69. Mr Foo Cexiang: To ask the Minister for National Development (a) whether the Ministry’s plan to only select certain HDB precincts for Voluntary Early Redevelopment Scheme (VERS) will result in VERS having a lottery effect; and (b) whether the Ministry can design VERS to apply to all HDB flats. 

126. Mr Andre Low: To ask the Minister for National Development (a) how does the Ministry define and quantify the less generous compensation terms of VERS as compared to SERS particularly in relation to a flat’s market value; (b) what safeguards will protect homeowners whose VERS compensation could be lower than their outstanding mortgage; and (c) what is the projected median cash top-up required for displaced households to secure replacement housing. 

194. Mr Andre Low: To ask the Minister for National Development (a) what is the primary policy rationale for compensation under VERS being less generous than SERS; (b) how does the shift away from the SERS lottery effect support the goal of long-term housing affordability; and (c) what assurance can the Ministry provide that VERS will primarily serve as an orderly renewal programme and not a wealth-generating one. 

178. Mr Andre Low: To ask the Minister for National Development (a) what specific voting threshold is being considered to approve a Voluntary Early Redevelopment Scheme (VERS) exercise; and (b) what specific resources will HDB provide to manage community disputes that may arise during the VERS voting process. 

Answer: 

Mr Speaker, may I have your permission to answer questions 5 to 7 together?  My reply will also address a related question (52) by Mr Andre Low for written answer. 

Ensuring Ageing Flats And Estates Remain Liveable and Vibrant 

Starting from the late 2030s, we will start to see more HDB flats reach the 70-year mark of their 99-year leases. We will adopt a multi-pronged approach to keep our older flats and estates liveable and vibrant.  

First, we will upgrade the ageing flats to ensure their safety and liveability. These older flats would have already benefitted from one round of upgrades under the previous Main Upgrading Programme, or the current Home Improvement Programme (HIP) for flats that have passed the 30-year mark. We plan to introduce a second round of upgrades via HIP II for flats which pass the 60-year mark. HIP II will ensure that our older flats are able to last the flat owners till the end of their 99-year lease. 

Besides the flats, HDB will also upgrade our older estates and neighbourhoods, through programmes such as the Neighbourhood Renewal Programme and Silver Upgrading Programme. We will ensure that residents who are staying in older estates can continue to enjoy a vibrant neighbourhood with refreshed facilities and greenery.  

Complementing these efforts is the Voluntary Early Redevelopment Scheme or VERS.  The primary purpose of VERS is to facilitate the orderly redevelopment of ageing estates, by spacing out the redevelopment and construction works in towns where there are many older blocks that were built around the same time.    

As I explained in a recent media interview, VERS is a complex policy and a long-term multi-generational undertaking for our society. It will impact existing flat owners and future generations of Singaporeans, so the policy must be designed carefully to be fair and sustainable for both groups. We aim to firm up as many of the policy details as possible during this term of Government.  After we have established the VERS framework and parameters, we can then start with a few selected sites, likely in the first half of the next decade. We will continually review our processes as we go along and progressively scale up the VERS programme by the late 2030s, when more HDB flats reach their 70-year mark.   

Key Considerations About VERS 

While the details of the scheme are still being firmed up, I would like to highlight three key considerations which I hope we can have broad agreement on from both sides of the House. 

First, in managing ageing flats and estates, our first priority is to ensure that Singaporeans have a home for life. Today, about 2.5% of HDB households do not own flats that cover the owners to at least age 95. The current median lifespan of Singaporeans is 84. Hence, almost all our HDB households own flats with leases that can cover the owners for life. We will continue to closely monitor the proportion of HDB households who do not own flats with sufficient duration of leases that can cover the owners to their end of life, and keep this number as small as possible.   

Second, the primary purpose of VERS is to facilitate the orderly redevelopment of towns where many older flats were built within short periods of time.  This will allow redevelopment works to be carried out in phases within such towns, which would be less disruptive to residents and heartland businesses.  Based on this approach, it is not necessary for every older flat to go through VERS, as we are mindful of the disruption to our residents who would need to relocate when their flats undergo VERS. In addition, VERS is voluntary, so there could be instances where residents who are offered VERS collectively decide not to proceed. 

For residents who do not go through VERS, they can continue to stay in their flats until the leases run out. The Government will support them in other ways to keep their flats and estates liveable and vibrant, including through upgrading programmes like HIP II, Silver Upgrading Programme, and Neighbourhood Renewal Programme, which I spoke about earlier. This area of work is an important part of our review, as we want to look after residents who go through VERS and also those who do not go through VERS.    

Third, HDB flats are sold with 99-year leases. A leasehold system ensures fairness to future generations. After 99 years, the land is returned to the State, and we can recycle it to build new homes for future generations. This approach allows our current generation to enjoy a diverse range of affordable and accessible housing, while also taking care of the needs of future generations. It improves inter-generational mobility and prevents our society from being split into property owners and those who are not.  

Mr Low asked about how the VERS package would differ from the Selective En bloc Redevelopment Scheme (SERS) package. We had explained previously that VERS and SERS have different objectives. SERS is for selected precincts with high redevelopment potential, unlocked through compulsory acquisition. In contrast, VERS is to space out the redevelopment of older towns over time and will be voluntary in nature. Flats offered VERS will have shorter remaining leases compared to the flats which were previously offered SERS, so the overall compensation for VERS flats would be lower compared to SERS. 

Based on the questions from Mr Foo and Mr Low, I note there is broad agreement from both sides of the House that VERS should not create a ‘lottery effect’ or end up becoming a ‘wealth generating’ programme. I agree with these views from both Members.   

MND is working out the details of the compensation package. Just as how the valuation of flats varies today, the compensation amount would similarly vary across different VERS sites and flats. We are also studying details such as the voting process and how to support the various demographic groups across different VERS sites with relocation options.  

MND and HDB will engage Singaporeans on the framework and policy parameters when we are ready with the draft proposals, to take in further views and feedback before we finalise the policy and implementation details.