Lease Decay and Voluntary Early Redevelopment Scheme

Mr Saktiandi Supaat asked the Minister for National Development (a) whether the Government's offer to buy back HDB flats older than 70 years extends to all flats or only selected ones; (b) what will be the selection criteria for the eligible VERS precincts; and (c) what options will residents have if they fail to get VERS for their flat.

Miss Cheryl Chan Wei Ling asked the Minister for National Development (a) what are the factors considered in the planning phase for the Voluntary Early Redevelopment Scheme; and (b) whether the private developers will have a role in the redevelopment programme and, if so, can more details be shared.

Mr Speaker, over the last 50 years, Housing and Development Board (HDB) home ownership has uplifted generations of Singaporeans and given them a stake in the nation’s progress. The Government is committed to strengthening our institution of public housing and home ownership, so that it continues to bring tangible benefits to current and future generations of Singaporeans.

This is why at the recent National Day Rally, Prime Minister Lee Hsien Loong highlighted the Ministry of National Development's (MND's) plans to systematically upgrade older HDB flats through the Home Improvement Programme (HIP) and HIP II, and to progressively renew and rebuild older HDB towns through the Voluntary Early Redevelopment Scheme (VERS).

Various Members have asked about the details of VERS. VERS will be launched in about 20 years’ time to pace out the redevelopment of our older towns. Some of our older housing estates were built up in a hurry to meet the housing needs of Singaporeans at that time. By spreading out the redevelopment of these towns over a span of 20 to 30 years through VERS, we can avoid having to rebuild entire towns in a similar hurry, which would be highly disruptive.

This large-scale redevelopment effort is a good opportunity not only to rebuild some of our older precincts, but also to introduce new and exciting concepts of living in our newer towns into our older towns. To achieve this, we will need to carefully study how to select the precincts and stage the redevelopment, precinct by precinct, town by town.

We have already explained the broad concept of VERS and how it is different from the Selective En Bloc Redevelopment Scheme (SERS). SERS is limited to precincts where there is high development value to be unlocked. Because of the value unlocked, we share this value with residents through generous compensation, and the acquisition can be made compulsory.

In the case of VERS, we expect more flats to be eligible, as the intention is to space out the redevelopment of the town. But the compensation terms for VERS will be less generous than SERS, because we will be redeveloping land that is more built up. Hence, VERS will be offered on a voluntary basis and residents will get to vote.

We have outlined the broad concept of VERS. But there are still many details to work out, and we will need time to do so. This includes the extent of coverage of VERS and how the compensation will be computed. In particular, we will ensure that we implement VERS in a fiscally sustainable way, so that it does not become a burden for the next generation.

For residents who do not get VERS for their flat, or who do not poll in favour of VERS, they will continue to live in their flats which would have benefited from two rounds of upgrading. If they need a place at the end of the lease, the Government will help them get another flat to live in. It could be a new flat from HDB for those who are eligible; a resale flat on a shorter lease; or a 2-room flexi flat for retirement. So, we will have various options to cater to diverse needs.

Miss Cheryl Chan has asked whether private developers will have a role in the redevelopment programme. In fact, in the case of SERS today, we already, from time to time, inject some private development in the redevelopment process. So, for VERS, going forward, I will not rule out the possibility of having private developers being involved, and we will study her suggestion carefully. But let us be very clear. Our aim is to redevelop public housing estates. So, we will ensure that any redevelopment is done in a way that preserves the character of our HDB towns and supports HDB's mission to provide affordable and quality homes for Singaporeans.

Mr Speaker, the Government has put in place ambitious housing plans for the next few decades. Whether they come to pass depends on our external, economic and financial situation. But this Government has a track record of delivering on our commitments. We will continue to work with all Singaporeans to translate our plans into reality and build a better Singapore for the future.

Mr Speaker, I would like to ask the Minister two supplementary questions. The first is on the guidelines for selecting the precincts for VERS. Is it purely based on age or are there other factors? The second question is: what percentage of votes will be considered successful during the polling in VERS, in order to qualify for it?

