Oral Answer by Ministry of National Development on VERS, HIP II and relaxation of CPF rules for purchase of older flats

Sep 10, 2018

Question by: Miss Cheryl Chan Wei Ling

Miss Cheryl Chan Wei Ling: To ask the Minister for National Development with the recent announcements of the Voluntary Early Redevelopment Scheme, Home Improvement Programme 2 and relaxation of CPF rules for purchase of older flats, to what extent do these measures address the concerns on the lease decay issue and how do the measures support long-term urban planning in Singapore.

Question by: Mr Alex Yam Ziming

Mr Alex Yam Ziming: To ask the Minister for National Development 

(a) whether he can provide more information about the Voluntary Early Redevelopment Scheme (VERS);

(b) what is the projected timeframe for its implementation;

(c) which are the precincts that will be eligible; and

(d) how will the compensation package be computed.

Question by: Mr Saktiandi Supaat

Mr Saktiandi Supaat: To ask the Minister for National Development 

(a) whether the Government's offer to buy back HDB flats older than 70 years extends to all flats or only selected ones;

(b) what will be the selection criteria for the eligible VERS precincts; and

(c) what options will residents have if they fail to get VERS for their flat.

Question by: Miss Cheryl Chan Wei Ling

Miss Cheryl Chan Wei Ling: To ask the Minister for National Development 

(a) what are the factors considered in the planning phase for the Voluntary Early Redevelopment Scheme; and

(b) whether the private developers will have a role in the redevelopment programme and, if so, can more details be shared.

Answer:

Over the past 50 years, HDB home ownership has uplifted generations of Singaporeans, and given them a stake in the nation’s progress.  The Government is committed to strengthen our institution of public housing and home ownership, so that it continues to bring tangible benefits to current and future generations of Singaporeans.  

This is why at the recent National Day Rally, Prime Minister Lee highlighted MND’s plans to systematically upgrade older HDB flats through HIP and HIP II, and to progressively renew and rebuild older HDB towns through VERS. 

Various members have asked about the details of VERS.  VERS will be launched in about 20 years’ time to pace out the redevelopment of our older towns.  Some of our older housing estates were built up in a hurry to meet the housing needs of Singaporeans at that time.  By spreading out the redevelopment of these towns over a span of 20 to 30 years through VERS, we can avoid having to rebuild entire towns in a similar hurry, which would be highly disruptive. 

This large-scale redevelopment effort is a good opportunity not only to rebuild some of our older precincts, but also to introduce new and exciting concepts of living into our older towns.  To achieve this, we will need to carefully study how to select the precincts and stage the redevelopment, precinct by precinct, town by town.  

We have already explained the broad concept of VERS and how it is different from SERS.  SERS is limited to precincts where there is high development value to be unlocked.  Because of the value unlocked, we share this value with residents through generous compensation, and the acquisition can be made compulsory.   

In the case of VERS, we expect more flats to be eligible, as the intention is to space out the redevelopment of the town.  But the compensation terms for VERS will be less generous than SERS, because we will be redeveloping land that is more built up.  Hence VERS will be offered on a voluntary basis and residents will get to vote.

We have outlined the broad concept of VERS.  But there are still many details to be worked out, and we will need time to do so.  This includes the extent of coverage of VERS and how the compensation will be computed.  In particular, we will ensure that we implement VERS in a fiscally sustainable way, so that it does not become a burden for the next generation.
 
For residents who do not get VERS for their flat, or who do not poll in favour of VERS, they will continue to live in their flats which would have benefitted from two rounds of upgrading.  If they need a place at the end of the lease, the Government will help them get another flat to live in.  It could be a new flat from HDB for those who are eligible; a resale flat on a shorter lease; or a 2R flexi flat for retirement.  So we will have various options to cater to diverse needs.  

 Miss Cheryl Chan asked whether private developers will have a role in the redevelopment programme.  In fact, in the case of SERS today, we already from time to time inject some private development in the redevelopment process. So for VERS going forward, I will not rule out the possibility of having private developers involved and we will study her suggestion carefully.  But let’s be very clear. Our aim is to redevelop public housing estates, so we will ensure that any redevelopment is done in a way that preserves the character of our HDB towns and supports HDB’s mission to provide affordable and quality homes for Singaporeans.

The Government has put in place ambitious housing plans for the next few decades.  Whether they come to pass depends on our external, economic and financial situation.  But this Government has a track record of delivering on our commitments.  We will continue to work with all Singaporeans – to translate our plans into reality and build a better Singapore for the future.