Please help the poor to own house

OhTongKeong 20150802 BI HousingNewspaper column of Penang Gerakan Secretary Oh Tong Keong:

Penang state executive councilor in-charge of housing Jagdeep Singh Deo claimed that banks had rejected application for loan of 30% of qualifiers for affordable housing.

Hence many dreams of owning a house have not materialized. This situation is not surprising. Gerakan has been saying that Penang’s affordable housing price is too high, making it “unaffordable”.

Banks usually evaluate the applicant’s monthly income, his other bank loans, loan repayment records, etc to decide on loan approval. Application will be rejected if applicant’s monthly income did not meet the requirements. There is no reason Jagdeep, son of late Karpal Singh, and being a lawyer, does not understand this simple projection.

In simple words, the state government has set the pricing too high for affordable housing, at about RM400k each. If the applicant pays 10% deposit, the total bank loan will be RM360k and he or she will have to cough out an instalment of RM1500 to RM2000 per month. How could the general public afford RM2000 monthly installment? They also need money for other expenses for family and self. The affordable housing is just not affordable to the public, except for the high-income group.

I suggest that the state government should review the affordable housing guidelines, making developers to build at least 60% of the affordable housing units to be priced not more than RM200k each, and no less than 800 square feet. This will allow the medium-low income people to afford a comfortable, yet truly affordable housing.

Apart from this, Jagdeep also said that 70% of low-cost and low-medium-cost qualifiers’ housing loan application was not approved. This is even worse than affordable housing cases, that even loan of RM72,500 could not be approved. This shows that Penang under the DAP-led State Government still has many poor families which could not even meet the minimum requirements for bank loan.

Soon after taking over the Penang state government, DAP proudly announced publicly that there were no more hard core poor in the state. However, the reality is, it is not difficult to find out there are still many hard core poor families in every corner of George Town. They can’t even afford paying the loan for RM50k low-cost or RM72,500 low-medium-cost housing. Hence, the state government should be more concerned for the poor, try to improve their livelihood and income, and not just provide lip service, or make baseless claims that Penang has gone beyond poverty.

I suggest the state government should formulate some plans to resolve the serious problem of shortage of low-cost, low-medium-cost and affordable housing. One example would be reviving the “rent-first-own-later” program. This will allow the rakyat to rent the house at affordable rental rates for 15 to 20 years, and eventually the house belongs to the family.

During the 39 year-tenure by Gerakan as state government, the “rent-first-own-later” program had helped many poor families to own their houses, and even helped them to move above poverty. That is the work of a sincere state government that helped its people.

In 2013, the state government also announced the Skim Pemilikan Bersama. The scheme provides a 30% interest-free loan for the poor to own a house. However, it seems there have been no progress reports on the matter after two years. Jagdeep should announce how many people have actually benefited from the scheme, how the poor families can apply for it, and whom to apply from. There should be transparent information for all poor families to benefit from it, so that they can own a house.

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