07 November 2009

A country, a city, a garden or a hotel?

Things are getting "curiouser and curiouser", as Alice said in The Land of Oz ...

But it may go some way to explain why we are "Hotel Singapore Inc" (no longer "Singapore Inc") ...
  • why homes are commoditized for en bloc flipping ...

  • why the law technically provides for en bloc sale immediately upon issuance of Temporary Occupation Permit (viz, when owners take possession of their spanking new condominium/apartment unit) ...

  • why condos of 15-25 years of age are pulverized under a wrecker's ball despite flavour-of-the-day hype about Sustainable Development, bearing in mind that some of these condos were designed by renowned architects and some with still-stunning aesthetics as part of post-independent Singapore's modern architectural legacy ...

  • why our collective sense of community, of rootedess, of time and of space in our nascent nationhood are yanked out thoughtlessly and almost zealously ...

  • why ownership of a refrigerator made in Malaysia outlasts ownership of a condo unit built on Singapore island ...
In August 2009 around the time of our National Day celebration, we learned from Minister Mentor Lee Kuan Yew's response to NMP Viswa Sadasivan's high-falutin' maiden speech in Parliament that our National Pledge enshrines mere "aspirations". Uh-oh ...

Less than three months later, our Law Minister Mr K Shanmugam affirmed at the Q&A session of the New York State Bar Association (NYSBA) Rule of Law Plenary Session on 28 Oct 2009 that in fact "We are a city. We are not a country". Voila!

Oi, before you can finish uttering "Majullah Singapura", the powers-that-be may well say that we are possibly only a garden, and not even a city (much less the oft-touted "City In A Garden")!

Now, on a more serious note (ie, not so tongue-in-cheek, although I have absolutely no idea where else to store my tongue these days in the face of recent ministerial pronouncements), it was indeed thought-provoking to read Singapore Chief Justice Chan Sek Keong's keynote address at NYSBA's Annual Fall Meeting on 27 Oct 2009 that:

-- "rule of law simply means the supremacy of the law, without reference to whether the law is just or unjust";

-- "the Constitution declares that any law inconsistent with the Constitution is null and void but it does not expressly provide for a procedure for nullifying and voiding such law. But because the judicial power of Singapore is vested in the judiciary, the legislature and the executive have accepted the legitimacy of the courts to exercise this power";

-- "the courts have the power to review legislation and executive acts to determine whether they are unconstitutional. They also have the power to review executive acts to determine whether they are contrary to law. So long as the power of judicial review exists, the rule of law exists".

The speeches and events arising from NYSBA's Annual Fall Meeting have indeed made me "curiouser and curiouser" as to when has the Singapore Judiciary exercised its review powers, if at all? Surely, in our 44 years of nationhood, there would have been occasions, even if rare, on the assumption (and presumption) that we have the best of men and women with the kindest of intentions amongst the powers-that-be?

Now, we all know what curiosity eventually did to the cat! But do indulge me with some vocal room for plaintive meowing:
Who checks the checker when checker doesn't check?

Or maybe there is nothing to check? Or maybe the checks affirmed that everything was 100% A-OK at all times? Or maybe if something was a little askew at one time, the checker just had a quiet word with the checked and everything was straightened out pronto without we suckers being made any wiser. As the old sayings go: "Silence is golden"; "Ignorance is bliss"; "What you don't know won't hurt". Who am I to doubt such ancient wisdom, eh?

But, but, but ... now that we know our independent Judiciary has "the power to review legislation and executive acts to determine whether they are unconstitutional ... the power to review executive acts to determine whether they are contrary to law", perhaps they should exercise such judicial independence and their powers to review the Land Titles (Strata) Act, especially within the present context of "our own political, social and cultural values", as our Honourable Chief Justice puts it.

The proof of the pudding is in the eating. Such review would showcase the judicial independence that Singapore is trying so darn hard to convince all and sundry, especially after the International Bar Association Human Rights Institute Report of July 2008 entitled "Prosperity versus individual rights - Human rights, democracy and the rule of law in Singapore". http://www.ibanet.org/Human_Rights_Institute/Work_by_regions/Asia_Pacific/Singapore.aspxore.aspx

Perhaps, initiating a judicial review to "make an unjust law just" and also "do right by the people" may go some way to lend greater credence to Singapore's assertion of judicial independence.
In other words, a whiter-than-white exercise - without any punning intention on my part with the People's Action Party all-white party dress colour!

