HDB create the problem, then say try to solve it?

December 15, 2015

Shorter leases to help rental households buy flats 

I refer to the article “Shorter leases among options mooted to help rental households buy flats” (Channel NewsAsia, Dec 15).

New housing grant, 2nd loan

It states that “A new housing grant will help these second-timer families by reducing the amount they need to pay, while a second HDB concessionary loan will help those unable to get mortgage loans. Under the scheme, 2-room Flexi flats – currently only available to the elderly – may be offered on shorter leases to make them more affordable”.

Rentees’ problems caused by HDB policy changes?

The plight that most HDB renters may be in, in regard to their difficulty in buying a HDB flat, may arguably have been caused by the HDB itself – by its policy changes over the years.
2nd loan without conditions?

For example, as to the second HDB concessionary loan – the HDB should go back to its original policy of giving a second loan without the onerous conditions of requiring half the cash profits and all the CPF used plus accrued interest from the previous flat sale.

Affordable prices don’t need grants & shorter leases?

With regard to grants and flexi shorter leases to make the flats more affordable – we should go back to the original policy of not making huge profits by disclosing the construction and land costs, and not charging land at market rates.

HDB costs and prices in 1965?

In this connection, ES sent me the following from hansard on HDB costs in 1965:-

“NATIONAL DEVELOPMENTHousing

The First Five-Year Housing Programme (1961-1965), produced 51 ,000 units of low-cost housing at the cost of $192 million. Together with 23,000 units built by former governments, they now house 400,000 persons or 23 per cent of Singapore’s population of 1.8 million. Under “Home Ownership for the People” Plan, 2,068 units at Queenstown have been sold to the public on instalment payments. Another 1,416 units at MacPherson Estate are being made available.
 
The Second Five-Year Housing Programme (1966-1970) aims to produce 60,000 units of low-cost housing in urban renewal and suburban areas at a cost of $268 million – output target 12,000 units a year. The number of units for sale under the Home Ownership Scheme to meet increasing demand will be decided upon.

The main construction activity will be concentrated in Toa Payoh, the new Satellite Town. It is an area of 620 acres of which 100 acres have already been cleared and construction on 3,500 units of housing commenced. Toa Payoh will ultimately provide 36,000 residential flats and shops for an expected population of � million people. It is estimated to cost $150 million when completed by 1970.

Land Reclamation

Earth from Toa Payoh has been used to reclaim the swamp at the Kallang Basin. Eventually 400 acres of swamp land will be reclaimed and used for developing into an industrial estate for light industries. The cost of this development is estimated to be $28.5 million and the reclamation work is expected to be completed by 1969.

Another major reclamation project is the recovery of 1,000 acres of land from the sea on a strip along the east coast six miles long extending from Bedok to Tanjong Rhu. A coastal highway is proposed which will link the town centre with the eastern suburbs. The cost of reclamation alone is estimated to be $53 million. The removal of earth from the landward side will result in the preparation of some 600 acres of land for development.”

No resale levy?

Also, the HDB should go back to its original policy of not charging a resale levy of up to $50,000 on the purchase of a second flat.
Shorter term leases are expensive? 
At the end of the day, it may be the HDB that makes even more profits – looking at the prices of the flexi short-term lease flats.
Create the problem, then say try to solve it?
The HDB should not in a sense, create the problem and then say that it shall try to help to solve the problem which it created itself, in the first place.
Leong Sze Hian
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About the Author

Leong
Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.