TO Repossess or not

I read with great interest when I saw the headline in the Sun newspaper on Thursday 9th June news. It said that "the Selangor government is studying whether to repossess low-cost housing units that have been given to ineligible owners or occupied by errant tenant".

The study came in after the Penang government had repossessed 154 flat units in eight public housing projects since last year after the tenant breached terms and conditions mainly due to arrears. OK that's fair - my initial thought. Then I realised.. this is a "public housing" for God sake.. the intention is to provide roof to the "don't have" of the society.. a place where they can proudly say "it's my home".  Though I can understand the economic reasoning behind the move but I hope that the authority will also try to understand the cause for their "inability" to pay the rent first before taking such big step. This part of social welfare is inherited once you become a GOVERNMENT!

On average.. a "public house" rent is about RM50 - RM150 - extremely cheap for many of us. However, the people living there is non-other than the neglected.. the OKU.. senior citizens.. single parents etc. Some of them does not even have any income and lives under the social welfare purview such as zakat.. donation.. etc.. so RM50-150 means the world to them - it means whether there will be food on the table.. it means whether they can afford the medicine supply for the month. Thus, economic criteria should not be a reason for kicking a family out (in this case 154 families) unless the government have enough evidence that these 154 families are "undeserving" families to be provided with such subsidies and helps.

On the issues of "eligible owner".. I am still baffle on the "criteria" till this day. If the "policy" were taken on face value.. probably most of the low cost owner now is consider "ineligible" as majority of them through hard work and dedication manage to come out of the poverty cocoon. 

Nonetheless, I totally agree with the concept that the "public housing" cannot be sold to anyone with a household income of more than RM2500 above. It is also a good practice by the government to give priority on the low-cost flat / house to low income earner. It is a known fact that a low-cost unit is sold at RM35K or about RM70K for the low cost house at launching. The problem is that.. the policy is often rape and abuse by those in power by taking up these flats for own benefits! 

In addition.. as in any other property.. the price will increase as time goes by especially in the hot area. Is it fair for the family who purchase it initially not be able to sell it at market value and reap some benefit from their "investment"? If market forces were taken into account then how on earth will a family with a household income of RM2500 can afford to purchase this property over time (sub-sale)? These are 2 fundamentals issues need to be addressed and resolved by the government before it decide to repossess the property from the deemed ineligible owner. Base on current practice.. couple with the lack of enforcement.. the policy is only good on paper and any action taken by the government will no doubt cost much suffering to the people the government intent to assist in the first place. By the way.. the ineligible owner normally purchase the unit after submitting to certain government body (EXCO) for approval which include salary declaration - how then they become suddenly "ineligible" only GOD knows.

However, the above is not without any solution.. there are couple of policies that the government may introduce;

1. To subject the price of low cost house / flat on a cap value of its initial price i.e., RM35K. or RM70K whichever is relevant. This will discourage the greedy in power to acquire such properties especially through illegal means.

2. Following policy no 1, the initial owner who had progress in life and came out of poverty and wanted to sell the property can only sell the property back to the government. By doing this, the government can then select new "eligible" owner to purchase the house. This will save the government from the need to build new "public housing" project which could cost a bomb now days.

3. To cap the rental rate of these type of property in line with the "public housing" rate. This will discourage the "ineligible" owner to rent out the property and definitely will shy away all the potential investor who look for rental yield in such property (me include).

4. Laws need to be passed to ensure that only certain categories of people can purchase this property (I was informed that currently it is more a policy rather than embedded in legislation on the eligibility criteria - no wonder a lot of abuses). Nonetheless, the criteria should be reviewed every 2 years to ensure that the decisive factor is in line with the present economic situation.

5. Most importantly.. enforcement need to be in placed and this should include hefty fine if the "ineligible" owner acquire the property through illegal means.

Many will argue the rationale of the suggestions.. but hey.. its my personal opinion on the basis that the property was build to HELP certain category of society.. I believe it is a noble thing to do that once a person who gained benefit through this scheme and had progress in life.. he should then offer the same HELP by "returning" back the property without any economic gains so that the property can be used to HELP others as well. In addition.. this may be the best way to curb speculative buying on low cost house / flat and thus denying the needy the right to HOME in their own country...

p/s

Bad thing about the above suggestion is that it will definitely effect my own investment strategy.. kacau jiwa gua dowwllll