Purpose of "purposive" - Gillman Heights verdict

On this Yuan Xiao Jie (first full moon of the first lunar month) of this Chinese New Year of the Ox, the Appellate Court ruled against the Minority Dissenters of Gillman Heights with Appellate Court costs borne by the respective litigants and 50% of the High Court costs borne by the Minority Dissenters.

This group of Minority Dissenters stood united in their valiant bid to save their homes as they dug into their pockets which are not deep by general standards to challenge the very law itself, pitting themselves against the big-boy developer-buyers and the all-mighty lawmaking food chain in this David versus Goliath clash. In the end, the Minority Dissenters lost. Another estate bites the dust.

1. Background. Gillman Heights was completed in 1984 - that was when the first occupants moved in. It was a HUDC estate at that time and was governed by rules and regulations akin to that of public housing administered by the Housing & Development Board (HDB). Gillman Heights - together with another HUDC estate known as Pine Grove - were the pioneers in privatizing their estate in 1995/96. In the process of privatization, Gillman Heights owners carried out some essential works to fall within the qualifying criteria and also some upgrading works a few years later. The CSC for Gillman Heights was issued only in 2002. In the en bloc process, Gillman Heights achieved about 87% majority consent, contracted to sell to a developer-buyer at $548mn and applied to the Strata Titles Boards (STB) for a collective sale order in 2007.

2. Points of contention and ruling at Appellate Court level. The Gillman Heights Minority Dissenters challenged:

(a) Whether the 1999 Land Titles (Strata) Act (LTSA) (ie, prior to the specific amendments in 2007 relating to privatised ex-HUDC estates) applied to Gillman Heights which was a HUDC estate before it was privatised; and

(b) If the 1999 LTSA applied, then whether the date of issuance of Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC) would apply to Gillman Heights who obtained their CSC only in 2002 (although physical completion of this estate was in 1984) and therefore would require 90% consent level for an estate of less than the 10-year-old cut-off point (instead of 80% consent level for an estate that is 10 years or more in age).

Three years (!!!) after the Collective Sale Agreement was signed by the first of the Majority Consenters on 18 Feb 2006, the Appellate Court ruled on 9 Feb 2009 that the "purposive" element of LTSA prevailed in terms of the estate's physical age and the availability-for-en-bloc clock started ticking from the date of completion of Gillman Heights in 1984. In fairness, the Appellate Court acknowledged that Minority Dissenters' points about the 1999 LTSA and the 2007 amendments with specific provisions for ex-HUDC developments but the Appellate Court attributed these to "faulty or inappropriate drafting" in the 1999 LTSA. Hence, the parliamentary intention underpinning this piece of legislation could not be frustrated by a literal interpretation of the law.

3. "Purposive" purpose. Laws are in black-and-white. Every word, every comma counts. Or does it?

In this connection, let me share a little New Zealand joke. New Zealand's national symbol is the Kiwi bird. Hence, New Zealanders are also called Kiwis. Through the ages, the Kiwi bird has evolved to its present-day flightless state. This bird eats ground vegetation (eg, underground roots, little plant shoots, fallen leaves) and it also predates on worms, eels, amphibians, crayfishes, etc.

In New Zealand, they say the following:

(a) About the bird -
A Kiwi eats shoots and leaves.

(b) About some New Zealander men -
A Kiwi eats, shoots and leaves.

Add a comma between "eats" and "shoots" and the sentence transforms into a manifestation of the Darwinian Theory of Evolution:

- of self-preservation (eg, by eating),

- of procreation (ie, by seminal shooting), and

- of survival of the fittest (viz, by beating a quick exit and leaving to find another lady bird for more seminal shots to increase their gene pool)!

What is the purpose of eating shoots and leaves? We need not fly to New Zealand to ask this flightless bird as it could be found on the tin cover of a popular shoe polish brand.

What is the purpose of putting a comma between "eats" and "shoots"? We could ask a teacher of English language. Or we could ask Singapore legal practitioners who usually have a mastery over the English language on how they would interpret this comma - whether as a lawyer in explaining these words, or as a draftsman in drafting the sentence or as a judicial member in reading the final sentence. But, of course, there is this thing about being "purposive", eh?

