Khir Toyo's idea some time ago of getting people to buy low-cost houses and then to rent them out at below the market rate was so silly, I just do not even know where to begin. It is so detached from reality that I have to offer some suggestions.

Actually, subsidised housing is a very tricky problem. There are very few successful subsidised housing programmes. The most famous exception is Singapore and to a lesser extent, Hong Kong.

However, both of these schemes are based on certain fundamentals like a high degree of control over land supply, an efficient civil service, etc. Even more important is a growing free economy and rising income of residents.

All successful models overwhelmingly emphasised ownership over rental because rental of low-cost housing is very problematic. Hence my suggestion which is - do not stop from emphasising ownership.

If one looks at the issue carefully, the problem is not that low-cost housing will not sell but that those in poor locations will not sell. Most of the low-cost housing that will not sell is located in areas where public services are poor, particularly public transportation.

Low-cost housing near good bus routes seldom has a selling problem. In fact even housing in very poor condition but near good transport lines rent out at exorbitant prices to poor people.

The bottom line is that people, even poor people, make rational economic decisions. They will not rent low-cost housing in areas that do not make economic sense. Even though the house may be extremely cheap, if transportation makes it harder to make a daily living, people will not buy it. Many will rather live in urban slums than wait long periods for buses.

My suggestion to the government is to help people to own houses and emphasise efficient public transportation. You will then find many low-cost housing problems solved.

If the government builds an LRT station at every major low-cost housing project, I guarantee you that there will not be any problem in the poor buying them. If this is not possible, then at least have a cheap and efficient feeder bus service linking these areas to LRT and railway stations.