SINGAPORE — A freshly proposed Voluntary Early Redevelopment Scheme (Vers) will allow more owners of Housing and Development Board (HDB) flats to redevelop their ageing properties before their leases expire.

Calling it a "necessary" scheme that is scheduled to take effect 20 years later, Prime Minister Lee Hsien Loong explained that the Government has "good reason to take back more flats and redevelop them as they grow older" before their 99-year lease is up. It is part of HDB's long-term plan to renew older housing estates in an "orderly way" — carrying out redevelopment projects over a longer period of time.

In his National Day Rally speech on Sunday (Aug 19), PM Lee recalled that older housing estates and towns built in the 1970s and 1980s were constructed in a "tremendous rush" due to a housing shortage.

For example, the Marine Parade housing estate was built within three years from 1974 to 1976, while Ang Mo Kio and Bedok new towns were developed from 1975 to 1981 and completed between six and seven years.

Without any planning, all the leases in these HDB towns will expire around the same time. "All the flats will be returned to the state within a few years. We will have to find new homes for a lot of people at once," Mr Lee said.

HDB will have to tear down and rebuild flats "in a hurry" as a huge number of residents will have to be relocated around the same time period and these precincts will end up as construction sites.

"I don't think this is a good idea," Mr Lee said. "We should redevelop our old towns over 20 to 30 years, rather than within four to five years. … Better to start earlier, spread out the redevelopment, and do things in a more measured and considered way."

This means starting when the oldest flats reach about 70 years old onwards, he added.

This new scheme will be rolled out 20 years from now because the authorities "need time to work out how to select the precincts, how to pace the redevelopments out", as well as the specific terms of the Government's offer, Mr Lee said.

They will also need to study "how to afford" Vers for the long term.

With this progressive renewal of HDB estates and communities, there will hopefully be more younger residents moving into these neighbourhood, making them more vibrant.

"Those moving out will have somewhere to go to, and those staying will have rejuvenation to look forward to," Mr Lee said.

LOWER COMPENSATION FOR VOLUNTARY SCHEME

Under Vers, the terms of compensation to flat owners will be less generous than those for the Selective En bloc Redevelopment Scheme (Sers), because there will be less "financial upside" in going through with it.

The key is really the "social merit and community merit", Mr Lee added.

Sers, he reminded the audience, is a "very limited scheme" because it is meant only for HDB precincts with a high development value that the Government can "unlock".

With Sers, flats are demolished to facilitate future development, and homeowners are given compensation and the option to relocate to other public flats.

HDB estimates that only around 5 per cent of flats are suitable for Sers. There will be a few more Sers projects to come, but many projects with high redevelopment potential have already been done, Mr Lee noted.

Unlike Sers, which is decided by the HDB and residents don't get to vote, Vers will be open to voting.

HDB flat owners get to decide if they want the authorities to take back their apartments for redevelopment at the 70-year mark of their lease.

If they vote to go ahead, the Government will buy back their blocks of flats to redevelop the precinct and the owners may use the sale proceeds to pay for another flat. Otherwise, they continue to live in their homes until the lease runs out.

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