KUALA LUMPUR, Oct 25 — Putrajaya may subsidise private developers should they fail to collect the targeted amount of rent for homes to be built for youths with fixed jobs, Tan Sri Noh Omar said today.
The local government and housing minister said the initiative was part of the Budget 2017 programme announced last Friday in which private developers will build, manage and collect rents for the houses, with a government guarantee of a fixed return.
“Let's say if the return should be RM3 million a year, and they only get RM2.5 million, then maybe the government will top up,” he told a press conference after launching the Ceylon business and residential suites on Jalan Yap Kwan Seng here.
"They will manage it, they will also be the one to collect the rent. You can't have the government collecting rents or that will be a problem," he said when asked how the government planned to ensure that tenants meet their rental obligation.
Prime Minister Datuk Seri Najib Razak said when tabling Budget 17 that the government will build 10,000 homes in strategic urban areas for rental to youths with permanent jobs, including young graduates entering job market.
The initiative is meant to address the complaints regarding the lack of affordable housing, a crucial problem that will likely be a key campaigning issue for Najib in the upcoming general election, observers say.
Noh said they the first project will be developed in Mukim Batu here, consisting of 4,000 units.
The initiative will follow the build-lease-transfer system where the houses will be handed over to the government once return targets are met.
Rent will be determined by the federal government.
“We want the private developers and we are inviting them to help,” he said.
The absence of enforcement laws to ensure tenants pay rent will likely trigger concerns that taxpayers could be subsidising the programme in the long run.
Some of the state's public housing (PPR) projects are already facing serious funding problems due to tenants' failure to pay rent,that is use to maintain the flats..
Malay Mail Online recently highlighted some of the issues in its special report.
Noh did not state if the government plans to enact laws to give developers power to evict tenants who fail to pay rent for the proposed rental homes.
