Casino Singapore 2: Who's the idiot?? No to gang robbery-and-rape

In "Casino Singapore 1: Who's the idiot? Citizens/Gahmen lost Big Time", I set out how developers chalked up jaw-dropping increases in net profit of 666%, 417.9%, 262%, 188%, etc, for FY 2009/10, viz, two-three years after 2006-2007 en bloc frenzy (i) in the aftermath of 2008-09 Great Recession whilst (ii) in the midst of pay-outs under 2009-10 Resilience Package of S$20.5bn, causing us to plunder S$4.9bn from our past reserves for the first time in history:
http://singaporeenbloc.blogspot.com/2010/11/casino-singapore-part-1-whos-idiot.html

1. How and why the en bloc gang robbery-cum-rape was allowed to happen?
As to the first part of the question on HOW the gang robbery-cum-rape was allowed to happen - Answer: By MinLaw getting the RIGHT ANSWER TO THE WRONG QUESTION. Errrrr ... Correction: It's not even the "right" answer, but a "more or less right answer".

MinLaw invoked draconian Majoritianism over private property rights ostensibly to meet the very valid national objectives of (i) urban renewal and (ii) higher land-use intensity. I say "ostensibly" because when 82% of us live in Housing and Development Board (HDB) public housing flats, the proportion of land used for HDB estates is many times that used for non-landed private properties. In addition, as HDB housing programme started in 1960 with most HDB estates being built in the 1980s, there are already issues of estate ageing, functional obsolescence of building materials, low land-use intensity, etc.

So WHY pass such a draconian law to invoke Majoritianism over PRIVATE PROPERTY RIGHTS when the proportion of land used for such non-landed private developments is small, relatively speaking?

Just like any crime story, it gets titillating when you trace back to "motive", eh?

We need to digress a little so as to put things into proper perspective. Now ask yourself this whilst bearing in mind the above context:

Q1: Do we have a massive HDB programme under SERS (Selective Enbloc Redevelopment Scheme)? [Under SERS, Gahmen even go so far as to assure displaced owners of a ready-to-move-in replacement unit around the same neighbourhood vicinity with continuing subsidies but subject to various conditions and relatively modest top-up payment.]

A1: No! SERS is truly selective and is a "privilege" for the select few. Why? Wouldn't it make more sense to embark on a massive SERS because it would IMMEDIATELY and SIGNIFICANTLY improve land-use intensity, bearing in mind that (i) most of our old HDB blocks range from 10-15 storeys with some walk-ups of 4 storeys and some at the then-skyscraper height of 25 storeys and (ii) most of the deluge of PRs and newly minted Singaporeans are NOT of Jim Rogers and Zhong Sheng Jian genre? Why not replicate Tanjong Pagar's 50-storey Pinnacle-at-Duxton all over Singapore, eh?

But instead of massively increasing land-use intensity under SERS, HDB persist in tinkering with urban rejuvenation even as first-time-buyers and no-choice-but-downgraders raise hue and cry as they compete with the deluge of foreign immigrants (including PRs and newly minted citizens) with each exploiting and re-inventing all possible loopholes within HDB's policy framework! Surely, it could NOT be due to HDB's oblivion about what Ministry of Home Affairs (MHA) and Ministry of Manpower (MOM) were each doing in approving all kinds of applications with such zeal and zest when HDB is under the purview of Ministry of National Development (MND)! HDB eventually woke up by asking the RIGHT QUESTION as to "why there were so many HDB flats available for rental" (instead of the previous WRONG QUESTION of "how to control and regulate the rental of HDB flats") ... and a whole host of HDB rule changes were announced on 30 Aug 2010!

