If Malaysia’s goal of delivering adequate affordable housing options to the Rakyat is to be attained, the country must foster more diverse collaborative partnerships to get the job done, says Bank Negara Malaysia (BNM).
The central bank said that this would include the participation of a vibrant business community of social housing enterprises, private foundations and non-profit organisations that support or complement the government’s housing agenda.
Deputy Governor of BNM, Shaik Abdul Rasheed Abdul Ghaffour, said such collaborations have been instrumental in encouraging the development of a vibrant rental market as a viable alternative to house ownership.
As an example, he cited Australia and Hong Kong, where social enterprises have had an important role in building affordable housing units or revitalising existing properties for sale or rent – typically targeted at lower-income groups.
Similarly, such models could be developed here and we need to look at the creation of public policy that would enable this.
“In the context of rental properties, a robust legal and institutional framework to safeguard the rights of tenants and landlords, mechanism to protect tenancy deposits, and arrangements for dispute resolution have been key success factors for countries that have a thriving rental market,” Shaik Abdul Rasheed said.
Based on 2014 data, he added that the shortfall in affordable housing is estimated to be at 960,000 units. This could rise to one million units by 2020 if measures are not taken to increase supply of affordable houses and improve affordability.
He said the introduction of government-driven rent-to-own schemes could also complement the overall effort.
“We welcome the private sector, particularly developers, to also explore such a strategy,” said Shaik Abdul Rasheed, adding that sound, innovative and coordinated public policy is central to addressing the affordable housing challenge.
He explained that innovative financing models to fund affordable housing projects should also be further developed as current intervention measures are largely focused on subsidising house buyers or the direct provision of housing.
Over the longer term, he said, these would need to be complemented by new and more sustainable alternatives that combine public and private funding for affordable housing development and investment.
Shaik Abdul Rasheed pointed out that public-private partnerships through joint-ventures have replaced traditional methods of financing in other parts of the world, supplanting traditional methods of financing for the supply of public housing.
“Public funding could also be deployed more efficiently to crowd in private capital for affordable housing developments, for example, by providing cost-efficient funding to institutions that finance affordable housing projects,” he said.