Selangor mulls new guidelines for serviced apartments

SHAH ALAM: Developers of serviced apartments in Selangor may need to allocate a certain percentage of units as affordable homes, according to the Selangor Housing and Property Board (LPHS).
In an interview with SunBiz recently, executive director Norzaton Aini Mohd Kassim said LPHS is studying new guidelines for serviced apartments, which explains the notice of a freeze in approving new serviced apartment projects, include small office home offices (SOHOs) and small office versatile offices (SOVOs) for the first half of the year. 
The notice was sent out to all Real Estate and Housing Developers' Association Malaysia (Rehda) members in the state in early March.
Norzaton stressed that the move was not meant to curb property projects within the state, but to take the current opportunity of slowing property market to revise some regulations.
She said the temporary impact on the industry is minimal as there were only four serviced apartment/SOHO/SOVO applications received in the first quarter of the year.
"We've developers that have done this in residential areas, where a unit can cost up to RM1 million but at the same time with affordable units costing only RM250,000 each. Of course, the unit size, finishing will be different. This was done in Rumah Selangorku ... this shows it's not impossible for it to be done in residential areas.
"We've to discuss the percentage of affordable homes, we'll try to get at least a certain percentage for Rumah Selangorku," she said.
Norzaton said they may also make it compulsory for serviced apartment developers to build "minimal amenities" such as kindergartens and playgrounds, which have been lacking in such property developments in the country thus far.
Nevertheless, the new property guidelines are pending finalisation and are expected to be announced by the end of June.
"We're studying the new guidelines, but we cannot reveal them until we meet with Jabatan Perancangan Bandar dan Desa (Town and Country Planning Department), Rehda and the state," she noted.
As a "free market", Norzaton stressed, the government cannot simply put on hold the approval of new property projects. Instead it should be fully determined by market forces of supply and demand.
From 2010 till now, she said, the state government has approved 73,000 units of affordable houses, of which 16,000 units are under construction. The rest are being closely monitored with land issues to be resolved.
The ceiling price for affordable homes in Selangor is RM250,000, lower than the RM400,000 under the 1Malaysia People's Housing Programme (PR1MA).
Commenting on difficulty in obtaining housing loans, Norzaton said LPHS has been requesting the central bank to relax the criteria when it comes to first-time home buyers.
"We do send requests to Bank Negara to review the regulations, especially for first-time home buyers," she said.
To lower the entry level for first-time home buyers, she opined that the debt servicing ratio (DSR) should be based on gross income and not net income considering that income level is quite low. Ideally, the DSR should be capped at 40%, she added.
Norzaton said LPHS has also proposed to the government to set up new satellite cities, especially in the northern region of Selangor such as Kuala Selangor, to avoid too many people staying in the Klang Valley.
"If you expect seven million people in the Klang Valley in 2020, it will be very messy. We suggest the government build satellite towns surrounding the Klang Valley. If you have these satellite towns with good economic development, who will want to come to the Klang Valley with traffic jam?" she asked.