Penang Rehda questions reliability of state government’s register of affordable home buyers

GEORGE TOWN (Nov 4): Penang Real Estate and Housing Developers Association (Rehda) today asked the state government how much of the information on its register of applicants for affordable housing could be relied upon.

Association chairman Datuk Jerry Chan asked they were asking because some developers were having trouble selling the affordable units they were building.

"Are the people who registered with the state genuine? If they are, how is it that developers have problems selling the affordable units?

"If they are genuine but are unable to get a loan because of their financial circumstances, then we are not dealing with the real situation (by building affordable homes)," he said at a media briefing today.

Chan said such people, who needed a home and were unable to secure a loan, should not be on the register lining up for an affordable unit, but should instead be helped in a different way

He said a register that was created without checks on whether the names on it were qualified for a housing loan presented misleading figures to the developers who wished or were made to build affordable homes.

"There are so many people on the register but how many per cent of the registry is good and how much of it is unusable? When developers open the units for sale, these people (on the list) either don't turn up or can't get loans.

"If the state says there are so many people want affordable homes, then get them to turn up when the units are open for sale," he said.

Housing developers in Penang had complained that cooling measures and a high rejection rate of housing loan applications were affected sales.

In Penang, those who wished to buy an affordable home, capped at RM400,000 on the island and RM250,000 on the mainland, must register with the state Housing Department in Komtar. They can also apply for the project they want and fill up the form at the developer's office.

Chan said the state government had also to set an expiry date for the maximum price of affordable homes because development costs and charges were going up and the developers did not know how long more that could continue to sell at prices under RM300,000.

While acknowledging that the RM400,000 units were unpopular, he said people interested in a RM300,000 home should attempt to come up with the money now because the price would not remain forever.

"The current prices are not repeatable. The state has to be fair to the open market and developers. You can't have a RM25,000 attitude for 25 years. That was what happened to the low-cost houses. The price stayed at RM25,000 in the 1980s right until after 2000.

"There has to be a deadline. It cannot be open-ended forever because salaries, construction and compliance and land costs go up," he said, urging the state to be pragmatic.

Penang Rehda deputy chairman Datuk Toh Chin Leong said the burden to provide affordable housing should not be on the developer or the state government, but on the tax collector.

"The party that collects tax should do it. We have all been paying income tax. The tax collector (the federal government) should be the one providing the infrastructure, including housing for the poor," he said.

Chan said Penang Rehda also opposed further requirement for affordable housing on top of the requirement for low-cost units – a new policy that the association claimed the state intended to implement.

He said the move would be too drastic at a time when developers were having cash flow issues and facing delays in getting their advertising permits and developers’ licences, construction costs were rising following the goods and services tax, and homebuyers were having trouble getting loans.

The new policy, he said, should be put on hold for now.

Chan also asked the state to grant developers a 50% discount on all charges, fees and contributions for all non 'build and sell' projects in view of the present challenging times.

He said Penang Rehda proposed that the development control based on a density of 87 units per acre be removed, so developers could build units of different sizes or layouts to cater to buyers of various financial strengths and household sizes.

The proposal, which is consistent with guidelines for mixed developments where plot ratio and floor space are used for developmental control rather than units, he said, would also lower housing costs for young professionals, newlyweds, young families and single person households.

Under Penang Rehda's proposal, the unit size would be a minimum 750sq ft. Its price would not compete with the selling prices of controlled affordable units. The association also wants the development charges for price-controlled units to be standardised at RM5 psf.

It also proposes that the provision of 30% low-medium cost units be replaced by affordable units of 750sq ft at RM150,000 per unit, and for flexibility to be given for developments in the northeast district on the island to locate their affordable housing units on alternative sites in the sourthwest district without having to first go through the state planning committee.

The association also proposed to the state to relax of lower the 3% levy on foreigners buying properties in Penang to encourage them to bring in money, settle in the state and give the local economy a boost, especially when the currency was weak.

Chan said Penang Rehda would meet state housing exco Jagdeep Singh Deo tomorrow to discuss the proposals. -- The Malaysian Insider

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