The Selangor Housing and Property Board (LPHS) has unveiled a new set of guidelines requiring property developers to set aside up to 30 percent of affordable units for their boutique office and serviced apartment projects.
According to executive director Norzaton Aini Mohd Kassim, developers who build small office home offices (SOHO), small office versatile offices (SOVO), small office flexible offices (SOFO) and serviced apartments are required to allocate 10 percent for affordable units for projects with 500 units and below, 15 percent for those with 501 to 1,000 units and 20 percent for those with over 1,000 units.
For transit-oriented development areas, the allocations for SOHO and serviced apartments will be higher at 20 to 30 percent.
Transit-oriented developments are areas with light rail transit, mass rapid transit or bus rapid transit stations within a 400-metre radius.
Effective 1 September, selling prices for affordable SOHO/SOVO/SOFO and serviced apartments are capped at RM230,000 and RM270,000 respectively.
Since these are controlled prices, no discounts will be given to bumiputras acquiring SOHO/SOVO/SOFO and serviced apartments as the prices are already subsidised by property developers through the non-affordable units.
Nonetheless, there will be a difference in furnishings for non-affordable and affordable units, said Norzaton.
The SOHO/SOVO/SOFO and serviced apartments will have a minimum unit size of 450 sq ft and 550 sq ft respectively.
“We don’t care how big or small they are (non-affordable units), but the size of affordable ones must be 450 and 550 square feet,” stated Norzaton.
She noted that the new guidelines are different from the Rumah Selangorku scheme. Those within the RM10,000 household income bracket are eligible under Rumah Selangorku, while the new guidelines caters to those with household income of up to RM15,000. However, both schemes are for first-time home buyers only.
Having affordable units at property projects is not new in Selangor since residential projects have been observing it for years with an allocation of around 30 percent, depending on locality, said Norzaton.
Developers will also have to observe the bumiputra quotas of between 30 and 70 percent, with the local council concerned having the final say on the percentage allocation.
Applications for affordable units will have to be made via LPHS. Developers who refuse to sell affordable commercial boutique/apartments to buyers approved by LPHS will be fined 10 percent of the selling price. They will also pay an additional five percent if they fail to follow the bumiputra quota.
Buyers can sell the units only after five years from taking vacant possession.
Norzaton revealed that the new guidelines follows the discussions by LPHS with the Real Estate and Housing Developers’ Association Malaysia (Rehda) in the last few months.
“They might be a little bit unhappy with the price cap as Rehda had expected RM300,000 for serviced apartments, but at the end they’re still okay,” she said, adding that the new rules will only impact developers’ earnings by around two to three percent.
Rehda Selangor Branch chairman Zulkifly Garib said the new guidelines will affect project planning and bottom lines. “However, we can only advise on the extent once we’ve studied the full set of guidelines,” he said.
Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my
