PUTRAJAYA must continue the People’s Housing Project (PPR) despite the high cost of construction, said urban-planning experts.

The federal government has left the responsibility of building low-cost homes to states in view of the high costs, but experts said it cannot avoid the problem and must work with state governments to find a solution.

Those The Malaysian Insight spoke to said Putrajaya can play a role by provide tax incentives for building materials, while state governments can take care of land matters.

Goh Bok Yen said there is a mismatch between demand and supply for such housing, as many low-income earners do not make enough to afford these units.

“Both sides cannot shirk their responsibilities. State governments have the power to regulate land matters and can adjust the prices according to construction costs. If (the project involves) government land, the construction costs can even be reduced to zero.

“The federal government can reduce taxes imposed on building materials to reduce the overall building cost. It can also consider subsidising developers in the affordable housing segment.”

He suggested that Putrajaya seek out experienced and established developers with the relevant skilled workforce, as this will help cut unnecessary costs due to effective planning.

“In addition to the high cost of construction, the problem also lies with the outdated design of PPR flats, which are not suitable for modern living. We must think about a design and concept suitable for the next generation.”

Building materials and land

Another expert, Yong Sun Yong, said the federal and state governments should form a joint committee, and look at working with developers under a public-private partnership model.

“To reduce land costs, developers often build low-cost homes in remote areas and locations that are not feasible. State governments can actually provide land to developers in prime locations, as they govern land rights.

“The federal government, which is in charge of states’ finances, can consider allocating funds to state governments according to their population size. They can also subsidise low-cost housing.”

Yong said using the industrialised building system (IBS) will help reduce construction costs.

IBS is known to be cost- and time-efficient, and reduces dependence on manual labour. The technology enables building components to be mass-produced in a controlled environment, and later assembled at construction sites.

Putrajaya no longer building PPR flats

Penang Housing, Local Government, and Town and Country Planning Committee chairman Jagdeep Singh Deo said in June, the state government received a letter from Housing and Local Government Minister Zuraida Kamaruddin indicating that Putrajaya had decided against building PPR flats due to cost factors.

Zuraida had also recommended, in a letter dated August 20, that the state government propose that private developers build such flats within the RM90,000-to-RM300,000 price range.

Jagdeep questioned the minister’s calculation, saying the minimum price of a low-cost unit is RM150,000.

If the proposed RM90,000 price is to be adopted, how would the state government make up for the RM60,000 shortfall, he questioned.

Goh said the price range of low-cost homes is not feasible as many potential buyers are hampered by their small income.

He said it is essential for developers to study the market and people’s purchasing power, and build units accordingly, as otherwise, the purpose of affordable housing is defeated.

Potential buyers would have to rent first before buying the property, he added.

“The government has to pay attention to the long-term plan, which is to improve the people’s economic well-being.

“Otherwise, low-income earners will rely too much on government subsidies.”

Goh said demand will not increase unless income, too, goes up.

Yong, meanwhile, pointed to Penang’s property market, saying developers should move away from the island and focus on the mainland. – September 13, 2019.