Rehda backs PM’s call to review affordable housing policy

PETALING JAYA: The Real Estate and Housing Developers' Association (Rehda) Malaysia is always willing to discuss with the government and other stakeholders to develop more housing accessibility for all Malaysians, especially the B40 group, says its president Datuk NK Tong.

He said Rehda would continue encouraging their members to promptly uphold their nation-building duty of providing quality, affordable homes for the rakyat.

Prime Minister Datuk Seri Anwar Ibrahim had said the government intends to reconsider the policy mandating developers to devote a percentage of their development projects to affordable housing.

He said the government's mandate for housing developments to contain at least 30% affordable housing still needs to be met on time with the budget allocated.

Tong said Rehda supports the Prime Minister's statement that the current policy about affordable housing should be reviewed.

"Rehda is committed towards its responsibility in assisting the government to ensure sufficient affordable housing for the rakyat,” he said in the statement on Friday (June 2).

He said the government should be entirely accountable for the supply of affordable housing, as it was over 50 years ago, and in many other nations worldwide.

"This will end the current practice of cross-subsidies, which boosts the costs of usually-priced housing and make it more difficult for the M40 rakyat to afford dwellings.

"Developers are facing several challenges due to the affordable housing criteria that must be met to build residential development in the open market.

"Many of these concerns come from the aforementioned cross-subsidy methods that developers must implement, in which open-market home prices must be increased so that developers can create cheap housing, frequently sold below the cost of construction," he said.

Meanwhile, Tong said in turn of the price increase, open-market residences aimed for the M40 group have become unaffordable. As a result, developments that do not attract buyers are more likely to be late, sick, or abandoned.

"This is especially true for projects produced by SME developers that lack the financial resources to cushion themselves against economic issues, which is one of the reasons Rehda has asked the government to relinquish the responsibility for building affordable housing.

"Another unintended consequence of higher regularly priced housing due to cross-subsidy is an increase in completed but unsold properties, often incorrectly referred to as ‘overhang’.

"We are aware of and grateful for the steps taken by the government thus far to address pressing concerns in the housing and property business, such as the recent introduction of Skim Simen Rahmah to address the price increase in building supplies,” he added.

However, he said much more has to be done to secure the industry's revival and viability for the benefit of prospective future homeowners.