Housing Development Board Govt faced two conflicting problems with HDB lease decay
The govt faces two conflicting problems with the HDB lease decay. if they do not understand the contradiction, they cannot find a solution.

What is this contradiction?

The existing owners want to preserve the value of their HDB flats, especially if they have paid a high price for them. The younger citizens do not want to pay a high price for the HDB flat, when they know that it is no longer an investment and will have no value at the end of the lease.

How can the govt solve this contradiction? Should they keep the HDB prices high or allow it to drop?

My solution is out of the box!

The govt should adopt the following measures to allow the HDB flats to preserve its value for the remainder of the lease. 

a) Allow the unrestricted use of CPF savings to pay for mortgages below 60 years. 
b) Buy back old flats at a fair valuation, and not a depressed valuation due to weak demand
c) Allow expiring leases to be renewed for 10 to 30 years by paying a lease renewal premium.

What about the interest of the younger citizens?

I suggest the following:

a) Allow them to rent a HDB flat and to opt out of contributing to CPF from their salaries (but the employer should still contribute).
b) The rental should enjoy the same subsidy given to buyers (estimated to be 20% from market).
c) They can still buy new HDB or resale HDB flats using the govt grants.

These measures will also free up the HDB market and allow it to be used more efficiently. It might even encourage young people to get married earlier, i.e. as they have the option to rent a subsidized HDB flat, and improve the birth rate.

I hope that the above measures will help to find a solution to the HDB lease decay issue and generally improve the prospects for young citizens.

Tan Kin Lian

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