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Old 14-09-2003, 02:10 PM   #44
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HDB's reply on SERS woes

Fm TODAY, Friday, 12 Sep 2003

Sers is a win-win plan

Affected residents compensated fairly in Govt's drive to redevelop HDB estates

I refer to the report "Sers Woes" (Today, Sept 5), the letter "Old and hapless" by Pow Sok Choo (Today, Sept 8) and the letter "HDB should share wealth with retirees" by Tan Chee Yong (Today, Sept 9).

Sers was launched in August 1995 as part of the Government's strategy to renew older HDB estates. It identifies HDB blocks for redevelopment. This optimises land-use and gives households the chance to upgrade to new flats, on fresh 99-year leases, at subsidised prices. By building more flats in the replacement site nearby, it also allows other Singaporeans to move into mature HDB estates.

Households under Sers are compensated generously for their flats. They are paid the prevailing market value and guaranteed a replacement flat at a subsidised price.

Eligible households are also given a 20 per cent price discount on the new flat, up to $30,000, plus a financial package to ease their cashflow.

With these arrangements, Sers lessees are usually well able to afford a new replacement flat.

The flats in Tanglin Halt and Commonwealth Drive are almost 40 years old. The majority of the flats, i.e. 83 per cent, are three-room and bigger flats. The residents will generally enjoy a surplus if they buy a new flat of equivalent flat-type because the HDB compensation for the old flats exceeds the nett subsidised selling price of the replacement units.

Two-room flat households would also enjoy a nett surplus if they buy a three-room buy-back flat.

As a significant proportion of the flat owners are senior citizens, the HDB offers new studio apartments and new three-room flats as replacement flats, in addition to the usual new four-room and five-room flats. This has increased their choices and the affordability of the replacement flats.

The HDB put in place a comprehensive communications plan immediately after the announcement to keep the households informed and guide them through the implementation process. This included door-to-door distribution of the Sers information booklet, a week-long exhibition held nearby and individual sessions with the households to explain the rehousing package. There is also a toll-free Sers enquiry line at 1800-866-3070.

The writer, Pow Sok Choo, said the two-week period is too short for Sers lessees to make their decisions on the scheme. The Sers announcement was made eight months ago. The households involved have had ample time to weigh the options and decide on what replacement flat to buy, or to sell their existing flats with the rehousing benefits.

The HDB will assist all households who require more information in making their rehousing decisions.

The report quoted the case of a Mrs Chew who "was offered $110,000 for her three-room flat; an equivalent replacement costs about $135,000". Mrs Chew qualifies for the 20 per cent discount and hence, the equivalent new three-room flat, said to cost about $135,000 in the report, would be sold to her at 80 per cent x $135,000 = $108,000. She would have a net gain of $2,000.

If she chose a cheaper three-room flat or a two-room upgraded flat (estimated to be $45,000) or three-room buy-back flat (estimated to be $75,000), she would gain even more.

The report is erroneous in stating that "the studio apartments, meant for those aged 55 and above, come with a 30-year lease and will be claimed by the HDB if the tenants die before then".

If owners (or the estates for deceased owners) return their studio apartment to the HDB before the expiration of the 30-year lease, they will be compensated at a pro-rated price based on the remaining lease.

So far, only about four per cent of the lessees have given the HDB feedback that the compensation was low. The report is therefore an exaggeration of the actual situation.

Sers is an effective and equitable scheme to rejuvenate selected older HDB estates. Affected residents are compensated fairly and receive significant financial benefits. Sers is a win-win solution that benefits both the current and future residents of mature public housing estates.

Sum Foong Yee (Miss)

Senior Executive Public Relations Officer for Director (Corporate Developments)

Housing and Development Board
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