Two groups offer proposals for solutions to public housing issues
A policy proposal for a one-time automatic lease top-up for ageing Housing Board flats may immediately tackle the issue of declining value once the leases of these flats are up, but it comes with long-term drawbacks, observers said.
Topping up the leases of all HDB flats owned by Singapore citizens back to 99 years once they are 50 years old would be "a handout that is extremely hard to stop", cautioned ERA Realty head of research and consultancy Nicholas Mak.
He was commenting on a proposal by property consultant Ku Swee Yong, veteran architect Tay Kheng Soon and economist Yeoh Lam Keong at a public forum held at Singapore Management University on Nov 30.
An automatic lease extension was one of several policies the trio introduced in what they termed a "citizen's non-partisan policy proposal" to offer solutions to public housing issues.
Mr Mak noted that such a policy would have to run in perpetuity as issues could arise if it is ever scrapped. For example, if the Government decided to stop the automatic lease extension in 2021, home owners who bought an HDB flat in 2020 would get a 149-year lease, while those who did so in 2021 would get a 99-year lease.
"Can you imagine the level of unhappiness among the later buyers? The extension is just kicking the can down the road," said Mr Mak.
The trio had also proposed that all new Build-To-Order (BTO) flats be sold to first-time buyers at around construction cost, with the current five-year minimum occupancy period increased to 15 years.
Economist and Nominated MP Walter Theseira, however, said this deviates from the "status quo" of Singapore's home ownership model, where owners hope to make a profit when they sell their flats.
The effect of the proposed model could, in the long run, bring the value of HDB flats down to construction cost pricing, he noted. This would affect those counting on their flats as retirement assets.
About 80 per cent of Singapore households live in HDB flats.
In a separate report released on Nov 29, the Workers' Party (WP) had proposed a Universal Sale and Lease Back scheme for all HDB home owners who have completed the minimum occupancy period and paid off at least 80 per cent of their loans.
This would make the HDB the "buyer of last resort" for those who may not be able to sell their properties.
Flats bought by the Government can then be resold either with shorter leases or offered under a proposed Public Rental Market scheme.
The WP had also proposed an alternative scheme to the current Selective En bloc Redevelopment Scheme (Sers), called Sers Plus, where the Government need not secure a replacement site before launching Sers.
Sers is typically offered to HDB blocks in sites with high redevelopment potential, with around 4 per cent of flats identified for the scheme since it was launched in 1995. Under the proposed Sers Plus, affected residents would be guaranteed new flats elsewhere.
Minister for National Development Lawrence Wong responded in a blog post yesterday that the Government will consider all alternative suggestions and ways to manage the expiring leases of HDB flats.
Mr Wong said: "(His ministry) will consider all such feedback and ideas, and study them in greater detail."