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!