Hence, there must be serious advantages for Gahmen to consciously choose the alternative of applying the following slew of HDB upgrading programmes, instead of SERS demolition-cum-replacement (DESPITE the fact that the building materials used in old HDB flats are likely hitting functional obsolescence because of inherently lower quality compared with that used in private apartments/condos that the Gahmen die-die want to facilitate en bloc demolition):

(a) MUP (Main Upgrading Programme),

(b) HIP (Home Improvement Programme) where they upgrade the interior of your HDB flat - this is being piloted in - guess where - Tampines (part of Minister Mah Bow Tan's Tampines GRC) and Yishun (probably part of Prime Minister Lee Hsien Loong's Ang Mo Kio GRC) ... I wonder if in the next General Election the PAP will offer to upgrade your frumpy old mattress to a bouncy new water-bed mattress to induce couples into making more babies,

(c) LUP (Lift Upgrading Programme) - on top of the brazen impropriety of allocating priority for lift upgrading based on the level of votes for a specific political party during a General Election when such upgrading work is funded by national reserves, nobody is querying if it is cost-justifiable to provide lifts in, say, four-storey HDB walk-up flats that serve only 6 more families ... yeh, I'm NOT kidding (now why won't Minister Mah Bow Tan be returned to electoral victory in his constituency when the owner of an old 4-storey HDB flat in Mr Mah's electoral ward gets a near-private lift shared with only one other neighbour on his floor?),

(d) NRP (Neighbourhood Renewal Programme) which will replace the IUP (Interim Upgrading Programme) component of IUP Plus.

www.clipproject.info
To return to the main point about en bloc gang robbery-cum-rape - For the prime/ popular locations where Singaporeans bought private condos - drawing down on their CPF retirement nest-egg saving and hocking themselves to the eyeballs with both husband-and-wife working their 4-globule posteriors off to repay bank loans for the next 20-30 years - the Gahmen passed an en bloc law calibrated to unlock land value - but NOT for extant owners who are the citizens/voters!!!

As to the second part of the question on WHY the gang robbery-cum-rape was allowed to happen -

Q2: What's the "motive" for this en bloc law under the UNHOLY POLITY involving market forces, developers as Big Biz, and almost the entire Gahmen machinery when it impacts only a relatively small proportion of land used for non-landed private property???

A2: This is a two-part answer.

First, because the needs of rich and/or smart Foreign Talent for swanky condos in prime/popular residential districts PREVAIL over the sense of home, of rootedness and of community of Singaporeans. 

Second, because of developers' Big Biz interests, where demolition and redevelopment of prime/popular residential districts are more likely to be astronomically profitable with limited downside risks due to enhanced marketability of such choice locations - as borne out by:

... FY2009-10 OBSCENE INCREASE IN DEVELOPERS' NET PROFIT in triple-digit percentage range for the FIRST TIME in their CORPORATE HISTORY,

... just two-three years AFTER 2006-07 EN BLOC FRENZY,

... with the typical two-three year lag time for demolition/construction culminating in 2009-10 COMPLETION OF REDEVELOPMENT and THE INDUSTRY'S ACCOUNTING CONVENTION OF PROGRESSIVE INCOME/PROFIT RECOGNITION,

... despite 2008-09 GREAT RECESSION,

... which triggered 2009-10 RESILIENCE PACKAGE HAND-OUT.

Is the above argument well-reasoned and reasonably substantiated? It is NOT for me to say. It is for you to evaluate and decide.

By invoking majoritianism under the guise of collectivism, MinLaw hypes upon the "will of a super-majority" of 80% (90% if the estate age is less than 10 years from the date of issuance of the Temporary Occupation Permit). Hence, MinLaw tries to valiantly balance the en bloc law between Majority Consenters (pro-sale) and Minority Dissenters (anti-sale) which is merely a Side Show and NOT the Real Battle.

MinLaw's orchestration of this Side Show has inevitably resulted in the Land Titles (Strata) Act ("LTSA") being SKEWED towards pro-sale.

Pro-sale, by extension, is therefore pro-developers. [Yawn ... what else is new? Progressive Corporatism as a form of expedient governance - as we all know the unspoken open secret.]

As en bloc transaction is a sale, the two contracting parties are sellers (Owners) and buyer (Developer).

