Economist begs to differ on housing fund strategy

KUCHING: The recent proposition requiring housing developers to allocate 30 per cent of their housing scheme’s value to a trust fund has been met with criticism over its efficacy.

Centre for Market Education (CME) economist Carmelo Ferlito argued that this approach by the state government is an overreach into the complexities of the housing market.

“The government’s attempt to dictate the specifics of housing development — from location to pricing and quantity — overlooks the fundamental unpredictability of market needs.

 “This is why a lot of government projects don’t work out well,” he said.

Since 2016, the state policy has mandated private developers working on projects over 10 acres to dedicate up to 30 per cent of their units to affordable housing, preferably terraced houses.

This policy aimed at addressing the housing needs of the populace is now under scrutiny.

According to Ferlito, while the government possesses or can acquire technical expertise, it cannot fully grasp the constantly evolving nature of market demands.

He suggested that the housing market, like any other economic sector, is shaped by a multitude of individual choices and interactions, thus making centralised planning inherently flawed.

At the 30th Anniversary of the Sarawak Housing and Real Estate Developers’ Association (Sheda) Annual Dinner and Excellence Awards on Nov 25, Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg said that funds from the trust would facilitate the construction of more affordable housing meeting government standards.