Sunday, August 19, 2018

PM Lee to talk about cost of living, housing at National Day Rally
Read more at https://www.channelnewsasia.com/news/singapore/ndr-pm-lee-cost-of-living-housing-at-national-day-rally-2018-10626800

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Solving the housing problem - when HDB lease of 99 years is up :-

99-year-leasehold HDB flats will become zero value when the 99 year lease is up.
One way to ensure that its value will not turn to zero - is to enbloc them by allowing private developers to bid for it - but cap its price to be around the BTO prices.

In this way, owners of such flat can reap enbloc price per unit and private developers can redevelop the HDB flat that is reaching 99 years and resell it at the prevailing BTO prices.

By doing so, owners can retain HDB as an asset with values without becoming zero, and also the flat can be redeveoped into new flat and sell at a prevailing price with profit to developers --- and Government coffer will not be hurt.

This will also promote growth of the construction sector - with this enbloc scheme - and further contribute to the GDP of Singapore.
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Some people may say, if we allow HDB flat to be enbloc, the younger generation will not be able to afford future HDB flats.
Can we solve this problem in this manner :-
(1) Developers who enbloc HDB flat of 13 floor will pay market price to HDB owners when 99 years lease is up.
(2) When the developers build new BTO flat - they must build a 26 floor flat. The first 13 floor can be sold at market price, but another 13 floor to be sold at subsdised HDB price to younger generation.
In this way, government will have sufficient flats for young generation at affordable prices, but at the same time, current HDB owners will not have their HDB value become zero.


(3) the owners benefitted from the market price cannot buy flats at subsidised price but need to buy at resale prices.

(4) In future, when the 99 year lease is up, young owners (at the new 13 floor of flat) who bought at subsidised price can again enbloc at market prices.
Old owners (who occupy the other 13 floor of flat) will no longer be around.

Thus when enbloc again after another 99 year lease is up, the developers again build another 26 floor of flat - with 13 floor reserve for new batch of young owners at subsdised prices and another 13 floors to sell at market price.

In this way, there are 2 benefits :-
(1) Asset Enhancement of the HDB flat can be fulfilled, 
(2) at the same time, young owners can afford to buy new HDB flats at a subsidised prices.

This scheme can continue to "recycle perpetually" --- hopefully the Government can considere this scheme for the just announced "VERs" programme by the PM.
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Ricky Lim
Some people say - VERs pay owners market price don't make sense.

To resolve this problem:-
Pay market price make sense - if instead of building 26 floor - build up to 50 floor. 13 floor reserved for young buyers at subsidised prices. The rest of 37 floor sell at market price. Then developers still earn, and land price can return to Government.

1 floor can have at least 10 units - build up to 50 floors will have 500 units versus 13 floor of 10 units = 130 units. Thus VERs pay a market price to existing owners, return land prices to Government and Developer can make profit make sense. Triple Wins.
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Ricky Lim
Some people say, building 26 floors of HDB flat may not be enough because the plot ratio may not be profitable to developers and thus cannot pay market prices to enbloc owners.

Pay market price make sense - if instead of building 26 floor - build up to 50 floor. 13 floor reserved for young buyers at subsidised prices. The rest of 37 floor sell at market price. Then developers still earn, and land price can return to Government.

1 floor can have at least 10 units - build up to 50 floors will have 500 units versus 13 floor of 10 units = 130 units. Thus VERs pay a market price to existing owners, return land prices to Government, Developer can make profit make sense and also young owners can afford to buy flats at subsidised price. 4 Wins.

However some people say :-
"I dont think it's as simple and straight forward as adding more floors. I am not a architect, but I believe a building needs to be twice as strong to support more floors, also issues like needing more lifts to support more occupants. The economy of scale might not be that substantial to give original owners a free unit."

My answer is: Thought some new HDB flats already built very high. Condo also build very high. Thought just need strong foundation. If they can, why old HDB flats cannot?
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Ricky Lim
As successfully piloted the open energy market in Jurong, will it be roll out to the rest of Singaporeans.
As many energy service providers will participate --- with energy sources generated not only by fossil fuel, but also by solar power, LNG, waste etc --- will this help to prevent a rise of electricity bill due to the volatile oil prices.
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Ricky Lim
Mandate every hawker stall, sell at least one dish that is affordable to low income earners or retiree eg. $2.50 to $3. In this way, it will help to curb inflation and contain high cost of living on food prices.
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