06 Jun '11, 4pm

The coming S$270 billion bailout

Renewing leases is definitely one option, but as and others said below, most HDB blocks will be unlikely to remain sound for that long. This is a theoretical solution that is not practical. The cost of maintaining an aging building will be very high. Also, renewing leases come with notional costs. If the lease renewal is given out free of charge, there is the value of the new 99-year term foregone. Another is the opportunity cost of building a taller block on the same piece of land, housing more people, reaping more sales revenue to HDB. Accountants will be able to put a value to the renewed lease, and that value will either be borne by the government as a gift to the existing residents (in which case residents elsewhere will cry foul), or that value will be imposed on residents as the price for renewing their leases. In that case, what if (some of) the residents don’t agr...

Full article: http://yawningbread.wordpress.com/2011/04/06/the-coming-s...

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