4. Purpose of "purposive". I am probably getting my left foot entangled with my right hand by flipping "purpose" and "purposive" from the previous paragraph sub-heading. But I would like to put into context the purpose of being "purposive".

From parliamentary debates and public comments by ministers and civil servants in enacting LTSA, the purpose of en blocs is for urban renewal and higher land-use intensity in respect of private strata-title developments. Singapore is so teeny. We have stacked upwards, tunnelled downwards, filled-up and topped-up to the north, south, east and west. With the latest population target of 6.5mn people on 700-odd sq km, what more could we do to create space for all of us to work, play, live and shit in inverse order of priority?

In the process of achieving our national agenda of urban renewal and increasing land-use intensity, the land value of these strata-title developments would be unlocked as a natural consequence. Here's a thorny question - UNLOCKED FOR WHOM???

4.1 Unlocking land value for corporate developer-buyers. Was it our Gahmen's intention to unlock land value for the corporate developer-buyers?

So that corporate developers could demolish a 15-storey block to build 36-storeys in prime and/or popular residential districts which would NOT otherwise be so easily available for redevelopment??? So that corporate developers could replace 200,000 sq ft of aggregate "strata-title area" with 600,000 sq ft of "net saleable area" - out of which 100,000 sq ft is for the air-space in your double-storey living/dining room, balconies in every bedroom, bay windows on three sides of your bathroom, and planter boxes in every conceivable nook which spun-off an entire sub-industry of planter-box converter specialists??? [Home-buyers - beware of this thingee called "net saleable area" as this definition morphs over time in true Darwinian spirit by courtesy of our statutory boards/government agencies!] Isn't a doubling of storey height or a tripling of net saleable area more than enough to ensure commercial viability of en bloc redevelopment for corporate developers? Bear in mind that the prime/popular locations of en bloc sites already significantly increase the marketability of the redevelopment - try peddling an en bloc redevelopment in the Katong area versus a new project in Sengkang district built on land bought under the Government Land Sale!

If the answer to Q4.1 (unlocking land value for corporate developer-buyers) is "yes", I'd say that it is a naughty (if not nutty) answer to this knotty question. Why? Because it is the citizens with Identity Cards (not the corporations with Business Registration Certificates) who voted in these Members of Parliament to form a Government - dare I even breathe - "of the people, by the people and for the people". Ooops, sorry, we are Singapore, on the other side of Planet Earth - what am I thinking about?

4.2 Unlocking land value for existing owners (predominantly Singaporeans). Or should there be a purpose of "purposiveness" in devising this en bloc legislation such that our Gahmen should re-calibrate this law to unlock land value for existing subsidiary proprietors? Let's not forget that these were the owners who (i) had the acumen to buy into such prime/popular locations years ago, (ii) used their hard-earned private savings and Central Provident Fund balances for the purchase and paid a huge premium over public housing rates in the process and (iii) prudently applied inflation-hedging as part of their retirement financial planning in the hope of indexing their likely capital gains to inflation over a reasonable time horizon at the point of actualization (ie, upon their retirement or when they really need to monetize their property asset in future to send their children for overseas education, to pay for a major surgery, to embark on a new enterpreneurial venture, etc).

This is just talking the language of our hard-nosed and hard-headed Gahmen about urban renewal and higher land-use intensity which naturally unlocks land value! This does NOT address the realm of community ties, or our sense of time and place, or our nascent rootedness, or our basic right to reside where we choose, or the sanctity of private property rights - and NOT be forced by our neighbours to sell our homes and NOT giving our neighbours to sell what doesn't belong to them in the first place ... even within the context of communal sharing of air-space and common facilities in strata-title developments! Not that any of the aforementioned are any less important to us as human beings!