Pro-developer naturally translates to Anti-owners. [Way to go, eh? A law that works against the interests of condo owners who are largely individuals, mostly Singaporeans. It is pathetic to read the 6 Nov 2010 Straits Times report that quoted our earnest Deputy Prime Minister Teo Chee Hean: "Sincerity, honesty, what you can actually do for people" as the hallmark traits of the ruling government. It breaks my little heart to realise that the good minister doesn't even realise what the PAP did TO the people whilst working FOR the people.

The following two blog entries explained how the law is calibrated to be Pro-sale (and therefore Anti-owners - regardless of whether you are a Majority Consenter or a Minority Dissenter - the only difference is that the Majority Consenter dug his/her own hole whereas the Minority Dissenter would be buried alive in the hole dug by others):

(a) http://singaporeenbloc.blogspot.com/2010/06/fifa-world-cup-2010-when-people-with-no.html

(b) http://singaporeenbloc.blogspot.com/2008/08/greek-mythology-themis-and-source.html

2. How to counter the gang robber-cum-rapist.
Again, my suggestions are two-fold:

FIRST: Mandate an additional settlement option of one-for-one (1-4-1) exchange

- PREFERABLY, BY LAW with well thought-out legislative safeguards for Owners to counter-balance the skills/knowledge of Developer-buyers and other en bloc industry experts WITHOUT killing commercial viability for the Developer-buyers

- ALTERNATIVELY, BY CONTRACT with the assistance of SPECIALIST en bloc lawyer cognizant with all the potential legal, financial, CPF, land conveyancing, construction and business risks - which is a tall order even for most non-specialist lawyers (what more for volunteer Sale Committee members who do not have industry skills and are likely clueless)

SECOND: Adopt 3 Action Points at 3 Critical Milestones in any en bloc attempt

FIRST:
If the Gahmen is sincere about working FOR the people, then they should learn from South Korea and Taiwan and mandate one more settlement option for en bloc sale, viz, a one-for-one (1-4-1) exchange based on SAME size, SAME floor level and SAME geographic orientation of main living room window for qualifying owners with contractual commitments of design layout, furnishings and fittings and finishing materials (in much the same way that the Paterson Lodge (now since redeveloped into Paterson Linc) en bloc sale was structured EXCEPT the Paterson Lodge risks were capped because they had 100% consent for exchange which is well nigh impossible to obtain in most estates).

- South Korea's Hapdong Redevelopment Scheme mandates such 1-4-1 exchange:
http://singaporeenbloc.blogspot.com/2008/08/so-whats-alternative-in-end.html

- Taiwan also is going the same route of 1-4-1 exchange, as per the Straits Times article of 2 Aug 2010:

- Hongkong has more sensibly calibrated en bloc laws that bar any en bloc attempts unless each of the buildings on the lot in a non-industrial zone is at least 50 years old. Also, the Hongkong Lands Tribunal is empowered to take into consideration the age and state of repair of the estate in any en bloc attempt. In comparison, the role of Singapore's counterpart Strata Titles Boards (STB) is much more severely limited.
http://www.scribd.com/doc/42320125/Hongkong-Enbloc-Land-Compulsory-Sale-for-Redevelopment-Notice

In sharp contrast, Singapore's en bloc law sanctions demolition as soon as the spanking new condo is issued with the Temporary Occupation Permit (ie, when Developers are authorized to hand over the condo keys to Owners) IF 90% of the Owners so agree to such sale/demolition.

Not only that, AFTER exacting such a HIGH SOCIAL AND ENVIRONMENTAL COST (NOT to mention likely POLITICAL COST too) from such en bloc demolition of swathes of prime/popular residential estates in the 2006-07 frenzy, what UPSIDE came out of it?

