NEW STRAITS TIMES. 2ND JUNE: The government should bear full responsibility for supplying affordable housing and making houses more accessible to all rakyat, as it did over 50 years ago, and as it is in many countries worldwide.
Datuk NK Tong, president of the Real Estate and Housing Developers’ Association (Rehda) Malaysia, said that this will abolish the current practise of cross-subsidies, which raise the costs of normally priced housing, making it more expensive for the M40 rakyat to afford homes.
Tong said that developers face a variety of problems as a result of the affordable housing criteria that must be met in order to build residential development in the open market.
“Many of these issues stem from the aforementioned cross-subsidy measures that developers have to undertake, in which prices of homes in the open market have to be increased so developers can build affordable housing, which is often sold below the cost of construction.
“In turn, the price increase has caused houses in the open market, targeted towards the M40, to become unaffordable. Due to this, developments that fail to attract purchasers also have an increased risk of becoming late, sick, or abandoned,” he said in a statement.
This is especially true for projects built by small developers who lack the financial resources to mitigate financial risks.
He said that this is one of the reasons Rehda has asked the government to relinquish responsibility for affordable housing construction.
Another unexpected consequence of higher regularly priced housing due to cross-subsidy is an increase in completed but unsold properties, which is often wrongly referred to as “overhang.”
Rehda’s statement follows Prime Minister Datuk Seri Anwar Ibrahim’s request yesterday for the Local Government Development Ministry to evaluate the conditions imposed for housing developers in order to ensure that affordable housing is provided for all megaprojects constructed.
“We are cognisant of and grateful for the initiatives taken by the government thus far to mitigate pressing concerns in the housing and property industry, such as the recent introduction of Skim Simen Rahmah to address the building materials price hike.
“However, much more needs to be done to ensure the recovery and sustainability of the industry for the benefit of the aspiring future homeowning rakyat,” he said.
Tong said Rehda is ready to discuss and engage the government and other industry players to find solutions to make houses more accessible for all Malaysians, including and especially the B40, in a sustainable manner.