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MP Sparks Confusion Over HDB Redevelopment Scheme


Call him what you want, but Non-Constituency Member of Parliament (NCMP) Leong Mun Wai from the Progress Singapore Party (PSP) has been steadfast in asking questions in parliament sittings. Yesterday was no exception.

In an otherwise uneventful Parliament sitting, Leong Mun Wai made an adjournment motion about the Selective En-bloc Redevelopment Scheme (SERS) at Ang Mo Kio Avenue 3, where he accused the incumbent government of not being fair and transparent.


An urban redevelopment strategy, SERS was introduced by HDB in 1995 as part of its efforts to renew older residential properties. Home owners whose houses are selected for SERS will be compensated a sum based on the market value of the flat, and with rehousing benefits, they will get the opportunity to move to a new home with a new 99-year lease.


There are a few factors that come into play when HDB decides which flats are eligible for SERS - age and location of the HDB flats, and whether these flats maximise land use. Since its introduction, there have been 83 SERS projects thus far.

Photo: Ministry of Communications and Information

In the case of the Ang Mo Kio SERS exercise, Mr Leong called it "an epochal event in the history of our public housing" because this was the first time in SERS history that affected residents must "top-up cash to get an equivalent replacement flat with a new 99-year lease."

Photo: Ministry of Communications and Information

Senior Minister of State for National Development, Ms Sim Ann, clarified, "The compensation framework was based on independent assessment, which in turn was based on market value."


She also reiterated during the exchange that SERS compensation has never been pegged to the price of a new flat of similar size in a similar location on a fresh 99-year lease. She noted that SERS was never designed "to create a windfall."

Photo: Property Giant

She also pointed out that 99 per cent of affected Ang Mo Kio SERS residents no longer have to top up cash for their replacement homes after they were offered more options, such as 50-year leases, offering the Lease Buyback Scheme seniors and allowing flexibility for the residents to apply for a site that is different from the designated replacement site initially.


VERS is “Not A Viable Solution””


Mr Leong then argued that a future scheme announced by Prime Minister Lee Hsien Loong in 2018, the Voluntary Early Redevelopment Scheme (VERS), is "not a viable solution to the lease decay problem."


He claimed that Singaporeans have come to associate the term "en bloc" with the ability to make a windfall and get new homes with fresh 99-year leases, so VERS will be "doomed if the Government uses the same compensation formula as Ang Mo Kio SERS".


Ms Sim responded that SERS and VERS are not introduced to "extend a diminishing lease for free to 99 years". Furthermore, she added, "The details of VERS have yet to be announced, but the Government has already made clear that the terms for VERS will not be as generous as for SERS and that there are no replacement flats."


Towards the end of the exchange, Ms Sim had strong words for Mr Leong when she asserted that he was being "disingenuous in blurring the distinction between a market expectation and a policy commitment" and that he has "been quite deliberately misleading the public by shaping ungrounded expectations of schemes".


SERS vs VERS: What’s the Difference?


The objective of SERS and VERS are similar: both seek to redevelop existing HDB towns as part of Singapore’s urban redevelopment plans. Thus, with the SERS and VERS schemes sounding very similar to one another, it is unsurprising that many Singaporeans get the impression that they are similar.


In a nutshell, there are 3 main differences between SERS and VERS: the mode of redevelopment, the eligibility and most distinctively, the terms of offer.

Photo: www.gov.sg

While SERS projects have been announced regularly every few years since 1995, it is unlikely that we will see a VERS project in the near horizon - HDB flats have to reach at least 70 years in age, yet we do not have any flats of that age so far.

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