Swanky (or "wannabe swanky") apartments where you walk right into the kitchen and/or dining room upon entry (why not into your shoe closet as it would no doubt increase space efficiency, eh?). Residential blocks that have a bigger footprint and less natural lighting in kitchens backed by private lift shafts, and less natural ventilation as gardens on the street level are replaced by gardens on mid/top levels in a singular drive to maximize the permissible Gross Floor Area and squish out every sq cm imaginable as Net Saleable Area.

What else came out of it? Ahhhh ... wholesale cladding of entire blocks to hide all-round bay windows with consequent increase in heat transmission values, and lost opportunities to create wide expanse of horizontal space in readiness for renewable energy possibilities as they become increasingly commercially viable in the near future, etc.

Ohhh ... how could we miss those sleek glass curtain wall facades in our equatorial climate where double-glazing would earn the Developer brownie points under BCA Greenmark Scheme (in case you miss the irony of "brown" and "green" shades). And chalk-up even more obscene profits for Developers because saleable area is computed from the glass edge of curtain wall as opposed to mid-point of the thickness of concrete wall on which a window frame sits. Not to mention the faster pace of buildability afforded by glass panels which hasten project completion to Developers' sheer delight. Who cares if you have to blast on the air-con upon returning home to dispel trapped heat, keep all curtains drawn tight to keep a modicum of bedroom modesty as your prying neighbours watch TV (and your XXX-rated performance) from their living rooms two Honda car-lengths away, wash curtains much more frequently (and spin them dry in dryers whilst the blazing sun is shining outside in blistering tropical heat) than repainting the building facade every 10 years and worry about continuing availability of cheap foreign labour who would risk an arm and a leg to clean your windows whilst swaying in the wind from a suspended gondola/body harness?

Blimey, such urban planning mis-steps will take another generation to unravel and perpetuate in the vicious cycle of UNsustainable Redevelopment! All these were achieved with the blessings of Urban Redevelopment Authority (URA) and Building and Construction Authority (BCA) as they craft development guidelines, approve building plans and audaciously delay impact of policy changes in operational execution!

SECOND:

Besides 1-4-1 exchange, there are Three Actionable Suggestions at Three Critical Junctures of the en bloc process made by PAP MP Ellen Lee during the parliamentary debate on the LTSA amendments on 18 May 2010:
http://singaporeenbloc.blogspot.com/2010/07/part-2-lady-gaga-is-too-stumped-to-go.html

(a) At the beginning of en bloc process:
Mandate professional establishment by a qualified property appraiser of Apportionment Method with basis of recommendation documented in writing and tabled at an EOGM PRIOR to drafting of Collective Sale Agreement. Such professional recommendation/ justification should be attached to the Collective Sale Agreement and highlighted in the skeletal summary.

(b) In the middle of en bloc process:
Mandate disclosure of sensitised Residual Land Value methodology applied in the investment business proposals used by the marketing agent in attempts to sell the estate to potential Developer-buyers. Such business proposals (and each round of updates) should also be tabled at an EOGM and distributed to each owner with signed acknowledgements of receipt attached as Appendices to the Collective Sale Agreement.

(c) Towards the end of en bloc process:
Mandate a simple Re-Affirmation by Majority Consenters prior to execution of Sale and Purchase Agreement by the Sale Committee representatives. The Re-affirmation Level must hit the same tipping point of 80% (or 90%) but need NOT be identical to the level of Collective Sale Agreement signatories. Re-affirmation is returned to the en bloc lawyer via registered post (or fax followed by registered post). Non-return of Re-affirmation is a DEEMDED affirmation. Such process could be operationalized within 14 business days and would NOT jeopardize the rights of the Developer-buyer nor compromise the legal sanctity of contract enshrined in the Collective Sale Agreement, bearing in mind the inordinately long gestation and lock-in period inherent in LTSA.

In his ministerial reply during the abovementioned 18 May 2010 parliamentary sitting, the Law Minister, Mr K Shanmugam, commented that some of the MPs' suggestions are "not without merit" and that they "may well be very useful for specific developments, and owners may wish to adopt them". Whilst no one can lay claim that everything provided in the law applies 100% to all cases, surely that is NOT a sound basis for MinLaw to do nothing and continue to perpetuate the legislative artfulness, eh? Hmmmm ... with such artful legislation in place, do we have an arty-farty MinLaw on our hands?