Over our 44 years of nationhood with 2nd and 3rd generational Singaporeans as present condo owners, how many more times are Singaporeans expected to sacrifice yet again in the name of our country (... errrr, city) (... ooops, garden) (... I mean, hotel)? [Whew, the cat nearly got my tongue!] This was the poser in para 6 of my previous blog entitled "A horse dumbstruck by a mutant 3-hump camel" dated 7 Oct 2009: http://singaporeenbloc.blogspot.com/2009/10/horse-dumbstruck-by-mutant-three-hump.htmlhump.html

QUESTION - Is this en bloc law:

(a) still "consistent with our Constitution", and
[L'est we forget - Do bear in mind that we are no longer demolishing slums nor building infrastructural/community facilities over the demolished condos under police powers for public safety or eminent domain powers for larger communal good.]

(b) not "contrary to law", and [Undoubtedly, an unjust law is still law. Ordinarily, the courts will justly dispense justice under unjust law. Now, would that make it "Just Injustice" or "Unjust Justice"??? Kind of comparable to the innocence of "1 + 1 makes 11", eh??? Ahhh ... but one should take heart from what the Chief Justice also said in the same NYSBA keynote address when he quoted a 1962 speech made by our founding father, Mr Lee Kuan Yew, to the University of Singapore Law Society: "Justice and fair play according to predetermined rules of law can be achieved within our situation if there is integrity of purpose and an intelligent search for forms which will work and which will meet the needs of our society".]

(c) "just and fair" within our present context of "political, social and cultural values"? [Context: This law impinges on strata-title private property rights in a land where (i) Singapore is the world's most densely populated city at 6,814 persons per sq km (Singapore surpassed Hongkong in 2009) and (ii) Singapore has the 3rd highest GDP at PPP per capita in the world at 49,288 international dollars (Singapore ranks after Luxembourg and Norway but ahead of the USA, Hongkong and even Switzerland according to World Bank 2008 data).] http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita#cite_note-1-1

On the one hand, the majoritianism powers invoked by this law are draconian. Yet on the other hand, the purported collectivism which birthed the majoritianism is thinly veiled and brazenly (purportedly legally) undermined from what I could piece together from the numerous en bloc battles fought in court (viz, some Majority Consenters and/or some Minority Dissenters could be paid more under separate private treaties with gag orders). Scant regard is paid to minority rights even where it affects something so basic as a ceiling over one's family that one has bought with 100% personal savings and provident funds!

As a classic Homer Simpson quote goes: "Never under-estimate the power of stupid people in large groups". Majoritianism is cleverly capitalized upon to unlock land value primarily for corporate developers because - in my opinion - the law is skewed and calibrated (not unwittingly, if you know our Gahmen) against extant individual homeowners. My opinion is buttressed by the stark and harsh reality invariably faced by nearly all homeowners of "twice the price, half the size, quarter the value" post-en bloc, as reflected in numerous press reports and even a mini-survey done by The Straits Times. That's why I reckoned the South Korean model of urban rejuvenation under their Hapdong Redevelopment laws mandating one-for-one (1-4-1) exchange is more just and equitable, being the lesser of two evils when majoritianism is allowed to prevail over private property rights (Gahmen has been made aware of South Korea's Hapdong Redevelopment laws since Aug 2007).

Other than occasionally fighting over Hello Kitty toys at McDonald's, petrol discounts and talking on handphones during cinematic screenings, Singaporeans generally are a law-abiding lot. However, to wit:

- The overwhelming caseload of the Strata Titles Boards resulted in a significant and hurried expansion of the tribunal in 2008 to cope with the backlog of en bloc battles, escalating into protracted en bloc legal battles at High and Appellate Court levels;

- The widely reported criminal acts committed by ordinary folks in various condo estates (so much for gracious living of the upper-middle and upper social class who could afford private property prices in Singapore);

- The neighbourhood and even matrimonial acrimony hearsay one encounters not infrequently over the past couple of years (and still persisting after the 2007 legislative amendments);

- The tribunal of their own accord even poked its fingers in an attempt to stop the collective sale of one controversial condo estate (viz, Regent Garden) for valuation reasons;

- The tax authorities (again, of their own accord) stepped in to claim their share of the spoils by way of overdue stamp duties that - according to en bloc market practice until the case of another condo estate (viz, Regent Court) - are paid only if the tribunal issues collective sale order; and

- The public disagreement (rare but distinct - thankfully healthy for being both rare but distinct) between the judicial courts and the tribunal over some landmark en bloc legal battles (viz, Horizon Towers, Regent Garden).

