Provide more assurances about 99-year lease flats
The Singapore Land Authority announced recently that there will be no compensation for the owners of 191 terrace houses at Geylang Lorong 3 when the leases expire in 2020.
The report “Options limited as 99-year leases shorten, but homeowners not in rush to sell” (June 29) said there are 48 private developments that are more than 30 years old.
When 99-year leases shorten to less than 60 years, their property values drop.
We have a stock of over 1 million Housing and Development Board (HDB) flats, two-thirds of which will be 30 years or older by 2020.
In the 10 oldest HDB towns, such as Bukit Merah, Queenstown, Toa Payoh and Marine Parade, many flats are 40 years or older. In 20 years’ time, the value of these flats will decline sharply.
Should that trigger an islandwide fall in the market prices of old HDB flats, it may well generate a crisis. At the same time, the flats built today will give the next generation the same problem 30 to 50 years from now.
Past policymakers might not have factored in the potential crisis, which should not be allowed to swell. It could be mitigated now by initiating more assuring measures.
For example, the Selective En bloc Redevelopment Scheme and estate upgrading schemes could be made more comprehensive. More options could also be created for the Lease Buyback Scheme.
We must re-examine our public housing concept and incorporate the enhancement of old flats as an increasingly important element in the new plan.
Perhaps the Housing and Development Act needs to provide guidelines for managing this element — such as the criteria used and the means of financing enhancement programmes — to ensure that the programmes are fair, consistent, inclusive, transparent and implemented well.
Provisions for extending and shortening the tenure of public flats may be required too. With better guidelines, the HDB and banks should then revise their lending rules for older flats.