Affordable housing around the world

Housing the nation has always been a challenge for governments around the world. Issues of affordable housing are hot potatoes for countries with growing population and escalating housing prices due to inflation.

Nevertheless, there are still a handful of successful public housing models in other countries if we look around. Let's travel around the world with me to explore some of these exemplary practices.

We can first navigate around Asian countries which have similar backgrounds and comparable challenges as Malaysia. In fact, two of the most outstanding countries in public and affordable housing strategies are not too far from us. One of them is Hong Kong, and another one is our neighbour, Singapore.

Hong Kong has about 30% of its population or 2.1 million people living in public rental housing as of March 2012. It has also implemented numerous measures to ensure their public rental flats are allocated to deserving people.

Among the measures are... the applicants and their family members must undergo comprehensive tests covering both income and assets, they must not own or co-own or have an interest in any domestic property in Hong Kong. The public rental tenancies cannot be passed on automatically from one generation to the next. For tenants who had stayed for 10 years and above, and whose income and assets had exceeded the prescribed ceiling limit, they are required to pay additional rent or vacate their flats.

Since 1978 to 2012, about 465,100 flats in Hong Kong have been sold to low and middle-income households at discounted prices under various subsidised schemes by the government.

Let's us now travel to Singapore to visit its public housing scenario. Singapore has a successful public housing background under the management of Housing and Development Board (HDB) established in the 1960s. Today, there are over 900,000 HDB flats in Singapore, with 90% of them owned by Singaporeans and the remaining 10% are rented to the locals. What is even more amazing is that more than 80% of Singaporeans are living in these HDB flats.

Over the last 50 years, Singapore has formulated sound public housing policies that could even meet specific needs of the people at different life stages, such as for young couples, multi-generational families, elderly, needy families and singles.

For example, at least 90% of flats are set aside for first-time applicants, and for smaller flats, the income ceiling is set at US$3,000 (RM7,340) so that high income households will not compete with the low income households. For the truly needy, the government provides highly-subsidised rental flats, with monthly rental as low as US$32 (RM78).

In addition, HDB flat owners-to-be are not allowed to own any other property in Singapore or in other part of the world. For flat owners who wish to sublet their flats, they must meet the minimum occupation period (depending on purchase mode and flat type) and obtain HDB's approval before they can sublet their units.

HDB has not only successfully housed the nation, it has also provided homes with quality environment. According to their Sample Household Survey in 2008, 96.4% of Singapore households were satisfied with their flats. All these efforts have also proven to be financially sustainable as Singapore has been able to keep its public housing budget within 1% of its gross domestic product (GDP).

Both Hong Kong and Singapore are strict in enforcing their public housing policies owners or tenants who breach the rules will be disqualified from owning or renting the public housing.

After visiting the two public housing models in the Asian region, let us also explore the strategies in other parts of the world.

In the United Kingdom, public housing is often referred as “council housing”. In London, the right to buy a council home comes with several conditions. For example, the applicants have to hold a public sector tenancy for five years, and the property that they wish to purchase must be their only home and is for owner occupation.

In Australia, the government had commenced a National Rental Affordability Scheme (NRAS) in partnership with the states and territories to encourage innovative delivery of affordable housing. The scheme offers financial incentives to persons or entities to build and rent houses to low and moderate income households, with rental of at least 20% lower than market value.

To be eligible for NRAS homes, prospective tenants must meet the gross income limit set by the government. For existing NRAS tenants whose annual household income exceeds the applicable limit by 25% or more in two consecutive years, they will cease to be eligible tenants.

The above scenarios displayed some of the commendable public and affordable housing policies implemented by other countries. Back in Malaysia, we have our own challenges in addressing the housing needs of low and middle income households, and our government has stepped up its efforts by introducing new measures, including the PRIMA (Perumahan Rakyat 1 Malaysia) housing scheme. It is a long-term journey and many areas need to be looked into in providing a transparent and sustainable low-cost and affordable housing to the deserving people. It is hoped that the successful models in other countries can shed some lights on our own challenges, as we continue our journey in housing our nation.

> FIABCI Asia-Pacific regional secretariat chairman Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. - Food For Thought by ALAN TONG (The Star)