Perhaps (or surely?), the above symptons are a litmus indicator of the injustice and unjustness of this law. The aforementioned state of affairs already and unequivocably FAILS the Chief Justice's quote of the statement made by our founding father, Mr Lee Kuan Yew, in his 1962 address to the University of Singapore Law Society that "the acid test of any legal system is not the greatness nor the grandeur of its ideal concepts, but whether in fact it is able to produce order and justice in the relationships between man and man and between man and the State". And if I may add, "between one state organ and another state organ".

The Chief Justice's equanimity worries me when he said that "the very fact that we still debate this sort of question shows that the rule of law is very much alive and well in Singapore". Wah lau, surely the crux of the matter lies NOT in the "debate" but in the "execution"!

I am sufficiently perturbed as a Singaporean that Singapore seems to apply either the thick or the thin versions of the rule of law as it suits the powers-that-are according to each circumstance. Broadly, as the Chief Justice pointed out, "the thick describes the rule of law in liberal democracies". According to The Economist (15 Mar 2008), "the thick definitions treat the rule of law as the core of a just society" and "the 'declaration of Delhi' drawn up by the International Commission of Jurists in that city in 1959 followed this line in saying that the rule of law 'should be employed to safeguard and advance the civil and political rights of the individual' and create 'conditions under which his legitimate aspirations and dignity can be realised'."

As Singapore clearly does not fall into the above description and cannot be classified as a "liberal democracy" by any stretch of imagination, that must mean Singapore applies the thin version of the rule of law. However, Singapore traces her legal tradition back to common law (similar to the U.S. and the U.K. versus civil-law countries such as France and the Scandanavian bloc). Yet "common-law countries have more secure property rights, better protection of shareholders and creditors, more diversified share ownership, and tougher disclosure and liability laws" (The Economist, 15 Mar 2008). This en bloc law does anything but provides "secure property rights"!

Grrrr ... things just don't add up in this little red dot! So what else is new, eh? Such shilly-shally pattern in the legal arena is only consistent with Singapore's Prices and Earnings trends captured in UBS' 30 July 2009 report. Namely, on the one hand, Singapore rivals First World Countries in the areas of GDP, COL, Price Level but on the other hand, we rival Third World/Emerging Countries in terms of Wage Index, Domestic Purchasing Power, Purchasing Power of Wages (Big Mac/iPod), Working Hours - please double-click on the table in para 9 of my previous blog at: http://singaporeenbloc.blogspot.com/2009/10/horse-dumbstruck-by-mutant-three-hump.html

The Chief Justice with more hair than Yul Brynner but somewhat less dashing as Chow Yun Fatt drew a succinct analogy with the musical 'The King and I' where "the King is puzzled by the changes his kingdom has undergone. He sings a song which ends with these words:
When I was a boy
World was better spot
What was so, was so
What was not, was not
Now I am a man
World have changed a lot
Some things nearly so
Others nearly not.
Singapore has changed a lot in 50 years, some things nearly so, others nearly not".

Well, will the en bloc law change a lot next year, nearly so or nearly not?

They say: "Talk is cheap". In fast-paced Singapore in a fast-forward world, a decade from 1999 when the en bloc law first came into effect is nearly long. It's time to walk the talk! Otherwise, my movable refrigerator made-in-Malaysia will outlast my immovable real estate built-in-Singapore as I get "furiouser and furiouser" ...

07 October 2009

A horse dumbstruck by a mutant three-hump camel

For those of us who haven't seen a mutant three-hump camel, this is what it looks like:

1. Mutant three-hump camel. On 12 Sep 2009, the following Forum Letter was published in The Straits Times about a mutant three-hump camel: http://lushhomemedia.com/2009/09/12/property-index-and-saga-of-the-three-hump-camel/camel/
QUOTE: Singapore‘s Private Property Market Index looks like a mutant three-hump camel, registering a 45 per cent bust from the second quarter of 1996, a 40 per cent boom from the fourth quarter of 1998, a 20 per cent bust from the second quarter of 2000 and a 58 per cent rise from the first quarter of 2004, with the latest figures in the second quarter of this year dropping back to below the second hump.

Yet National Development Minister Mah Bow Tan said on Sept 2 that ‘as far as (private home) prices are concerned, we want to make sure… there is no excessive speculation’.

With a three-hump camel of boom-busts in 13 years, at what point is speculation deemed ‘excessive’? When a slew of sub-sale advertisements appear on soft launch and when kettles are owned for more than five years, yet property ownership of less than five years may not be ‘property trading’, it makes a mockery of tax laws.

