With Vers, it's time to get real with lease decay and the asset value of flats

Singapore's public housing model is predicated upon leases ending, so land can be recycled. Policy must reflect that to ensure fairness for current owners and future generations.

- Ng Keng Gene

Within the next five years, Singaporeans will find out the specifics of the Voluntary Early Redevelopment Scheme (Vers), which facilitates the redevelopment of selected Housing Board precincts before their 99-year leases end.

This should include long-awaited details on how HDB flat owners will be compensated under Vers, and there is hope among some that the scheme, like the Selective En bloc Redevelopment Scheme (Sers), will help them avoid facing the day that their leases end and the value of their flats becomes zero.

There is good reason for 99-year leases. When they end, land is returned to the state and can be recycled to meet the needs of future Singaporeans.

If the country takes seriously the needs of generations to come, flat leases running down to zero is a reality that Singaporeans have to face—even amid rising resale prices that increase the asset value of flats, the positioning of public flats as a "nest egg" for retirement and the longstanding narrative that upgrading programmes help flats with depleting leases to retain their value.

As engagements on Vers take place, it would be prudent for policymakers to better reflect the long-term realities of public housing in Singapore which have thus far been under-emphasised.

There is a need to be clear about the obligation to be fair to future generations and acknowledge the reality that flats will be returned to HDB at the end of their lease.

Seen from these perspectives, Vers compensation terms should reflect the objective of 99-year leases—to provide flats for future Singaporeans—as the scheme is not a fix for lease decay.

VERS ISN'T SERS Under Vers, flat owners in selected precincts that are aged about 70 and older will vote if they want their homes to be acquired by the Government for redevelopment, before their leases run out.