Message for developers
31/03/2007 The Star

USE profits from higher-cost housing projects to subsidise the cost of building lower-cost units.

This is the message Penang Chief Minister Tan Sri Dr Koh Tsu Koon has for housing developers who have proposed that prices be increased for low-cost and low medium-cost housing units because of the higher cost of construction materials.

Dr Koh said it was important that such units remain affordable for the lower income group.

“I understand the rising costs of constructing such units but developers can always use the profits from their higher-cost projects to subsidise these low or low medium-cost units,” he said after attending a press conference at Mini-circuits Technologies Malaysia Sdn Bhd in Bayan Lepas yesterday.

However, Dr Koh said the state government had not turned down the proposal.

“We will be very careful in reviewing the proposal,” he said.

Real Estate and Housing Developers’ Association (Rehda) Penang branch chairman Datuk Jerry Chan Fook Sing had recently described the current prices of such units as “unrealistically low” and urged the state government to review them. He was quoted as saying that the price of a low-cost unit was last revised in 1998 and that of a low medium-cost unit in 2002, while prices of construction materials had increased between 40% and 70% in recent years.

Dr Koh said Rehda should discuss the matter with state Housing, Culture, Arts and Heritage Committee chairman Syed Ameruddin Syed Ahmad.