It is very challenging to build affordable homes

Too pricey: Ahmad Phesal showing a model of a RUMAWIP scheme displayed at DBKL building. Most urban poor cannot afford PPR flats let alone these units.

Kuala Lumpur City Hall (DBKL) is facing a challenging time to deliver affordable housing to low-income earners as it is no longer cost-effective, said mayor Datuk Seri Ahmad Phesal Talib.

He said the public could not expect DBKL to utilise funds in housing projects that would not generate income for the local authority.

“If we were to build a low-cost housing project today it would cost us between RM200mil to RM300mil for just one housing project.

“Even if we rent it out at RM250 a month, it would take more than a decade to get the returns from the investment,’’ he said.

Ahmad Phesal was commenting on the affordable housing crisis in the city and the many joint-venture projects and land swap deals DBKL had embarked on with developers to redevelop old government housing schemes in the city and build public facilities.

Ahmad Phesal said that entering into joint-venture agreements/land swap deals with developers by increasing plot ratio and density was the only way to get developers to build affordable housing for the residents and to leverage on the percentage of units (affordable housing).

“We used the same arrangement with PPA1M (The 1Malaysia Civil Servants Housing Programme) launched recently by the Prime Minister in Bukit Jalil.

“We cannot force them (developers) to build housing for the poor without giving them certain incentives,’’ he sad.

PPA1M is a government-initiated public-private partnership project using the cross-subsidy method. Middle and lower income civil servants are sold affordable and quality houses ranging between RM150,000 and RM300,000 per unit, depending on the size of the built-up area.

In March, former Federal Territories Minister, Tan Sri Zulhasnan Rafique criticised DBKL for developing a 11.3ha of prime land belonging to DBKL in Setapak through a joint venture/land swap deal that had seen the size reduced to a mere 3.8ha.

The balance 7.5ha would be used to build a high-end mixed development project with a gross development value worth millions.

Last year, Cheras MP Tan Kok Wai highlighted that DBKL had been disposing prime plots through joint venture deals that were not benefiting the poor.

He said the deals were not made through open tender and there were existing facilities on the land.

Tan cited the velodrome in Cheras, DBKL’s Health, Engineering and Mechanical departments in Jalan Cheras and another plot along Jalan Pinang.

Federal Territories Minister Datuk Seri Tengku Adnan Tengku Mansor told StarMetro in March that the Public-Private Partnership Unit (Ukas) under the Prime Minister’s Department was currently in negotiations with developer for a proposed mixed development on a 3.97ha land that was currently home to 8,000 residents living below the poverty belt.

The land, which currently housed the PPR Sri Pahang in Bangsar, was built 40 years ago for the poor.

Tengku Adnan said the developer would have to do some cross subsidy to enable the units to be resold to the residents at an affordable price.

“We are trying very hard to persuade them to give us back the units at cost price.

“We will allow them to build expensive units too but we will retain a percentage of the units as low cost units,’’ he said. - By The Star