SINGAPORE: As a large majority of flat owners selected for the Voluntary Early Redevelopment Scheme (VERS) are likely to be seniors, it is important for the authorities to keep ensuring that people buy homes with leases that can outlive them, said National Development Minister Chee Hong Tat in parliament on Wednesday (Sep 23).
He was responding to a question from Workers’ Party Non-Constituency Member of Parliament Andre Low on the scheme, which allows the government to buy back Housing and Development Board (HDB) flats nearing the end of their 99-year leases, compensate residents and redevelop the land. VERS is offered to selected precincts when flats are about 70 years old.
Noting that those selected for the scheme will likely be seniors who have paid off their home mortgages, Mr Low said these owners might have expected to live in their flats until they die.
He then wanted to know if the authorities will ensure that these elderly homeowners are not left with outstanding mortgages that the compensation amount cannot cover or be forced to deplete their retirement savings to secure another home.
In his response, Mr Chee said: “If we can maintain the gatekeeping for people to buy homes that can last them for life … by the time the flats reach the time (for) VERS, which would be at least 70 years or more, we would expect that most of the residents staying in these older flats will be seniors, and hopefully they would have already paid off their mortgages.
“That’s why we feel that it’s important to have that upfront gatekeeping to ensure that when people buy homes, we keep the number of people who cannot stay in these homes till the end of their lives to be as small as possible.”
Currently, about 2.5 per cent of HDB households do not own flats that cover the owners till they are at least 95 years old, said Mr Chee in an earlier speech.
He added that the current median lifespan of Singaporeans is 84, which means that almost all HDB households own flats with leases that can cover their owners for life.
“We will continue to closely monitor the proportion of HDB households who do not own flats with sufficient duration of leases that can cover the owners to their end of life, and keep this number as small as possible,” said the minister.
VERS SHOULD NOT CREATE “LOTTERY EFFECT”
VERS was first announced in 2018 by then-Prime Minister Lee Hsien Loong.
The terms of VERS have yet been finalised, and the government is aiming to work out details of the scheme in its current term of government, Mr Chee said in a media interview last month.
After establishing the policy parameters, VERS will kick off with a “few selected” sites and likely from the first half of the next decade.
Mr Chee reiterated these in a speech responding to parliamentary questions from Mr Low and MP Foo Cexiang (PAP-Tanjong Pagar), where he also laid out the primary purpose of VERS – that is to facilitate the orderly redevelopment of towns where many older flats were built within short periods of time.
“Based on this approach, it is not necessary for every older flat to go through VERS, as we are mindful of the disruption to our residents who need to relocate when their flats undergo VERS,” said Mr Chee.
