HDB should quell misguided sentiments on leases

The focus of the Housing Board should be on providing affordable homes.

Singaporeans ought to understand that HDB flats are cheaper because the 99-year lease term allows the Government to redevelop and sell new public housing, possibly at subsidised rates, to the next generation.

The Government may encourage speculation in HDB prices by extending lease terms at no or low cost or, worse still, over-compensating HDB owners with excessive Selective En bloc Redevelopment Scheme (Sers) packages.

While I understand that the older generation may want to pass their property assets to their descendants, this should not be at the expense of the affordability of housing for the younger citizens, nor should it be done with national resources.

HDB has to make a clear stand that the residual value of a 99-year lease is zero.

Any Sers compensation should be based on what a commercial land owner will pay a long-term lessee; no more than a reasonable relocation costs and the value of the remaining lease term.

This is to ensure that Singaporeans no longer have misguided expectations of the investment returns of public housing, and that public housing remains affordable and fiscally sustainable.

Chiam Sheng Shi

A version of this article appeared in the print edition of The Straits Times on May 19, 2018, with the headline 'HDB should quell misguided sentiments on leases'. Subscribe