TEAMWORK: ‘Cooperation needed to fast-track programme’
KUALA LUMPUR: THE 1Malaysia People’s Housing Programme (PR1MA) was borne under the PR1MA Act 2012 with several key delivery models underlined in its implementation, one of which was an effective public-private partnership.
“When PR1MA was formed, the prime minister told me personally that we needed to get private developers on board,” said PR1MA Bhd’s chief executive officer Datuk Abdul Mutalib Alias.
“This was reflected in the first mandate we received from the government under the 2013 Budget, which was for PR1MA to build 50,000 homes by sourcing land from the Federal or state governments, government agencies, and government-linked companies, while 30,000 more units would be built by private developers.
“The 80,000 units is equivalent to the total industry output for a year, which is not easy. We need further cooperation with private developers to fast-track the programme.”
The partnership would involve private developers allocating a portion of land identified for development to PRIMA, which would then provide facilitation funds to the developers and sell the homes at 20 per cent below market prices.
Private developers would also be involved in concept designs for the homes, as is the case for ongoing PR1MA developments in areas like Setapak (Kuala Lumpur), Nusajaya and Larkin both in Johor.
PR1MA Bhd operates on a non-profit basis with the sole aim of delivering affordable homes to the rakyat in strategic urban areas with a heavy demand, Mutalib said.
He said the group suffering most from the hike in property prices was middle income earners, as there was a huge gap in assistance for this “sandwich group”.
“The housing needs of low income earners has been addressed over the years by government-aided housing programmes such as Skim Pinjaman Perumahan and Rumah Mesra Rakyat, while the high income group are able to afford high-end properties determined by market forces.
“In between, there is a 50 per cent segment of the population who require more government-backed initiatives to close their housing affordability gap.
“This is where PR1MA comes in,” he said during a recent talk on “Affordable Housing” for Business Times’ Insight Series.
Mutalib said PR1MA was prepared to facilitate a process where some of the conditions imposed on private developers were flushed out in return for jointly developed projects.
“We can negotiate waivers or exemptions for the compliance costs faced by private developers, besides helping with expediting approvals for these projects.”
This comes after calls from private developers for a more “level playing field”, as the heavy costs were proving a major hindrance for them to build more low cost and affordable homes.
Real Estate and Housing Developers Association president Datuk Michael Yam Kong Choy said private developers had to navigate the rough waters between fulfilling the cost conditions imposed upon them by the authorities and ensuring a healthy return of investment for their shareholders.
“The low-cost housing requirement of 30 per cent is a standard prescription for all development approvals in Malaysia today.
“Just like SMEs and other companies, we understand the need for corporate social responsibility, but the agenda for housing should be borne largely by the nation.”
He commended the role of PR1MA and welcomed a sit-down to discuss how best both parties could proceed.
Glomac Bhd’s group managing director Datuk Fateh Iskandar Mohamed Mansor said private developers needed to consider three elements when committing to a development project, namely the rising cost of land, high construction costs, and contribution costs owed to utilities companies and most recently, state governments.
“In Selangor, for example, there is a new Akta Kemajuan 2010 which requires developers to pay a difference of 30 per cent from the day a land is purchased until it is completed.
“These are some of the main reasons property prices are rising. The assumption that property developers make a lot of profit is mere perception,” he said.
Fateh commended the Federal government for setting up PR1MA, but said it would not be able to achieve its targets on its own, especially not when there was a need for one million new homes in Greater KL alone within the next seven years to address the increasing urban population.
FIABCI Asia-Pacific chairman Datuk Alan Tong Kok Mau said a better public transport system would allow developers to focus on localities beyond urban centres.
“If we can reduce the travelling from home to work, there are many localities to build affordable homes in.
“People would also be willing to live there as the cost of living would be lower.”