Has our model of Progressive Corporatism gone too far for far too long? Is it time to go back to the basics of Neo-Communitarianism - of Doing Right, in Serving the People (not just the Corporates), and to Seek Balance and Curb Excesses. Is the answer to Q4.2 (unlocking land value for existing owners) a "yes" possibly? Or have we missed the forest for the trees?
How to unlock land value for existing owners? By following South Korea's urban renewal model with some modifications (viz, by mandating an ADDITIONAL OPTION for 1-4-1 EN BLOC EXCHANGE based on factual SAME size, SAME floor level and SAME orientation considerations within a narrow band of pre-defined alternatives and variances in order to give some wriggle room to developer-buyer and existing owners in the redevelopment). For more elaboration, please refer to my 5 blog entries dated:

- 26 Mar 2007 (One-for-one "exchange"),

- 2 Apr 2007 (Ministry of Law Public Consultation),

- 19 Nov 2007 (After the 2007 law, what's next),

- 24 Dec 2007 (In the coming year of 2008), and

- 7 Aug 2008 (So what's the alternative in the END).

5. Market's ups and downs; Life's twists and turns. Let's bear in mind that the Gillman Heights en bloc sale was crystallized PRIOR to the property prices softening in 3Q 2007 and the market's initial meltdown in 2008.

After the Appellate Court delivered this verdict against the Minority Dissenters, one of them very astutely put her finger on a very pertinent point - She said that she will be getting $498 psf from this en bloc sale. In the mid-2007 frenzy, she recounted that a 5-room HDB flat in Mei Ling Street was going for $746 psf in the resale market. Even in today's market nose-dive, a 5-room HDB flat in Bukit Merah is selling at $600 psf as per her most recent check of the HDB web-site for resale flats.

The conventional wisdom is that there is a so-called "en bloc windfall", thus enabling home owners to monetize their property asset at a premium! Well, it all depends on how one defines "premium", eh? It looks like a rose, it pricks like a stalk of rose but does it smell like a rose? Amazing that even ministers sing this monetization tune! These ministers are so out-of-touch with ground realities that they even sing off-key with such gusto - it's really mind-blowing!

"What en bloc windfall?" she hooted. "I still lose money even after I downgrade from a privatized condo to public housing!" she lamented.

Effectively, this Minority Dissenter will be paid $498 psf from the en bloc sale that was ostensibly transacted at a market peak by the Sale Committee who sold the family home for her. In view of the Appellate Court verdict and assuming that legal completion of the en bloc sale goes through eventually, she would need a replacement roof for her family.

Scenario 1: If this Minority Dissenter had bought a replacement unit when the en bloc sale was crystallized for fear of the market ramping even higher (because en bloc activity usually takes place only when the property market is hot), she'd have paid $746 psf (ie, $248 extra for each sq ft) even AFTER downgrading from a privatized estate at Gillman Heights to public housing in Mei Ling Street.

Scenario 2: But this Minority Dissenter decided to take a market risk and NOT buy a replacement unit in the mid-2007 frenzy for fear that the en bloc sale may get scuttled/aborted (eg, if STB or the Courts ruled in favour of the Minority Dissenters or if the developer-buyer backs out of the transaction in the end by paying a forfeiture penalty). If the en bloc sale was scuttled/aborted, she could potentially end up with the unintended financial burden of owning two properties. But as events transpired for Gillman Heights en bloc, she got "lucky" in a way in taking this risk because the property market had crashed since then. Who would have known during the mid-2007 frenzy whether the property market was going up or down??? But even in today's downward market spiral, she'd still have to fork-out $600 psf (ie, $102 extra for each sq ft) for downgrading to public housing in Bukit Merah.

She continued to rant: "Like this, how to do retirement financial planning? You tell me lah?"

Who can give her an answer? Even with her "good luck" of selling high and buying low, she is still losing money in the immediate term! She will also be downgrading her property asset from a privatised condo in a choice location to a public housing flat in a less prime vicinity. Real estate is the most valuable and most substantive asset in her family's entire portfolio. Hence, over the long term, she and her husband will lose the multiplier benefit of a better-classed real estate asset for actualization in the future when her husband eventually retires!