Currently in land-scarce Singapore, we have 4.84 million residents (6,814 people per sq km), with a 6.5 million target population in 40 years. As Central Provident Fund savings are largely locked in home ownership, residential real estate goes beyond Mr Market’s wheeling and dealing. To draw a parallel, it is equivalent to rice harvests in Vietnam as an agro-economy – except we are in perpetual drought.

Mr Mah urges Three Thinks – ‘think carefully, think long term, think about the unexpected’ – before we buy property.

I did Three Thinks before buying a condominium unit. Now I cannot do even One Thing when my neighbours sell the roof over my head.

Property is all about location and timing. Retirement wealth is at stake. Can Mr Mah follow South Korean laws and do One Thing for Singaporeans: ‘Sell one, return one’ instead of ‘Double the price or half the size’ in collective property sales?

2. Horse kept mum. As pointed out in the Straits Times Forum Letter, most bona fide home owners and prudent investors (as opposed to speculative flippers) would have done the Three Thinks (viz, “Think carefully; Think long term; Think about the unexpected”) before committing to buy a private condo which is generally considered to be a significant purchase in expensive land-scarce Singapore.

To date, National Development Minister Mah seems to be dumbstruck as to what is the One Thing that private condo owners could do when the only roof over their heads is sold by courtesy of their neighbours. Is that why Mr Mah is keeping mum? Perhaps in a more sensitive and sensible frame of mind, Mr Mah is not parroting what he spouted and blurted out in Jun 2007 during an interview about en bloc sales (please scroll down to para 8 below). However, Mr Mah's silence probably means that what he spouted in Jun 2007 is the One Thing private condo owners could do -
3. Behind the curve (yet again). Almost two years ago, I posted a blog entry that drew an analogy between (a) the then withdrawn Deferred Payment Scheme and (b) the morphed Interest Absorption Scheme as being the equivalent of "half cati, eight taels” in para 4 of my 2007 Christmas Eve blog entry entitled "In the coming year of 2008": http://singaporeenbloc.blogspot.com/2007_12_01_archive.html

It took the Gahmen almost two years to ban Interest Absorption Scheme on 14 Sep 2009 after it withdrew the Deferred Payment Scheme on 26 Oct 2007! Tsk, tsk, a bit slow in trotting out the ban, eh?

4. One-for-one exchange in enforced en bloc sale. In Aug 2007, MinLaw was alerted about South Korea’s mandatory one-for-one exchange scheme under the Hapdong Redevelopment Scheme. How long will the Gahmen take to study the South Korean urban renewal model and re-calibrate a similar model to suit Singapore’s context? Isn't it high time that the amended en bloc legislation be substantively revamped (not just tinkered with peripherally)? All the more so in the light of the typical Gillman Heights en bloc experience set out below.

5. Face-off between Gillman Heights and The Interlace. There were media reports about shouting by Gillman Heights en bloc sellers who were invited to a preview of The Interlace condo that will be built on their land after Gillman Heights is demolished. Putting aside issues about limited choices or dumpy-looking building model, the dollar numbers were totally stark!

- Gillman Heights en bloc sellers were paid about $498 psf.
- The Interlace prices ranged from $850 - $1,150 psf during soft launch.

Another classic case of “twice the price, half the size, quarter the value” as land use efficiency would be fully maximized in the redevelopment of Gillman Heights into The Interlace. Yet once again, my last year’s National Day trilogy blog entry rang true on “Why en blocs are NOT right for Majority Consenters nor Minority Dissenters”: http://singaporeenbloc.blogspot.com/2008/08/en-bloc-why-it-is-not-right-for.html

This typical post-en bloc experience of Gillman Heights owners makes for a highly cogent argument and justifies a mandated and managed one-for-one exchange in an enforced en bloc sale, as discussed in my previous National Day trilogy blog entry entitled "So what's the alternative in the end": http://singaporeenbloc.blogspot.com/2008/08/so-whats-alternative-in-end.html

6. Multi-generational “sacrifice”. Putting the typical Gillman Heights en bloc experience into context, it was exceedingly perturbing to read MinLaw’s account of the history and impact of land acquisition in Singapore (Straits Times, 4 Sep 2009): The Government's land acquisition schemes have mostly affected land owners. The general public, on the other hand, have been the primary beneficiaries of such acquisitions, through public housing, building of infrastructure for public benefit and various other developments, including the building of condominiums - the latter allowed condominium owners to enjoy the land which was originally enjoyed by land owners.”How many generations of Singaporeans must sacrifice in the Making (and Re-Making) of Singapore?
(a) My grandparents’ residence was acquired by Gahmen for historic conservation.
(b) My parents’ residence was acquired by Gahmen for infrastructural development.

