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Sim Ann accuses Leong Mun Wai of 'misleading the public' on SERS

Sim Ann accuses Leong Mun Wai of 'misleading the public' on SERS

Blocks 562 to 565 in Ang Mo Kio Avenue 3 have been picked for the Selective En bloc Redevelopment Scheme (SERS). (Photo: CNA/Cheryl Lin)

SINGAPORE: Non-Constituency Member of Parliament Leong Mun Wai (PSP) is "deliberately misleading the public" by "shaping ungrounded expectations" of government en bloc schemes, Senior Minister of State for National Development Sim Ann said in a debate with the NCMP in Parliament on Monday (Jan 9).

Ms Sim was refuting claims made in an adjournment motion by Non-Constituency Member of Parliament Leong Mun Wai (PSP) on the Selective En bloc Redevelopment Scheme (SERS) at Ang Mo Kio Avenue 3.

Ms Sim, who has been engaging with Mr Leong on public housing policy both in and outside the House, said: "I hope that instead of conflating issues, confusing issues, or quite deliberately misleading the public by shaping ungrounded expectations of schemes, creating goal posts, as it were, I hope that Mr Leong will engage in upcoming debate responsibly."

In his adjournment motion on the Selective En bloc Redevelopment Scheme at Ang Mo Kio Avenue 3, Mr Leong called the Ang Mo Kio SERS exercise "an epochal event in the history of our public housing" and argued that a future scheme - the Voluntary Early Redevelopment Scheme (VERS) was not a viable solution for when HDB flats' leases run out.

He contended that the Ang Mo Kio SERS exercise differs from previous ones as affected residents must "top-up cash to get an equivalent replacement flat with a new 99-year lease".

However, Ms Sim told the House that SERS compensation has never been pegged to the price of a new flat of similar size in a similar location on a fresh 99-year lease.

She also pointed out that 99 per cent of affected Ang Mo Kio SERS residents no longer have to top up cash for their replacement homes after they were offered more options, such as shorter leases for seniors and letting them apply for flats at different sites.

While the Ministry of National Development (MND) has provided Mr Leong with an example of a past SERS exercise in West Coast where residents had to top up cash for a new flat, Mr Leong said that this only applied to residents who opted for “a more centrally located replacement site”.

"The Government has repeatedly stated it has used the same model and approach as other SERS to compute the compensation for the Ang Mo Kio SERS but the Government has not admitted that the outcome of the Ang Mo Kio SERS is different from other SERS," said Mr Leong, calling it "disingenuous" of the Government.

While Minister for National Development Desmond Lee has said that the different outcome was because of a difference in leases - the SERS flats in Ang Mo Kio have a shorter lease balance of about 57 years, compared with around 70 years in past SERS exercises - Mr Leong said that he cannot accept this explanation.

"The minister’s explanation does not fully explain why the compensation given to Ang Mo Kio residents is insufficient for them to buy an equivalent flat with a new 99-year lease like in other SERS," said Mr Leong.

Ms Sim said this is largely because the new flat on a 99-year lease comes with substantive government subsidies and additional financial support such as from a SERS grant.

She added: "I feel that we need to repeat this: 99 per cent of the flat owners who were involved in the SERS exercise do not need to top up to purchase similar type flats with a full 99-year lease or a similar sized flat on a 50-year lease.

"So the Government, in determining the compensation for assessment, has been consistent and applying valuation principles that are well established."

Mr Leong also pointed out that in the Marsiling acquisition exercise, which was announced slightly later than the Ang Mo Kio SERS, residents did not need to top-up cash although the flats in the two estates were about the same age.

"In my opinion, the full explanation is that lease decay has affected prices of old HDB flats in mature estates more than the ones in non-mature estates," he said.  

"At the same time, the prices of new flats in mature estates have risen much faster because they enjoy the benefits of good amenities and location. Therefore, there is a larger price difference between the existing old flats and the new replacement flats in Ang Mo Kio than in Marsiling." 

VERS "NOT VIABLE", SAYS LEONG

Extrapolating from this, Mr Leong said that VERS is "not a viable solution to the lease decay problem".

VERS is a voluntary scheme to be offered to selected precincts when the flats there are 70 years or older. It was announced by Prime Minister Lee Hsien Loong in his 2018 National Day Rally but few details of the scheme have been made known.

However, Mr Lee has said that the terms will be less generous than that of SERS.

Mr Leong said: "Singaporeans are expecting VERS to be like 'SERS for all' but it is a different story if VERS is actually 'Ang Mo Kio SERS for all'.

"The original SERS means residents get paid, Ang Mo Kio SERS means residents must pay."

Mr Leong said that the likelihood of any VERS proposal being approved will "also be nil" because Singaporeans have come to associate “en bloc” with windfalls and new homes, so VERS will be "doomed if the Government uses the same compensation formula as Ang Mo Kio SERS".

He adds that because of this, the redevelopment of mature estates "will not materialise".

"Singaporeans, especially those who live in older flats with decaying leases, should be aware that Ang Mo Kio SERS possibly foreshadows what could happen to them in future if the Government uses the compensation formula applied to Ang Mo Kio SERS for VERS," he said.

Ms Sim said both SERS and VERS are "not meant to extend a diminishing lease for free to 99 years". She added: "The details of VERS have yet to be announced, but the Government has already made clear that the terms for VERS will not be as generous as for SERS and that there are no replacement flats."

She then said of the NCMP: "if you examine what Mr Leong has been doing, I think he has been reshaping people's expectations of the scheme, and I cannot help but wonder why he is doing so. Be that as it may, it doesn't seem very inconsistent with what Mr Leong has been doing."

Mr Leong disagreed with this characterisation and insisted that he is not shaping expectations of society on these schemes. 

"The Government has given the expectation first of all, that HDB flat is an appreciating asset and now there's lease decay ... okay, the Government has suggested VERS - so the Government has shaped the expectation," he argued.

Ms Sim replied: "I believe that the information that we have been putting out is transparent and we also have been consistent in doing so.

"With regard to diminishing leases, again, the Government has also been upfront in letting residents know about this, in being clear to home owners ... I think what Mr Leong is trying to do here is something that is increasingly evident to everyone."

Source: CNA/hm

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