to operators who opt in

SINGAPORE, Jan 10 — The Housing Development Board (HDB) coffee shops will no longer be required to provide budget meals under revised rules intended to keep the scheme sustainable for operators and stallholders.

In a report by CNA, HDB said in a statement today that operators may now choose whether to take part in the scheme in exchange for rental or Temporary Occupation Licence (TOL) fee discounts.

HDB said operators and stallholders had flagged concerns about the initiative’s sustainability, noting “rising costs and low take-up rates.”

It added that the adjustments would help maintain affordable options for residents while ensuring the scheme remains workable for businesses.

Existing rental coffee shops will not need to continue offering budget meals when renewing their tenancies, and privately owned HDB coffee shops may opt out immediately.

HDB has also streamlined the budget meal requirements, replacing the previous two to six item range with three fixed meal options, while keeping the requirement for two budget drinks.

Budget meals are typically priced at S$3.50 (RM11) and below, and drinks at S$1.20 and below.

The scheme was first introduced in 2018 at newly tendered HDB coffee shops under the Price Quality Method framework and was later extended to rental and privately owned HDB coffee shops.

As at December 31 last year, 350 rental coffee shops and 48 privately owned coffee shops were offering budget meals.

HDB said the initiative differs from the National Environment Agency’s requirements at socially conscious enterprise hawker centres, where each stall must offer at least one value meal.

HDB noted that residents had reported uneven quality and inconsistent portions for budget meals, while in 2023, operators told CNA that they faced difficulties offering such meals as they grappled with rising operating costs.

In October 2024, CNA TODAY reported that none of the 40 budget meals assessed met Health Promotion Board recommendations.

From January 10, all operators offering budget meals must provide three options: an economy rice meal with one meat and two vegetables, a Halal meal and a breakfast item.

HDB said the standardised scope and additional support would help improve consistency in meal quality.

Previously, rental coffee shop operators received a 5 per cent rental discount for one year if they offered budget meals.

Under the revised scheme, the 5 per cent discount will apply throughout the full three-year tenancy term.

The discount will apply to newly let and existing rental coffee shops that choose to offer budget meals.

Rental coffee shops already offering budget meals will automatically receive the discount for the remainder of their tenancy.

Privately owned coffee shops will now be eligible for a discount on their Temporary Occupation Licence fee for outdoor refreshment areas.

This discount is equivalent to 5 per cent of the assessed market rent over three years, capped at 100 per cent of the fee.

HDB said operators must pass the discount in full to stallholders providing budget meals.

It said operators must sign a letter of undertaking and declare how the discount is shared among participating stallholders.

HDB added that it may claw back discounts if operators fail to distribute them fully.

It said the number of coffee shops offering budget meals will not change suddenly, as most operators are not due for tenancy renewal.

HDB said the increased funding support is expected to “encourage operators to participate in the scheme and offer budget meals on a sustainable basis.”

It added that low-income households needing help with cooked food may turn to community support such as meal vouchers and free meal programmes.

HDB will also begin collecting data on stall rents charged by operators to improve transparency.

It said rental coffee shop rents have remained stable over the past three years, with 90 per cent seeing no rent increases.

HDB noted concerns that some operators may impose high mark-ups on stallholders despite stable rents paid to HDB.

It will assess how the collected rent data can be made publicly available.

HDB will also require successful bidders of new shop tenders to maintain their tendered rent for two tenancy terms, or six years.

It said this requirement applies to all newly tendered HDB shops and aims to encourage prudent bidding.