(c) My residence could be force-sold by my neighbours due to a law passed by Gahmen and we would end up as Squatters, Refugees, Downgraders or Downsizers post-en bloc.

And the next generation too? Is Singapore a circus of clowns or what??? Not funny, eh?
Whilst I won’t and can’t quarrel with MinLaw’s assertion in the same article that “we also need to take into account the need for modernisation, rejuvenation of estates and optimisation of land use”, it makes me wonder wherein does the Gahmen find “the appropriate balance” in the uniformly stark post-en bloc spectre of “twice the price, half the price, quarter the value” (ie, the typical Gillman Heights en bloc experience) in possibly ALL en bloc estates to date??? As a citizen, I just pray that the oft-touted "appropriate balance" is not just hot air and we do NOT wait for yet another decade before the en bloc law is next meaningfully re-calibrated and re-balanced to finally "do right" by the people!

7. Democracy vs Collectivism. Even after the Horizon Towers en bloc saga and especially after the Regent Garden fiasco, slimy things are probably slithering stealthily around in Golden Mile Complex as smart alecks try to do an en bloc via the back-door (The Straits Times, 19 Sep 2009).

Over time, I have blogged intermittently about how the "collectivism" element in en bloc sales has been effectively and legally undermined (eg, para 5 of my 2008 National Day trilogy blog entitled “Greek mythology: The Source and Themis”): http://singaporeenbloc.blogspot.com/2008/08/greek-mythology-themis-and-source.html

The slimy slitherings in Golden Mile Complex are yet another manifestation of this shenanigan. It makes a mockery out of the collectivism element of “collective” sales! If the authorities continue to sit on their hands, the market will render en bloc sales to be "fait accompli" exercises because the law can (and will) be legitimately twisted by the market to allow the consortium of Developer-buyers to force the hand of the Minority by (i) timing the market and (ii) buying low for the last 20% to average-down the consortium's lock-in of upfront purchases.

It goes back to the fundamental question as to whether in land-scarce Singapore with a high target population for the coming decades and home ownership as one of our core socio-political factors, property speculation is to be facilitated as opposed to genuine home ownership. As a general rule of thumb, will a bona fide homeowner or real estate investor expect to sell a property within five years of purchase?
Hence, it was facetious to read a Business Times article (24 Sep 2009) by a specialist en bloc marketing agent positing that: “There is no way that any rule can please everyone. Democracy goes by majority rule.” That is equivalent to saying if majority of the whites think lynching of the blacks is acceptable, then we should pass a law to that effect and all the whites can merrily (and legally) lynch the blacks! That’s “democracy”, eh?

8. The Cockerel and the Horse. It amazes me to no end as to how politicians either shoot off their mouth or shoot themselves in the foot!

More than two years ago, when en bloc fever was at its height, Sunday Times (17 June 2007) reported that when interviewed about en bloc sales, National Development Minister Mah advocated that Singaporeans should downgrade and said: "If you can't buy an executive flat, buy a 5-room. If you can't afford central area, go to the suburbs. If you can't afford Tampines, go to Woodlands or Yishun.”
Fast-forward two years later, with growing public criticism over HDB (public housing) price affordability, the Straits Times (2 Oct 2009) reported that Minister Mah asserted that comparing the prices of public flats today with those of 20 years ago is “not meaningful”. Mr Mah went on: “If we did that, we’d be comparing many things that we did 20 years ago, do we want to go back 20 years?”
So it begs the question: Say, 20 years ago, you bought a condo at $1mn. Now you sell it on en bloc basis at $2mn (the so-called "en bloc windfall" hype). Yet the $2mn en bloc pay-out would only buy you half the size of your en bloc condo in the same neighbourhood. Or you would have to move way out into the suburbs since you would not be able to “afford central area” (as Minister Mah squarely puts it). So is it “meaningful”??? Do we have a cockerel talking out there somewhere? Do we have many chickens running around sans their bird-brained heads as they die-die-must-sell-en-bloc?

To add salt to wound, Minister Mah goes on to talk about monetizing the real estate asset for income later in life which – in the case of HDB flats – involves selling the flat or participating in HDB Lease Buyback Scheme. Likewise for private condo owners who may similarly need to sell the condo in their twilight years as part of asset monetization, these condo owners will end up with a half-size condo or an outlying condo or a HDB flat to monetize eventually.

