HOUSING AND DEVELOPMENT BOARD ESTATES (Selective En-bloc Redevelopment Scheme)

Mr Chng Hee Kok asked the Minister for National Development whether the Selective En-bloc Redevelopment Scheme is dependent on the level of support in selected estates.

Mr Lim Hng Kiang: Mr Speaker, Sir, the Selective En-bloc Redevelopment Scheme, or SERS, is implemented in sites where the current land use is sub-optimal, and the potential for redevelopment is high.

It is therefore not dependent on the level of support shown but on whether the site itself meets the above criteria as identified by HDB.

Mr Chng Hee Kok: Sir, going by the reports on Boon Tiong which was selected for this scheme, it seems that the Government is under-selling itself in the process. Some outsiders feel that the scheme is rather generous but the news reports indicate otherwise. Will the Minister like to comment on that, Sir?

Mr Lim Hng Kiang: When we redevelop a site under SERS, there are benefits that will be recovered. The redevelopment will provide the country with more units built on the same site. At the same time, we are able to share these benefits with the existing owners of the flats. Let us say, for example, in Boon Tiong, we are able to ensure that the owner of a 4-room flat is not only able to buy a new 4-room flat with 99-year lease, as compared to his present 4-room flat which has got 70-plus years lease, but he also ends up with a cash outlay of $30,000. So from an old flat with 70-odd years lease, he gets a brand new flat with 99 years lease in the same locality and ends up with cash of $30,000 to help him with his renovation. I think that is a fair sharing of benefits and we hope that owners who are affected by SERS will see it in this light and support the scheme.

Dr S. Vasoo (Tanjong Pagar GRC): Can I ask the Minister what is the feedback from the three areas where the scheme is to be implemented, namely, Boon Tiong, Toa Payoh and Mountbatten?

Mr Lim Hng Kiang: Mr Speaker, Sir, let me explain that Mountbatten is different. In Mountbatten, we are building new flats to encourage existing residents there, who are primarily tenants of rental flats, to buy their flats under the home ownership scheme. So Mountbatten is not under the SERS programme.

In Boon Tiong, after the first two dialogue sessions, we have managed to explain the benefits more thoroughly to the residents and we have run an informal survey. Out of the survey returns we have received so far, 75% said that they support the scheme. We are still going door to door to explain the scheme to the individuals because how they respond depend on the individual circumstances. Some want to buy a bigger flat, some want to combine with their children and others want to sell their flats to recoup the monetary benefits. So there are many combinations depending on the individual circumstances. It is better for us to explain the options clearly to the residents so that they can understand the scheme better. But so far, the informal survey in Boon Tiong shows that 75% are keen to participate in the scheme. Meanwhile, we are still conducting the door-to-door explanation of the scheme to the Boon Tiong residents.

In Toa Payoh, Mr Dhanabalan had two dialogue sessions with the residents affected. The feedback so far has been very encouraging. All the residents are happy to be given this opportunity to join in the SERS scheme. The singles who bought 3-room flats in Toa Payoh are a little disappointed. Although they can buy a 4-room flat in the new development they are not given the $30,000 discount. We have to explain to the singles that this is a fair sharing of benefits that a family who buys a new flat enjoys a $30,000 discount but a single is allowed to buy a 4-room flat, so the benefits should be less than that enjoyed by a family. With that explanation, Mr Dhanabalan is still proceeding on a door-to-door basis to explain to the various residents. Depending on the individual circumstances, he is confident that the residents affected in Toa Payoh are fully in support of the programme.

Mr Ling How Doong (Bukit Gombak): Is it true that in Boon Tiong Road, the land acquired will ultimately be sold to private developers?

Mr Lim Hng Kiang: It all depends on the circumstances. In the case of Boon Tiong specifically, we have explained the redevelopment programme. In Boon Tiong, we will sequentially rebuild the site for HDB flats. But this does not preclude other areas where, having built enough flats to rehouse the existing residents and if there is land left over, there is no reason why we should not consider either building HDB flats or tender it out for private housing. But our undertaking to the residents there under the SERS scheme is that we understand their wishes to continue living in the area and we would try to build enough flats to meet their needs. Once that is met, then it does not make very much difference whether we continue to build more HDB flats or we sell the land for private housing. The net result is we get more flats in the very prime and very attractive areas for all Singaporeans.

