The Selective En bloc Redevelopment Scheme (Sers), which was introduced in 1995, may well have served its purpose.
It is time for the scheme to be reviewed and, perhaps, discontinued (Buyers who pay high prices for old flats face reality check; March 29).
Sers was launched against the backdrop of a rising property market, when it was economically justifiable for the Government to demolish old flats on sites that were not well utilised, so that the land could be freed to develop property that could, in turn, generate a good revenue for the state.
In such a favourable economic environment, it made sense for the state to compensate affected Housing Board residents with market-rate valuations for their old flats that could adequately cover the cost of replacement flats.
The windfall for residents was, of course, the fresh 99-year lease that came with the replacement flat.
Today, the property market is no longer viewed as having the same growth potential as it did in the past.
My concern is that the Sers could become politicised and that voters may pressure politicians to have their HDB flats selected for redevelopment, even though it is not economically justifiable for the state to do so.
Eventually, if the state becomes overburdened by the cost of providing new leases to the population for free, it would either lead to much higher taxes or, worse, a failed state.
I would speculate that if the Government were to discontinue Sers, it would send a much-needed correction to the mature-estate HDB market, which seems to be based on a flawed premise that a 99-year lease can last longer than its stated period.
Discontinuing Sers will also send a clear message to property buyers that they will not be bailed out for paying inflated prices on leases that have a short remaining duration.
Chan Yeow Chuan