KUALA LUMPUR, Feb 9 2018 : The provision of affordable homes remains a major problem among policymakers worldwide, with Malaysia being no exception, said Khazanah Research Institute (KRI).
Its research director, Dr Suraya Ismail, said Malaysia’s policy initiatives, which focused on ensuring affordable housing, had typically involved the transfer of physical or financial resources to low-income households who could not house themselves adequately.
“The scarcity of such resources would then force the government housing agencies to focus on a small and limited housing agenda and stymy efforts to understand or manage the housing sector as a whole,” she said in a statement today, released in conjunction with the Ninth Session of the World Urban Forum (WUF9).
The WUF 9, from Feb 7-13, had featured a talk hosted by the KRI, themed ‘Making Housing Affordable: Developers or Government to Play a Bigger Role?’, which analysed the problems of supplying affordable houses from the perspectives of both an institutional arrangement (national business system) and the firms (industry value chain analysis and the economics of governance).
Suraya said as Malaysia became more urbanised, the demand for affordable housing would increase.
She said the trend indicated that both the bottom 40 per cent and middle 40 per cent of income earners were likely to require some form of social housing if the relevant interventions were not made urgently.
Interventions in the housing market had largely been on the demand side, by making housing financing cheaper or providing subsidies for home-buyers, she said.
“‘Sophisticated/innovative financing packages and cash transfers are provided to home-buyers to buy houses they could not afford and the interventions on the supply side have been by direct provision of low-cost houses or subsidising housing costs,” Suraya said.
She said these measures were unsustainable as they could drive price increases, resulting in more household debts and incur opportunity costs on government finances that could potentially be used more productively.
“Current policies have focused on controlling house prices once the consumer receives it at the end of the production process.
“Our policy options proceeded differently because the evidence seems to suggest that it is far more efficient to enhance capacity in the supply side to develop a sustainable and responsive housing sector that caters for all sections of the population,” she said.
WUF9 focuses on the implementation of the New Urban Agenda adopted in 2016 as it was an instrumental platform to substantively feed into the inputs for the first report of the implementation of the New Urban Agenda. – Bernama