Mr Ling How Doong: Does the Minister not think that if the intention of the Government to acquire the property is to ultimately dispose it to the private developers, then the compensation should be more than what it is paying them now?

Mr Lim Hng Kiang: It does not necessarily follow because when we sell a piece of land to private developers and the density is lower, in fact, the net return is sometimes lower than if we had built HDB flats where we can build to a higher density. The net proceeds of the land sale could be higher under the HDB programme or it could be lower under the private housing programme. It depends on the density and location.

Mr Chng Hee Kok: Will the Minister confirm that not all the land in HDB estates belong to the residents? They only have a right to use the land.

Mr Lim Hng Kiang: Now we are getting into the nitty-gritty. For example, in Boon Tiong, there is a misconception that there is a lot of money to be made when Government acquires the flats and redevelop the site. As we had tried to explain to the residents of Boon Tiong, if they look at the redevelopment of the site, the first redevelopment is on an old school. That is state land. That land does not belong to the HDB residents. To start the programme, we have to build flats to rehouse them. The first lot of flats are built on current state land.

Secondly, there is another strip of vacant land between the Boon Tiong blocks of flats and the Bukit Ho Swee blocks of flats. That is currently state land. We could have gone in and build more HDB flats. When they read the newspaper report that there is a net increase of so many units, they were under the impression that this arose out of the redevelopment of their sites and we had to explain to them that this was not so. In fact, the net increase includes sites which are currently state land, the old school as well as the vacant land north of the existing site.

Mr Chng Hee Kok's point that the residents do not own the land is a legal point, ie, right now the common properties are still the properties of HDB. So the residents only have ownership of the title to the units which they live in, but not the common property. That is why it is not possible for us to let the residents negotiate with the private developer to redevelop the site. The land technically still belongs to HDB. But we are not pursuing that technical and legal point. Basically, we want to tell residents affected by SERS that there are redevelopment benefits that accrue to the country at large. At the same time, to be fair, we have designed a package in which they share in the redevelopment benefits. The simple way to look at the sharing of the redevelopment benefits is if you own a old 4-room flat today, under SERS, you will get a brand new 4-room flat with 99 years lease plus $30,000 cash. That I think is a fair compensation.

Dr Vasoo: Sir, what steps would the Ministry be taking to help older senior citizens who have very little savings to take advantage of the scheme?

Mr Lim Hng Kiang: Again, there is this myth of older Singaporeans who cannot take advantage of this scheme and would be left out. Let me assure Members that older Singaporeans are as shrewd as younger Singaporeans and they know how to benefit from the scheme by combining with their children to buy the biggest flat available. There is a danger here - I must explain to the House - when we carried out the surveys we asked each and every resident what type of flat they hoped to purchase in the end. If they indicate that they cannot afford it and they only want to buy a 4-room flat, then we will build more 4-room flats than 5-room flats. But in the end, you may find that the 5-room flats give them more returns than a 4-room flat. And if they do not fill up the survey form accurately, they may find that there are not enough 5-room flats to go round. So there is this myth that senior citizens may not be able to afford it. Many of them are, in fact, planning to combine with their children to buy a bigger flat. They have lived with their children in the housing estate in which their children have grown up. This is a development that we would like to encourage. I am confident that when the project is completed, they will find that it is a worthwhile project for them to participate in.

Dr Vasoo: Sir, if there are cases of senior citizens who really cannot afford it, are there any plans to help them to remain within the area?

Mr Lim Hng Kiang: If indeed a senior citizen says that he cannot afford to buy a new flat, HDB will help him buy a 3-room flat in the same vicinity and let him enjoy some of the monetary benefits of selling the rights to a new flat in that area. So we assure all senior citizens that if they just want to continue living in a 3-room flat in the same area, they will still end up with a net cash surplus, and HDB will help them buy another 3-room flat in the area. So there is no problem. But if they say that they cannot afford to buy a 5-room flat, then there is a problem. But if they say, "Look, I am staying in a 3-room flat today, and I am prepared to stay in another 3-room flat in the same vicinity.", HDB is prepared to help them buy a 3-room flat from the resale market. I can assure Members that by selling off the benefits of a brand new flat in the same area, they will still end up with a cash surplus.