Desaria flats in worsening condition.
KELANA Jaya MP Wong Chen is planning to set up a Special Purpose Vehicle (SPV) to acquire public housing and help the urban poor in Selangor.
The SPV is a long-term measure whereby abandoned housing units in urban poor areas are bought over, refurbished and rented out to the deserving.
He said that currently, speculators were making a lot of money from the poor.
“The market rate to purchase a low-cost unit is RM75,000 and the rental is RM500 per month for an average yield of 8% which is very high,” he added.
Wong said the SPV would have to buy the units in the open market and probably enter into a sales and purchase agreement with the tenants so they could eventually buy the property.
He said the value of the property would also go up, benefitting the tenants and eventual owners in the long run.
He added that a proposal on this would be submitted to Selangor Mentri Besar Tan Sri Khalid Ibrahim for approval soon.
Wong said the SPV would vet the applicants’ financial situation and ability to pay.
“There are people who have lived there for over 10 years paying RM500 in rental monthly and still do not own the property.
“This will be a social enterprise where the rental money can be pumped back into the organisation. The money can be used for maintenance purposes as well,” he added.
Wong has been studying the issue in three poverty-stricken areas namely Kampung Lindungan, Desaria and Desa Mentari in Seri Setia, which is in his constituency, with some 30,000 poor residents.
He believes the SPV will work in other areas facing urban poverty as well.
He opined that poverty was compounded by the poor health of residents living in such areas.
“The key to improving their lives is to ensure they are healthy enough to work. If the parents cannot work then there is no hope for the children,” he said.
He added that the presence of a mobile clinic in such areas would help improve the situation.
Wong said another problem was the presence of a large number of foreign tenants in low-cost flats.
“If foreigners make up more than 40% of the total population, the situation will worsen,’’ he said, adding the majority did not pay service charges leading to the breakdown of facilities such as lifts as there was little maintenance.