PETALING JAYA: The government has been urged to consider a new way to solve the homeless problem in urban centres.
The solution entails acquiring abandoned or unoccupied buildings and converting or repurposing them into apartments that can then be sold at affordable prices.
According to the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia, such a move could address two problems – solve the homeless problem and give new purpose to abandoned buildings.
Association president Michael Kong noted that private developers are reluctant to be involved in affordable homes projects because of the thin profit margin.
He said the National Property Information Centre (NPIC) could take the lead by setting up a database on such properties.
“Developers can then assess the demand to ensure that they do not end up with an oversupply of such homes,” he told theSun.
While a home is a basic necessity, many people cannot afford to own one, even those in the “affordable” category.
Officially, the standard price for an affordable home today is RM300,000. However, Bank Negara Malaysia data shows that the median household monthly income in Malaysia is only RM5,873, which qualifies a person to only a RM200,000 home loan.
However, Kong conceded that turning unused commercial buildings for residential purposes “is not so straightforward”.
“It boils down to ringgit and sen and how the owners of these buildings respond to such a proposal,” he said.
“There are many intricacies involved in redeveloping a building. For instance, the consent of the bank is necessary if the property is still under mortgage,” he said.
He pointed out that the owners of these buildings would also want to know what benefits they can extract before agreeing to such a deal.
Kong said Malaysia could take a leave out of Singapore’s Selective en bloc Redevelopment Scheme (SERS), which is an urban redevelopment strategy by the Housing and Development Board (HDB).
Under the SERS scheme, the government acquires a matured HDB apartment and relocate its tenants to a newly completed project with a new 99-year lease or offer them other housing options.
These tenants would be compensated for their HDB apartments and be given the chance to buy their new properties at subsidised prices.
Their old HDB apartment is then redeveloped with new additions and facilities for the next generation of occupants.
Kong said the scheme makes sense considering that it only needs the nod from majority of the tenants. “If you have to get the okay from everyone, all you need is for one or two to say ‘no’ and the project cannot proceed,” he pointed out.
Tan Hun Beng, chairman of the Penang chapter of the Real Estate and Housing Developers Association agreed that repurposing a building from commercial to residential use is “challenging”.
“For instance, we need to ensure that amenities such as public transport is within easy access for those who will reside in these buildings to ensure there is no mismatch,” he told theSun.
He agreed that the SERS scheme could work in Malaysia but the NPIC must compile the data to show how both developers and home buyers can benefit.
“It is timely. There are many dilapidated buildings that could otherwise be redeveloped into affordable homes for the B40 and lower M40 income groups,” he told theSun.
However, National House Buyers Association secretary-general Datuk Chang Kim Loong warned that the SERS scheme could also fail the very people it is supposed to benefit.
“There have been cases in which people are left homeless,” he told theSun.
He said the government should instead focus on public-private partnerships to improve home ownership.
“Slum areas such as Chow Kit can be converted into rent-to-own housing projects that will truly benefit those in the low-income group,” he added.
