Wednesday September 26, 2012

Workers need houses they can afford

THE STAR SAYS

WE can expect Budget 2013 to address the issue of affordable housing. The Government can, and should, take the lead in mapping out clear policy guidelines that will enable all stakeholders to play their respective roles.

The many hints given over the past months already indicate that initiatives like My First Home Scheme and the 1Malaysia Housing Programme (PR1MA) will be given a boost.

But these initiatives will be limited in scope if builders in the private sector do not play their part.

For developers, the mantra is “location, location, location” and with their eye on the bottom line, they are savvy enough to pick up choice locations to appeal to the upper band of housebuyers.

This is the reason why even the tiniest available spots in densely-populated areas can spring to life, and be sold at a premium.

To be fair, affordable housing is available but often in locations that are not particularly attractive to those who have to work in the major urban areas, estimated at some 70% of the working population.

The Government has a splendid track record when it comes to providing low-cost housing to the needy while private developers are laughing all the way to the bank in providing premium housing to those with deep pockets.

But those in the middle class are neither here nor there. They need affordable housing, but they certainly do not want to be living somewhere in the boondocks and spend even more commuting to and from work.

Furthermore, the increasing number of high-end development has resulted in speculation on prices that have driven even second-hand properties in certain locations to stratospheric heights.

Developers called to do their part often lament the high cost of land and other extras and claim they have no choice but to pass the buck to the buyers.

They want government land to be freed for affordable housing as well as exemption from having to fork out capital for utilities infrastructure like reservoirs and power sub-stations.

The argument is that when developers have to fork out capital expenditure for infrastructure, invariably consumers will have to pay for it.

Supporting infrastructure like roads and utilities may be something that can be worked out between the authorities and the developers, but we must be extra careful about how prime government land, especially those in the urban centres, is freed up.

Social responsibility is not something that profit-driven businesses naturally embrace.

If we are not careful, land given away for a song may well result in premium development beyond the reach of many, for the benefit of a few.

One developer recently suggested that if the Government releases such land for development, he could set aside 75% for affordable houses while the remaining 25% could be for other residential types. The suggestion sounds reasonable, but the actual realisation of such a plan may turn out otherwise.

Let us not forget that many developers are already required to fulfil certain objectives in providing for different forms of housing within the same development plan. But often, when the premium portion takes priority, the lower-end development is conveniently moved to another area.

Herein lies the dilemma. How can all the stakeholders work together to ensure that affordable housing is a priority and not an afterthought?

The Government may, perhaps, have to resort to a carrot-and-stick approach. We look forward to what's in store for us when Budget 2013 is unveiled this Friday.

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