In fact, with the 2010 LTSA amendments, STB and the judicial courts will likely be reduced to the status of Rocket Dockets insofar as it concerns future en bloc disputes. Under Rocket Dockets, "justice hurried is justice buried". It is the flip-side of "justice delayed is justice denied".

Alleging future Rocket Dockets is NOT a figment of my Doom-Boom-and-Gloom imagination as we are sitting ducks in perpetual threat of en bloc doom, watching the crane boom swinging and smashing the wrecker's ball into what was once our homes and scurrying around in gloom to find replacement units at 2xPrice or ½Size.

In fact, my "Rocket Dockets" hypothecation is even SUBSTANTIATED by none other than the Law Minister, Mr K Shanmugam, when he asserted in his speech at the forum “A Free Press for a Global Society” held on 4 Nov 2010 at the Columbia University: "There are thus LESS INSTITUTIONAL CHECKS AND BALANCES ON EXECUTIVE ACTION IN SINGAPORE compared with the US – AND THAT IS DELIBERATELY SO." [Capitalization emphasis is by The Pariah.] Please refer to the green highlighted text in page 3, paragraph III(23)(2) in the following link:
http://www.scribd.com/doc/42902994/Columbia-University-A-Free-Press-for-a-Global-Society-Speech-by-Singapore-s-Minister-for-Law-Mr-K-Shanmugam#logout

Is this what we want for our "country" ... errrr "land"?

Sigh ... as a citizen, I find it very disconcerting to observe how public institutional checks-and-balances have been increasingly eroded, undermined, compromised - all in the name of expediency, trust, faith. And I am NOT even using USA as a benchmark!

I am just assessing it within the Singapore context as I reflect, eg, .... on how many times has the judicial right of review been invoked in our 45 years of our nationhood, ... on the level of respect ministers show even to their own party cadre members in the quality and relevance of their ministerial replies, ... on how often do MPs seek clarification or rebut/challenge ministerial replies, ... on the degree of transparency where the Civil Service, the Intelligentsia, the Mass Media and the Government Parliamentary Committees are able to put out the facts to educate (and assure) the public on the due process of checks-and-balances in the quest to "serve the people", ... on how accountability is called for when the S$20.5bn Resilience Package continued to be handed-out even as scintillating quarterly financial results were being released half-way into the Resilience Package, ... on how transparency is manifested in disclosing the effective cost of such Resilience Package to public coffers after imputing and adjusting for 1% cut in corporate tax rate, various extensions, waivers, deferrals, etc.

As a people, I reckon Singaporeans need to decide in the next General Election whether:

(i) We want the INSURANCE of having public institutional checks-and-balances; OR

(ii) We are willing to bear the systemic risk of giving a BLANK CHEQUE to the ruling party (whoever that may be, now or in the future) POST-DATED FOR UP TO 5 YEARS as an EXPEDIENT TRADE-OFF?

In "Casino Singapore 3: Who's the idiot??? Smoking gun with spent bullets", I will present the incriminating evidence of such en bloc gang robbery-cum-rape. The story continues to unfold ... invoking the by-now-forgotten parliamentary promise made at the inception of en bloc law that the primary objective of this law was to create "many more housing units in PRIME 999-year leasehold or freehold AREAS FOR SINGAPOREANS", ... the ministerial allegations and fear-mongering attempts in 1999 and repeated in 2007 in the face of facts that repeatedly affirmed how en bloc law effectively unlocked land value for Developer-buyers who get 2x Price AND 2x Size whilst extant Owners face the Hobson's Choice of 2X Price OR ½ Size:

http://singaporeenbloc.blogspot.com/2010/11/casino-singapore-part-3-whos-idiot.html