By Khairul Khalid
Chang Kim Loong
Affordable housing agency 1Malaysia Housing Programme (PR1MA) should be more politically accountable, said the National House Buyers Association (HBA).
“We reiterate our concern on the political accountability of PR1MA as an organisation. They are currently not under the ambit and jurisdiction of the Housing Ministry,” said HBA secretary-general Chang Kim Loong.
“Why is it not under the Housing Ministry which has the appropriate experience? Instead, it is a unit of the Prime Minister’s Department operating in relative obscurity from public scrutiny and high-level protection for its affirmative action policies,” said Chang.
The HBA secretary-general also questioned the lack of legislative controls on PR1MA that may be detrimental to homebuyers.
“PR1MA is not under Housing Development (Control & Licencing) Act (HDA). Therefore, PR1MA developers need not be licenced (to build) and don’t require advertisement and sales permit.
“Buyers who buy into PR1MA projects will not have the protections under the HDA legislation. Thus, the ‘speedy, cheap and effective’ Housing Tribunal will not be available for aggrieved and ‘short changed’ buyers and victims,” said Chang.
He also wondered why PR1MA is not under the current legislation that regulates housing, for example the HDA 1966 and its regulations.
“Why shouldn’t there be safeguards like the imposition of mandatory housing development (project) account? Why shouldn’t the mandatory statutory sale and purchase agreement (SPA) in schedules ‘G’, ‘H’, ‘I’ and ‘J’ be used? PR1MA is not following the regulated SPA,” said Chang.
He was commenting on various housing initiatives in the federal government’s Budget 2016 announced on Oct 23 by the Prime Minister Najib Abdul Razak.
Among others, the government is allocating RM1.6 billion to construct 175,000 PRIMA units, which will be sold at 20% below market price.
PR1MA was established under the PR1MA Act 2012 as a government initiative to address the escalating problem of affordable housing in the country.
It is to plan, develop, construct and maintain affordable housing for middle-income households in key urban centres nationwide. PR1MA homes are currently priced between RM100,000 and RM400,000. Applications for PR1MA homes are open to all Malaysians with a monthly household income of between RM2,500 and RM10,000.
HBA took some positives from Budget 2016, such as that the government’s various efforts to build more affordable housing through PR1MA, Syarikat Perumahan Negara Bhd (SPNB), 1Malaysia Civil Servants Housing Programme and People’s Housing Programme (PPR).
Other than PR1MA, under Budget 2016 the government is allocating RM200 million for 10,000 houses under SPNB’s 1Malaysia People-Friendly Home Programme with a RM20,000 subsidy for each unit. RM863 million is allocated PPR under the Housing Ministry to build 22,300 apartment units and 9,800 units of terrace houses.
According to Chang, the RM200 million introduced in Budget 2016 for the First Home Deposit Financing Scheme to assist first-time homeowners to pay deposits when purchasing affordable housing is also laudable, but he urges extreme caution.
“‘Zero entry cost’ properties, whereby the buyer does not need to make any downpayment, encourages unnecessary speculation. Homebuyers are advised to rent instead of own if they cannot raise the initial downpayment commitment fee for an affordable housing unit.
“The government’s obligations should be confined to providing housing priced in the affordable range for those with a household income of less than RM10,000 a month,” said Chang.
Although HBA was grateful for the government’s initiatives in building more affordable housing, Chang said that the right implementation is also critical in ensuring that the affordable units reach those who need them the most.
“Affordable housing must be built at the right places, priced reasonably (between RM150,000 and RM300,00 and not more than RM400,000 for prime locations) and only for first-time homebuyers. It should not be made available for second-time homebuyers which PR1MA allows with certain conditions,” said Chang.
HBA also believes that all land allocated to PR1MA should be used to build affordable housing and not to partner with private developers.
“From what we understand, only 40% of the land is being used for affordable units, with the balance used for lifestyle properties and to build commercial and high-end properties,” said Chang.
HBA said that despite that efforts of various government agencies such as PR1MA, the best agent of delivery for private affordable housing is private developers.
According to Chang, the government can boost the delivery of affordable housing by giving incentives and rebates to private developer to build affordable housing, for example lower corporate tax rate, lower land conversion premiums and fast-tracking the release of unsold Bumiputera units.
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