9. Singapore out-of-whack. With 44 years of nationhood under our belt, our people have toiled and competed and today Singapore has achieved a high GDP per capita, much to the envy and marvel of many other countries, I dare say.

Hence, it made me wonder why there seems to be a certain pervasive quiet desperation for (a) private condo owners to die-die-must-sell-en bloc and (b) HDB (public housing) owners to participate in Lease Buyback Scheme. It was interesting to read that there were 409 Lease Buyback applications to HDB but only 80 qualified and HDB may expand the target group for this scheme.

Then it all made sense when I read a UBS report (30 Jul 2009) covering 73 international cities entitled “Prices and Earnings (a comparison of purchasing power around the globe”.
Just for the heck of it all, I did the above table (please double-click on the table for legible viewing) to compare Singapore with:

(i) Zurich (since the 1980s, Singapore aspired to be “Switzerland of the East”),

(ii) Tokyo, Hongkong, Taipei and Seoul (the other Asian dragons),

(iii) Next rival city (for statistical proximity), and

(iv) Kuala Lumpur (for geographical proximity).

Compared against the above cities, Singapore’s pattern was interestingly parodoxical.

(A) In the areas of:
- GDP at PPP per capita (nearest rival: USA)
- Cost of Living (nearest rival: France)
- Price level incl rent/energy (nearest rival: Germany)
Singapore scored well and our nearest rivals are from First World countries! Ahhhh ...

(B) In the areas of:
- Wage Index (nearest rival: Russia)
- Domestic Purchasing Power (nearest rival: Malaysia)
- Purchasing Power of Wages for a Big Mac (nearest rival: Czech Republic)
- Purchasing Power of Wages for an iPod nano 8 GB (nearest rival: Slovenia)
- Average working hours/year (nearest rival: Turkey)
Singapore scored poorly and our nearest rivals are from Third World countries! Sheesh!!!

The picture is pretty telling, eh? But it is NOT a pretty picture at all for Singapore! In contrast, the scores are tightly correlated for all of the other abovementioned cities. In other words, where Zurich, Tokyo, Hongkong scored high in GDP/COL, they similarly scored high in Wage Index/Purchasing Power. Likewise, as Kuala Lumpur scored low in GDP/COL, they also scored low in Wage Index/Purchasing Power.

So the pattern matches for all of the abovementioned cities EXCEPT Singapore! In all the other cities, Life makes Sense (you are rich and so you live well; OR you are poor and so you live not so well) ... but here in this little red dot called Singapore, we are ensnared both at the wrong ends of the spectrum where we are so-called rich but we live poor!
Something is so out-of-sync in Singapore!!!

No wonder after working our whole life to buy a roof over our heads and despite home ownership being a cornerstone of the Gahmen’s political and social platform, most of us are now caught in a quiet desperation to monetize our family home (ie, HDB owners via Lease Buyback Scheme and private condo owners via die-die-must-go-en bloc even when faced with the guaranteed prospect of “twice-the-price, half-the-size, quarter-the-value” post-en bloc)! Are we a pathetic lot or what???
Have we failed in a way, dare I ask rhetorically?

12 August 2009

Who else is coming to the en bloc block party?

Update following PM Lee Hsien Loong's National Day Rally Speech on 16 Aug 2009: PM Lee said: "... it’s not just the hardware, but also the heartware, the memories which we are creating, which is what makes Singapore tick”. With such en bloc laws in place - what "heartware" is PM yabbing about when the "memories" are of neighbours forcing you to sell the roof over your head without your consent, throwing acid over your family car, super-glueing your main door to the door-frame, giving you a dirty look within the confines of the lift or taking you to court many times over??? Fostered by the type of laws, policies and practices in our country, "what makes Singapore tick" at the bottomline is the base value of "what's in it for me"! Is that what you, you and you want for our young nation? Sigh ... tragic ...

Hmmm ... now that IRAS is NOT dancing until the music stops, I wonder who else is coming to the en bloc block party this National Day?

Will the Ministry of Law (MinLaw) step up to the plate soon? Or is MinLaw still jiggling on the dance floor, eyes glazed-over ... in a daze after the 2006/07 kinetic en bloc frenzy and now bobbing mindlessly in a stupor, waiting for the en bloc tempo to pick up?

We waited for nearly a decade before the Land Titles (Strata) Act was amended in Oct 2007 - mostly in form but not much in substance. The Horizon Towers' en bloc saga exposed and settled so many fundamental issues and is a landmark court case for en bloc sales. The Appellate Court judges too did NOT dance until the music stopped. So how long do we have to wait with bated breath for MinLaw to stop pussying around?

