THE Penang government is reviving the “rent-to-own” scheme to help people own low- and low-medium-cost homes.

Chief Minister Chow Kon Yeow said the state Housing Department will work out the mechanism and criteria for applicants.

“There are many who cannot even afford to buy low-cost and low-medium-cost homes. They cannot secure bank loans to buy at RM42,000 or RM72,000,” he told reporters today.

“To address this, we have made a policy decision to convert two or three housing projects under the state government and local authorities to ‘rent-to-own’ instead of direct sale.”

Under the scheme, tenants will continue to pay a monthly rent over 20 years or so. Their rental will be regarded as instalments for the units.

“The tenants will have to make sure they pay rent promptly and do not default on their payments,” said Chow.

He said for now, the plan will involve projects undertaken by the state, like the one in Mak Mandin, Butterworth.

Future projects by state investment arm Penang Development Corporation will also be included, he said, adding that he hopes private developers will also get involved.

Chow said it is unlikely for developers to implement the concept themselves, but the state could buy units from them for the scheme.

“Perhaps, the developers can sell the units to the state at cost.”

Last week, state housing exco Jagdeep Singh Deo said he had received approval from Housing and Local Government Minister Zuraida Kamaruddin to convert two projects in Seberang Jaya to the “rent-to-own” scheme.

Private developer M Summit Group recently announced that its new condominium project, Ramah Pavilion, in Teluk Kumbar will also offer 30 units under the scheme.

The “rent-to-own” concept is not new in Penang.

Decades ago, low-cost terrace homes in Kg Melayu, Air Itam, were offered under the scheme. Tenants paid a monthly rent for 14 years before the houses became theirs. – June 21, 2018.