Rehousing options with shorter leases to apply to future Sers exercises after Ang Mo Kio, Marsiling cases: Desmond Lee

SINGAPORE — New rehousing options offered to Ang Mo Kio and Marsiling residents affected by the Selective En Bloc Redevelopment Scheme (Sers), which include buying a replacement flat on a shorter lease, will apply to future Sers exercises, National Development Minister Desmond Lee said. 

This is given that flats to be redeveloped in the future are likely to be older with shorter remaining leases, Mr Lee told Parliament on Monday (July 4).

Additionally, the Housing and Development Board (HDB) will consider allowing younger residents aged under 45 to buy their replacement flat on a 50-year lease on a “case-by-case basis”, Mr Lee said.

Mr Lee was responding to an adjournment motion by Ms Nadia Ahmad Samdin, Member of Parliament for Ang Mo Kio Group Representation Constituency, who conveyed some concerns held by her residents regarding the Sers exercise.

TODAY had reported last month that some affected Ang Mo Kio residents were unhappy with having to fork out up to S$100,000 for a new replacement flat of a similar size.

Last Saturday, HDB said that residents of the four HDB blocks at Ang Mo Kio Avenue 3 that have been selected for Sers will be given two new options of replacement flats with leases shorter than the usual 99 years.

They may buy a three-room or larger replacement flat on a 50-year lease, provided that the flat owners and their spouses are at least 45 years old at the point of the Sers announcement.

Alternatively flat owners aged at least 65 may sell some of the remaining lease on their existing flat back to HDB and buy a replacement flat of the same remaining lease length. 

The new options were also extended to flat owners of Blocks 212 to 218 Marsiling Crescent and Marsiling Lane whose flats were announced for acquisition on May 26 for the redevelopment and extension of Woodlands Checkpoint. 

Mr Lee said on Monday that these new options were introduced because the Government recognises the challenges faced by older residents, who may find it more important to be rehoused in a similar-sized flat nearby than to own a home with a fresh 99-year lease.

Many of the affected Ang Mo Kio residents, for instance, are seniors, with about 350 of the 606 flats owned by a resident aged 55 and older.

A large majority of these seniors either did not take a loan for their existing flat or have fully paid off their HDB loan.

“Looking ahead, the flats involved in future Sers exercises are likely to be older, with shorter remaining terms, and these needs could arise too,” he said. 

As for possibly allowing some flat owners aged under 45 to buy their replacement flat on a 50-year lease, Mr Lee said this will be allowed only if the 50-year lease will cover the youngest buyer until the age of 95 and if the buyers face extenuating circumstances.

For younger residents who wish to buy the new replacement flats on a 99-year lease or to buy resale flats but face difficulties, Mr Lee said that HDB will continue to help them in other ways if necessary, including with housing loans.

COMPENSATION CALCULATIONS NOT CHANGED: DESMOND LEE

Before the alternative lease options were offered last Saturday, several flat owners had been up in arms after learning that they may have to top up money to get a similar-sized replacement flat.

After all, they argued, they did not want to move in the first place and many seniors in particular were worried about having to dip into their retirement savings if they do not move to a smaller-sized unit.

The news had also come as a shock to some who had always thought of a flat being selected for Sers as being akin to receiving a windfall, or that past Sers exercises have usually been a “one-for-one exchange” for a replacement flat.

Mr Lee said on Monday that the approach towards calculating the compensation for the Ang Mo Kio Sers flats has not changed from past exercises and is based on the market value of the flat.

For past Sers exercises, the flats were generally younger with around 70 years of lease remaining, Mr Lee said. The market value was therefore generally sufficient for flat owners to buy a replacement flat of a similar type or size on a fresh 99-year lease.

In comparison, the flats for the Ang Mo Kio Ave 3 Sers flats are older, with about 57 years left on the lease.

“So this is the key difference here — the basis of determining the compensation for the Ang Mo Kio Sers flats is the same as past exercises,” Mr Lee said.

However, with the new option for flat owners aged 45 and above to buy a replacement flat with a 50-year lease, they should not need to top up for a replacement flat of the same type, Mr Lee said.

“Nearly all will even be able to move to a replacement flat of the same size with no top-up,” he added.

‘HDB WILL TRY ITS BEST’

In her 20-minute speech, Ms Nadia welcomed the new rehousing options announced last Saturday but said that there are still concerns left to be addressed and gaps to fill, given the different needs and circumstances of each household.

She noted that about a quarter of her residents would be required to pay a resale levy and asked if the Ministry of National Development could waive or defer the payment of the levy. 

After all, Sers is involuntary and for some of her residents, they do not have enough cash, she said. 

Some residents have expressed their hope of successfully getting a flat at the upcoming Built-To-Order (BTO) exercise in August 2022 near Ang Mo Kio Central 2 and 3. 

However, the 10 per cent priority allocation Sers residents get in BTO exercises are only for BTO flats where the delivery possession date is before that of the Sers replacement flats.

Among several other questions, Ms Nadia also asked if HDB has considered the implications of having a mix of flats with varying leases in the same estate, given that it could potentially create price distortions in the market.

“While I understand that it is improbable in policy making that every single circumstance gets accounted for, I think members of this House will agree that the goal is to strive towards making sure that homeowners do not get disadvantaged by redevelopment programmes like Sers,” she said.

Mr Lee, in his reply, acknowledged the different expectations and needs that residents have.

“For instance, some residents shared that they want to continue to live in their flats, and not make way for Sers, regardless of the benefits,” he said.

Others would like to exchange their flat with a similar-sized one with double the lease without paying for the longer lease, or want the replacement flats to be in more prime locations, he added.

“HDB will look at each of these residents’ needs and concerns, but while they will try their best, they may not be able to meet everyone’s expectations perfectly,” Mr Lee said.