It is noteworthy that the en bloc law was promulgated because of urban renewal and higher land-use intensity considerations. These considerations are manifestly under the purview of the Ministry of National Development (MND). Yet MND is NOT the primary driver for this en bloc law! Instead, it is MinLaw who in turn take on various passengers on this merry en bloc joy ride ... from MND, Urban Redevelopment Authority (URA), Building & Construction Authority (BCA), Singapore Land Authority (SLA), the Attorney General's Chambers (AGC), etc.

I probed and prodded about this curious state of affairs as to why MinLaw is the key "driver" (as opposed to being the dutiful "scribe" in crafting the legislation). Not surprisingly, I never got the answer. Hence, I mulled and mused as to whether it arose from a governance perspective (bearing in mind the overwhelming 80:2 composition of our Parliament and the application of party whip in parliamentary vote) - perhaps a need to instill institutional check-and-balance in the en bloc equation ... discreetly distancing MND from the key beneficiaries of this piece of legislation (viz, the Developer-buyers) because of the way Singapore's en bloc laws are skewed under Progressive Corporatism?

Personally, I do not doubt the wisdom of urban rejuvenation and I (grudgingly) accept the necessary evil of higher land-use intensity in teeny Singapore. Hence, these national needs are - to me - valid and, as a citizen, I support the "What" portions (viz, urban renewal and higher land-use intensity) but NOT the "How" bits (viz, the laws/policies as they presently stand). There are times when I ask what can I do for my country, just as there are times when I ask what is my country doing for me!!! Give-and-take, lol!

To achieve a national agenda item, there are many roads to go up this mountain, one of which is to use the engine of PPP (Public-Private Partnership). As PPP is used in many of Singapore's endeavours (locally, regionally or globally as we spread our wings to Suzhou and other parts of China, Indonesia's Batam, Malaysia's Johore Iskandar, etc), working relationships are naturally forged through the years under such PPPs. Whilst there is probably mutual appreciation of each other's desires and limits, I have no doubt that there is at ALL times a clear line dividing the PPP conjugal bed that is NEVER crossed. But that dividing line may well shift more to the left at certain times of the night or on certain days of the month or for certain seasons of the year, eh? After all, there are times to give and there are times to take - part of Life, eh? Whilst PPP is clearly NOT applicable to en bloc initiatives, can we deny that en bloc legislation promulgated by the PUBLIC sector is the very engine oil that directly lubricates PRIVATE sector Developer-buyers' smooth entry into existing sweet spots of prime/popular residential land? Whaddayou think???

In last year's 2008 National Day trilogy, I posited that - at a minimum - en bloc purchases meant "Buy one; Get one free" for Developer-buyers (if both could be sold at double price, then it would be 1-4-4 effectively). In case you are exclaiming "Oh" on a high note as you read this, here are 4 Os for you - Obviously Obscene Orgiastic Orifice for successful en bloc purchases! http://singaporeenbloc.blogspot.com/2008/08/en-bloc-why-it-is-not-right-for.html

If you are not breathless by now, you will appreciate why I concluded that en bloc sales are neither "right" for Majority Consenters (except en bloc flippers and serial condo raiders) nor Minority Dissenters!!! Rightfully, en blocs should PULL UP everybody (NOT just selected parties of Gahmen, Developer-buyers and en bloc flippers)! Instead, en blocs now PUSH DOWN existing owners who find themselves in a "Lose-Lose" situation (especially Owner-occupiers who heeded Gahmen exhortations to be prudent in using Central Provident Fund (CPF) savings to buy only one residential property as the roof over their heads)! The spiel of legal wrangles in Strata Titles Board, High Court and Appeal Court buttress my conclusion as we witness Minority sue Majority and vice versa, Majority sue Developer, and Developer threatens to sue Minority ... even the Strata Titles Boards joined the brawl but they lost!
For 2009, my National Day mullings and musings are provoked by the Straits Times article (10 Aug 2009) entitled "En bloc debate, HK style - Territory's debate holds up a useful mirror to practices in Singapore".

First off, Hongkong's existing en bloc legislation is much tighter and finely calibrated to:

(A) be more respectful of private property rights (90% collective consent),

(B) ensure sustainable redevelopment (property must be at least 40 years' old, taking into account the state of repair), and

(C) empower the tribunal to apply their mind and a more even hand - not just from a silo financial perspective but also from the multi-faceted social, historical, community and environmental perspectives.

