New sandwich class housing law approved in first reading

The new law aiming to establish a new type of publicly built housing dedicated to those who cannot apply for economic housing options for exceeding the income requirements, but also cannot reach a unit on the private market, commonly known as “sandwich class”, has been finally approved by the majority of the lawmakers at the Legislative Assembly (AL).

In a plenary session held yesterday, all lawmakers except Ron Lam voted in favor of the bill to establish the long-awaited new type of public housing.

While presenting the bill to the lawmakers, the Secretary for Transport and Public Works, Raimundo do Rosário, said this type of housing will follow standards similar those for the private sector except for some requirements related to car parking.

He also explained that, contrary to other types of public housing, units acquired by residents under this new scheme will be able to be resold, although this comes with extra rules, namely a blackout period of 16 years from the time of acquisition, and the requirement that these units’ ownership can only be transferred to another Macau permanent resident.

The rules also stipulate a minimum age of 23 years for applicants if they are single, and 18 years if they are married.

Candidates who fulfill the age, income, and assets requirements can opt for the acquisition of a one-bedroom, two-bedroom, or three-bedroom unit according to their interest and purchasing power.

All future applications for this type of housing will be done exclusively online, Rosário said, noting that such efforts come under the electronic government bid system as well as to accelerate the process of generating the order lists that will be done in a point scale, as for the other types of public housing.

For the time being, the list will not be permanent, expiring after all units have been sold from a given tender.

One of the novelties this new type of housing introduces is a new fund of 2% of the value (cost of construction) of the building, which can only be used for major repair works, renovation or fixing of the main equipment of the building.

The Secretary said this comes after the constant evaluation and suggestion of lawmakers to enforce a system that allows unit buyers to solve high-scale maintenance issues that can arise after a few years of using the building more efficiently. This fund will be created with the support of the Monetary Authority of Macao and, to use it, the building owners or the management company must have prior authorization from the Public Works department.

Price of units a major concern

One of the major concerns expressed by the lawmakers on this topic was about the selling price of the units, with several lawmakers calling on the government side to provide them with an idea of the cost of each square meter in one of these types of housing units, which for the time being, are to be built only at Avenida do Wai Long, in the land plots of the former La Scala development.

Rosário refused to respond to the question saying, “it is too early to define such a price,” adding that it is still a long time until the units will be ready and several factors could still influence the final price.

He also said the sale price will be established via an order by the Chief Executive at a later stage, so it does not have to be defined in the law.

Others, like Leong Sun Iok, wanted the government to collect information on housing typologies before building them so the government could adjust the offer to be made on the residential towers to market demand, avoiding having units for which there is no demand and which cannot be sold.

On the other hand, Ella Lei said the law advances very little when compared with the economic housing rules, being, in some aspects, less evolved. Ron Lam said the bill is at the level of the economic housing scheme from 2011 that has been already updated.

“There is no articulation with the market as those who applied for economic housing cannot apply for this. Some had previously acquired a one-bedroom apartment, but now they might need a bigger house and they cannot be considered,” Ella Lei said, calling, as other lawmakers also did, for an interlinked system that allows residents to opt for different public housing units at different times in the now five-level system that includes the economic rental, economic acquisition, elderly residences, and sandwich class, as well as the private market.

Blackout period too long?

Another criticism aimed at this bill was regarding the blackout period of 16 years for a unit to be able to be resold. Several lawmakers protested against this provision, comparing it to the neighboring region of HK where this period is only five years.

Several lawmakers suggested changes ranging from five to 10 years, instead of the 16 defined by the bill. This matter will continue to be a hot topic in the discussion on the new law, they said.

On this issue, Rosário said the government intends to ensure these houses are not used for speculation purposes.

Lam, the only lawmaker openly against the bill, accused the government of attempting to repress demand by establishing a minimum income limitation for the applications.

Lam said the government must change its mentality and stop trying through a disguised method to control the real estate market. In his vote declaration, he accused the government of lacking real housing policies and making use of this bill at this time as a way to control a higher drop in the value of the units in the private market.

In reply, Rosário justified the minimum ceilings for applications as concern over the inability of applicants to face the repayment of mortgages, a matter the lawmaker said does not fall under the competence of the Secretary for Transport and Public Works but on the economy and finance analysts.