Mr Speaker, I can understand the interest in VERS and these are detailed questions that Miss Cheryl Chan and several Members have asked as well: what are the criteria for selection, what is the threshold for voting? I am afraid these are details that we will have to study and I do not have a reply today. I think it would be premature to talk about such details now, because we are, indeed, going through a very thorough study of how to go about implementing VERS. These issues will be incorporated into our study.

I would like to follow up on a point mentioned earlier in the Minister's speech. I know it is going to be 20 years more before you are going to share what VERS is. But can the Minister share, in terms of timeline, how soon will the residents who would potentially be in the precinct be informed of the potential of their precincts being included in the VERS selection? How soon would it be? Would it be 18 years? Two years before 20 years? Five years before 20 years?

Mr Lawrence Wong: Mr Speaker, again, I think we are getting into a level of detail. I can understand the Member's concerns. Residents may be wondering whether their flats are eligible and when HDB will inform. So, these are issues that we will study and will take into consideration the timelines and ensuring that if and when we are ready for VERS, we provide adequate time to notify the residents who are affected.

I thank the Minister and I understand many details need to be worked out. So, I will ask a question in reverse of the hon Member Mr Saktiandi's. How long would this study take and when can we expect that the Ministry will come back to the House to share more details once the study is concluded?

Mr Speaker, I would not want to restrict or indicate now specific deadlines. But we have been looking at this issue for quite some time. We have already indicated the broad roadmap, if you will, for how we think about housing redevelopment. From now, going forward, there are quite a number of major items that have to be put in place. First of all, in the more immediate plans, we are talking about extending HIP, which is already a major programme. We are talking about the next batch of flats that are built between 1987 and 1997. After that, we are looking at the older flats when they reach 60 years, to do the second round of HIP. That is a major programme, assuming we have the budget for it, to roll out HIP II. After that, we have VERS, and, as I said earlier, we will study how best to go about implementing VERS – the precincts that will be selected, the compensation amounts, the threshold, the mechanism for voting. These are details that will have to be looked at.

When we put all these in place, it is really quite a major series of initiatives and programmes that will have to be implemented. We will do it step by step, systematically.

Mr Speaker, two supplementary questions, please. May I ask the Minister whether SERS will be affected or delayed due to the announcement of VERS? Secondly, will the Government be burdened financially with this VERS programme?

Mr Speaker, there will not be any delay in SERS. For SERS, we have already selected many of the sites with high development potential. For SERS, there are a few more sites. And we will continue to implement SERS in the coming years. We do not intend to hold back the SERS programme.

On financial sustainability, that is a very important point that Dr Lily Neo has mentioned. And as I said earlier, we are committed to ensuring that even as we have laid out the broad roadmap for public housing going forward, we are committed to ensuring that whatever we do, it is done in a way that it is sustainable over the long term.

Taking reference from en bloc sales in private estates, how would the Government prevent the high possibility of the VERS exercise becoming very acrimonious? Also, how does the Government then intend to protect the rights of the minority who might object to the exercise, just like in the private sector?

The Government must have thought through before announcing VERS. What lessons can be drawn from private en bloc exercises and what could be prevented to make sure that these problems do not occur or recur similarly in the public housing exercise?

Mr Speaker, as Ms Denise Phua has said, it is, indeed, a concern that we have picked up and people have shared with us. They worry that the process of voting for VERS can end up with an acrimonious situation amongst neighbours. So, we are mindful of the concerns. But I would say this process of getting votes for upgrading is not new. HDB has done it before, of course, under more limited upgrading programmes like lift upgrading and HIP. We do have a mechanism to get residents to vote for upgrading. We have some experience. We will build on that experience. We will see what had been done in the private sector and we will work out what is the best possible arrangement for VERS in order to achieve the outcomes that we want while minimising some of the downsides that the Member has highlighted.