Learning points from private housing market to be taken into account as VERS framework is developed

Read more at straitstimes.com. Read more at straitstimes.com. Under VERS, owners of HDB flats that are 70 years old and above will vote on whether the Government should buy back their homes before their leases run out. Set as preferred sourceSINGAPORE – The Ministry of Law will share learning points from the collective sale regime for private developments with the Ministry of National Development , even as the mechanics of the Voluntary Early Redevelopment Scheme are worked out. Speaking in Parliament on Sept 8, Law Minister Edwin Tong said that when public agencies put up programmes and bring them to the House, such as changes to the collective sale regime, or – eventually – VERS, 'it will have the support of the Government'. 'MND will talk to MinLaw. We'll share our experiences on the collective sale regime, and the learning points will be shared across the different agencies,' said Tong, who was speaking on amendments to the laws governing collective sales for private strata-titled developments. MPs He Ting Ru and Cassandra Lee and Non-Constituency MP Andre Low had noted that while collective sales andchanges to the collective sale framework could have implications for VERS. Under VERS – for which details have yet to be announced – owners of HDB flats that are 70 years old and above will vote on whether the Government should buy back their homes before their leases run out. As for the collective sale regime, Parliament on Sept 8 passed amendments to the voting threshold for such sales. The current 80 per cent voting threshold, which applies across most projects, will be lowered to 70 per cent for projects between 40 years old and 59 years old, and 65 per cent for those 60 years and older. Lee said that as buildings age, maintenance becomes more costly, repairs become more frequent, upgrading becomes harder and takes longer, and, at some point, 'redevelopment starts to make more sense than maintenance'. She said the changes to the thresholds for private strata-titled developments make use of a tiered framework for developments of different ages, and asked if the same logic should be applied to VERS. Noting that private and public housing are not identical, she added that collective sales and VERS have the same policy objective – the voluntary redevelopment of an ageing estate – and any significant difference in treatment should have a clear policy basis. Lee suggested that Singapore needs to look at the economics of ageing estates more broadly, citing programmes such as the Home Improvement Programme, Lift Upgrading Programme and Neighbourhood Renewal Programme. 'These programmes have made a real difference to residents. They remain important. But when does it come a point when we should ask a different question? ' she said. 'Not what do we need to repair, or what should we upgrade next, but when does comprehensive redevelopment make better sense? ' Meanwhile, the WP's He said the changes to the Land Titles Act have consequences from a national public policy perspective and deal with two fundamental principles: property rights and urbanisation. 'Our debate today should consider how we balance these competing interests and minimise the impact on the minority who disagree and may otherwise feel bullied into having to accept the decision of the majority,' she said. She added: 'While details of VERS are still unavailable today, I believe we should similarly think about how we balance the interests of displaced residents against the need for urban renewal, which will be especially pertinent in the case of public housing. ' She noted that the proportion of the lower-income elderly with few other housing options is likely to be higher in public housing projects, adding that many flat owners 'decided to buy their flats decades ago with an eye to live in those units for the remainder of their time on earth'. The WP's Low raised concerns that in the cases of collective sales or VERS, 'a majority may favour renewal while some of the households required to move face substantial new debt or a draw on retirement savings'. 'How we address that difficulty here today will help establish what Singaporeans can expect of other renewal schemes in the future,' he said. In response, Tong said VERS goes beyond the scope of the Bill that was debated, as the collective sales concern private strata-titled developments, whereas VERS comes under the HDB, which maintains and upgrades flats through its own programmes. Having said that, Tong said, he accepts there are learning points between the private and public property markets, and that these are factors that will be taken into account in VERS.