Even then, Hongkong's proposed relaxation to 80% collective consent comes loaded with additional conditions where all but one unit has been acquired and the property is at least 50 years' old. The Straits Times reported: "And yet. the opposition to the proposed change in some quarters in Hongkong has been fierce. The change, they say, is tantamount to a subsidy for developers as it would mean that they would not need to entice as many homeowners with a good sale price".

Hongkong already has inherently tighter en bloc legislation even IF the proposed relaxation is passed, bearing in mind that (i) Hongkong severed her colonial ties only in 1997 (merely 12 years ago) compared to Singapore's 44 years of nationhood and (ii) Hongkong is reputedly sharper and nimbler when it comes to wheeling-and-dealing.

South Korea mandates "one-for-one" exchange in en bloc redevelopment to unlock the land value for existing owners even as their country achieves urban renewal and higher land-use intensity.

Singapore has an en bloc framework where there are only two certainties:

(1) Developer-buyer "buys one, gets one free" at a minimum because land value is primarily unlocked for the developer in an en bloc (NOT the existing owners) and the Gahmen takes a cut through development charges, differential premiums and stamp duties; and

(2) Owner-occupiers are guaranteed NOT being able to replace their homes sold by courtesy of their neighbours unless they are prepared to be a Squatter, Refugee, Downgrader or Downsizer - instead of the Utopia promised during the en bloc process, owners (especially owner-occupiers) find themselves in Ethiopia in the en bloc aftermath as they face-up to the harsh reality of "double the price, half the size, quarter the value"!

It almost borders on being a "legalized scam" (a classic oxymoron) conveniently brought to glorious fruition by Homer Simpson's home-truth of "never under-estimate the power of stupid people in large groups"! In "Hotel Singapore Inc" (sigh ... we have since graduated from "Singapore Inc"), I don't know about Majullah Singapura anymore! It is more a case of Merdeka Singapura, eh?

Incidentally, more than two years ago, I posted a blog entry suggesting a minimum 30-year timeframe before an estate could be considered for en bloc sale:
On the one hand, Gahmen has over the years raised the minimum standard of concrete quality in response to changes in design trends and building technologies. Thus, compared to buildings built in the 1960s-70s, the newer buildings are built with concrete with a higher deterioration tolerance. But on the other hand, Gahmen passed laws that have apparently resulted in the ignominious "youngest en bloc" record of a 4-year old building (Portofino at Sarkies Road) being demolished pursuant to an en bloc sale!

Interestingly, The Straits Times (28 Feb 2009) carried an article by the National University of Singapore (NUS) Civil Engineering Deputy Head who wrote about Design for Disassembly (DfD) process. This involves "the management of resources throughout the life cycle of a building - from extraction of raw materials, through manufacturing, design, construction and operation, to the eventual demolition ... the next generation of buildings constructed in Singapore can be viewed as store houses of future building materials". Whilst DfD is made out to be an environment preservation effort, I have niggling suspicions that it will likely fuel the current "throw-away" consumerism in much the same way that it is now cheaper to discard refrigerators, cookers and air-conditioners than to repair them.

Even more interestingly, there is now a trend toward Biomimicry where future buildings will hopefully be designed and built to mimic Mother Nature's symbiotic "waste-not-want-not" value system. Hopefully, biomimicry technology will be priced at a high enough level to deter "throw-away" consumer behaviour and force our urban planners to be more visionary and proact ahead of the curve (instead of react behind the curve).

Under our present en bloc legislation, we have this 10-year estate age distinction. But, technically, we could go en bloc one day after the Temporary Occupation Permit (TOP) is issued if 90% (by share value and strata title area) agree within this 10-year period (majority consent level drops down to 80% once estate hits 10 years in age). Tracing back to the old parliamentary and Select Committee records, this bizarre "10-year estate age" legislative provision came about because the Gahmen was ostensibly concerned about the possibility of say, a small but new development sandwiched between two small/mid-size but very old estates, thus hampering optimal redevelopment of the two adjoining estates.

However, instead of taking the lead from Hongkong where the tribunal would be given the responsibility and discretion of evaluating the circumstances on a case-to-case basis (perhaps in consultation with urban planning authorities) for such OCCASIONAL EXCEPTIONS, Singapore took what I consider to be the easy and lazy way-out, viz, by applying the law carte blanche but with a higher consent level set at 90% (instead of the usual 80%). Hence, whenever I read press reports of Singapore's Sustainable Development initiatives, I'd take it with a huge dollop of salt and let out a snorting laugh from one end (adoi ... no need to ask what emanates from the other end lol!).

In Life, one can't get too serious, eh? And they say that "Laughter is the best medicine" too!