Compensation, rehousing options crucial to flat owners from older estates selling their flats under Vers

The size of the compensation package and rehousing options will weigh heavily in their decision to sell their HDB flats back to the Government under the Voluntary Early Redevelopment Scheme (Vers), elderly residents living in older estates have said.

They were reacting to National Development Minister Chee Hong Tat’s remarks in an interview that his ministry aims to use the current term of Parliament to develop the policy framework for the scheme.

This includes identifying possible sites where the scheme will be first offered, ensuring that there are sufficient homes for those involved to relocate to, and working out a fair compensation package for residents whose flats are taken back early.

Once the policy parameters are in place, Vers will be progressively offered to a “few selected” sites likely from the first half of the next decade when the flats there are about 70 years old, Chee said.

Vers was first announced by then-Prime Minister Lee Hsien Loong in 2018 to allow the Government to buy back flats nearing their 99-year lease by compensating residents and redeveloping the land.  

It addresses the issue of lease decay and the resulting decline in value of older flats.

While Chee’s comments on Aug 10 mark the Government’s latest update on Vers, most of the 12 residents from older estates such as Ang Mo Kio and 
Bedok whom AsiaOne spoke to were unaware of what the scheme entails.

Ang Mo Kio resident Claire Chiam said that she will consider the implications to her retirement nest if the Government offers to buy back her flat.

The 70-year-old retiree moved into the three-room flat on Ang Mo Kio Avenue 10 a year ago. It was built in 1978.

“I don’t know what’s the arrangement, I hope it will not be like Sers (Selective En bloc Redevelopment Scheme) where the residents there still have to cough up cash to buy (a) similar-sized flat. And there were people not happy about it,” Chiam said.

“Unless it is for downgrading, old people like us don’t have that much cash and CPF already.”

Unlike Sers, Vers is voluntary where residents will vote on whether the project goes ahead.

In his interview, Chee said that the compensation terms for Vers will be less generous than those chosen under Sers, as the flats chosen will be older, and hence, less money.

One Bedok resident, who wanted to be known as Tang, said she will be looking at the replacement homes offered before making a decision.

“If they are further from where I live right now, it will be at a disadvantage,” said the 63-year-old part-time retail assistant.

Speaking to AsiaOne, Eugene Lim, key executive officer of ERA Singapore, said that implementing Vers is a “significant undertaking” that requires “sensitivity and prudence”.

”There are also concerns that compensation could be lower than under Sers. Therefore, this could lead to some older owners having to weigh the affordability of replacement homes carefully, and as a result, they may be reluctant to participate in Vers,” he said.

”This could, in turn, dampen participation and increase its complexity.”

Since flats built in the 70s would have natural wear and tear that can make living conditions less attractive and comfortable, Lim said that these owners will be hoping that their blocks are identified for Vers.

Chee said that several older estates were rapidly built in the 1970s and 1980s to meet the urgent housing demand.

According to ERA Singapore, 356 blocks were built in Ang Mo Kio during this period, and about 39,600 new flats were sold by HDB then.

In Bedok, 419 blocks were completed, with about 47,000 new flats sold.

In the 1980s, 494 blocks were built in Tampines and 487 blocks in Yishun. In each town, more than 40,000 new units were sold.

Lim said that offering incentives, such as giving flat owners priority in selecting a replacement home within their current location, could lead to higher take ups for Vers.

But Ang Mo Kio resident Ng Kim Wan said that the decaying lease of his 40-year-old flat is not an issue, and would rather stay there until the end of his life.

The 75-year-old retiree said: “Vers is good for the younger home owners to get a flat with a longer lease. It’s not for older folks whose children are not living with us.

“I will have to adapt to living in a new flat, a new environment. And where can I find the money for renovation and furniture?”

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chingshijie@asiaone.com