6 days ago
Yeoh Lam Keong calls VERS approach to HDB lease decay 'too little, too late'
Former GIC chief economist Yeoh Lam Keong has warned that Singapore's reliance on the Voluntary Early Redevelopment Scheme (VERS) to address the ageing of Housing and Development Board (HDB) flats risks leaving many households' retirement savings exposed.
In a Facebook post on 11 August 2025, Yeoh described the government's latest reforms under National Development Minister Chee Hong Tat as 'steps in the right direction' but ultimately insufficient.
He noted that for the bottom 50% of households, HDB flats constitute 80–90% of their net worth. By the time flats reach the 70-year lease mark and become eligible for VERS, much of their value would already have depreciated.
Yeoh cautioned that allowing this erosion of asset value could create a heavier long-term financial burden on the state in the form of increased income support for elderly citizens.
He suggested a more comprehensive approach: a guaranteed Selective En bloc Redevelopment Scheme (SERS) for all HDB estates, planned over 90–100 years. This, he argued, could be funded through an annual sinking fund and higher plot ratios for redeveloped mixed-use projects.
According to Yeoh, this proposal was detailed in a policy paper co-authored with architect Tay Kheng Soon and property consultant Ku Swee Yong, submitted to the Ministry of National Development (MND) and then-Finance Minister Lawrence Wong in November 2019.
The 2019 proposals
In their public housing paper, Addressing Singapore's Key Housing Problems: Asset Protection, Affordability and Access, the three experts proposed that HDB owners should be given an affordable, automatic one-time 99-year lease top-up after 50 years.
They argued that such a measure would immediately address the depreciation of older flats, while retaining state land ownership through the Singapore Land Authority.
Owners affected by redevelopment could be compensated with a flat of equivalent use value and location, mirroring current SERS provisions.
The paper suggested a base lease renewal fee of about 3% of the average market value of a resale flat—around S$15,000 for a 4-room flat or S$10,000 for a 3-room unit—payable over 10–15 years at no interest. Lower-income owners could be charged nominal fees as low as 10% of the guideline price.
Beyond the lease top-up, the authors proposed state-funded reconstruction of HDB flats every 100 years, citing structural concerns with reinforced concrete over long periods. Under this plan, owners would receive a new, sustainably designed flat with a fresh 99-year lease at no rebuilding cost.
The group also called for closer alignment of Build-To-Order and retirement flat prices to construction costs, as well as a sufficient stock of high-quality subsidised rental flats for the bottom 30% of income earners, especially in a volatile gig economy.
They argued that Singapore's large fiscal reserves, land ownership and past compulsory acquisitions made such reforms affordable and sustainable. Yeoh warned at the time that failing to act—'do nothing'—would invite a housing crisis in future decades.
Current government stance
VERS was first announced by Prime Minister Lee Hsien Loong during his National Day Rally speech in 2018 as a way to allow more HDB households to benefit from redevelopment before their 99-year leases expired.
Lease expiry had become a growing concern among homeowners, and then-National Development Minister Lawrence Wong revealed in a 2018 CNA interview that the government had been studying the matter since 2016.
However, despite this review period now spanning almost a decade, no detailed framework has been released. The CNA report this week, which ran extensively through Minister Chee Hong Tat's remarks, offered more context than content: timelines were provided, but concrete mechanisms — such as how sites will be chosen, exact compensation formulas, and financial modelling — remain absent.
Minister Chee said the framework will be finalised during the current government term, before September 2030, and that public engagement will be used to shape its parameters. In effect, after nearly nine years of discussion, the key features of VERS are still undecided.
The only confirmed points are that VERS will be rolled out in selected sites in the first half of the next decade, it will be voluntary rather than compulsory, and it will target flats at about 70 years of age — meaning residents are likely to receive less compensation than under SERS.
Chee stressed that redevelopment would be staged over two to three decades to avoid a housing crunch in the 2070s and 2080s, while HIP II would be used to keep 60–70-year-old flats liveable until lease expiry.
Yeoh's comments reflect broader public concerns that, despite the long lead time and repeated public references to VERS, the government still appears far from delivering a detailed, actionable policy to address lease decay and safeguard retirement security.