What can I say? I can only agree with the assessment of this Gillman Heights Minority Dissenter that she is essentially "cooked" by this court verdict. Her sentiments were echoed by her co-litigants. Indeed, they have lost more than the court battle. My heart goes out to the Minority Dissenters ... some put up a brave front and psyched themselves to make the best out of the worst, some felt a sense of vindication that the highest court on our land acknowledged that there was "faulty or inappropriate drafting" of the law even as it ruled against them, some walked away with a dull ache of loss with tears welling up, some struggled to come to terms with the harsh reality - there was a mix of varying degrees of resentment, anxiety, resignation to fate, fear, sadness, disgust, anger. For many of us, en blocs affect our family homes and - by extension - our memories, our hopes, our dreams and our aspirations. So, you bet, it is EMOTIVE. As it should! For we are human beings after all. But, hey, one never knows, eh? Life's twists and turns are such that maybe, maybe, maybe ... "Man Proposes, God Disposes", as they say ... God may not necessarily heed what the three good Judges Proposed!

So what's the alternative in the END?

This 7 Aug 2008 blog entry is the third part, continuing from the earlier two parts, both dated 6 Aug 2008, viz:

- The SOURCE and Themis

- IN-BETWEEN: Why en blocs are not right for Majority Consenters nor Minority Dissenters?

- So what's the alternative in the END?
ANSWER to Q: So what’s the alternative in the END?
[Hint ... look to South Korea! The South Korean model even offers relief to Developer-buyers if problems (eg, liquidity crunch, weakened demand) should surface.]

How we answer the above question will be very telling on us as a society. Do we "care about the beans or the beings"? This was the poser in The Economist (2-8 Aug 2008) regarding the breakdown in the latest round of Doha talks on world trade.
From the Gahmen's perspective: There is a spectrum of possibilities. The pendulum could swing all the way back by repealing the en bloc law and we go back to 100% consent. OR it could swing all the way to the other side by reducing the requisite majority from the present 80% (90%) level to more than 50%. OR it could tinker and tweak ... make a hole here by relaxing the substance of this provision ... and patch there by tightening the form of that clause. You fix one crack and another leak springs elsewhere.
OR those who govern could do a paradigm shift of the mindset to ensure at least equivalent REPLACEMENT for existing qualifying Owners and revamp the en bloc business model. This would arise only IF those in the relevant ministries, government agencies and statutory boards step up to it and make an essential difference in the spirit described in Dr Cherian George's Straits Times commentary (10 Aug 2008): "No other organization has the resources and powers of the state, and individuals who step forward to help the state use that power for SOCIETY'S BENEFIT deserve our support, not our contempt". [Capitalization emphasis is by The Pariah.] Any takers?
As a pithy saying goes: "If you don't stand for anything, you'll fall for anything".
From the Owners' perspective: ONE size cannot fit ALL.
Sub-group 1 of owners: They want cash. Within this sub-group, some just want a quick flip, others demand a huge premium, yet others just want more than everybody else, some face the frightful prospect of just covering their original purchase price and outstandings under bank mortgages and/or Central Provident Fund charges, some are holding multiple investment properties, a fair number merely want to ride on the collective sale premium and are prepared to downgrade/downsize because of their changed accommodation needs/financial circumstances (some are truly desperate for immediate cashflow due to inadequate retirement planning, speculative investments gone awry or failed business ventures - whilst I empathise with their desperation, does it justify their attempts to drag others down with them as they sink in their abject failures???).

Sub-group 2 of owners: They want replacement units. Within this sub-group, some need a roof over their heads, some need a replacement asset either for short-term resale or long-term retention as part of their portfolio. The existing location matters either because of (i) the asset premium attached to such prime/popular location or (ii) the familial and social ties (short travelling distance to school/work or childcare/daycare centres, childhood fondness for the area as part of their families' inter-generational link, parents or siblings living nearby, long-time neighbours who provide a support network to each other in their twilight years and who therefore intend to re-congregate, etc).

Sub-group 3 of owners: They want to keep their present apartments for a variety of reasons and personal preferences. For this sub-group, their salvation is repeal of the en bloc law OR steadfast Minority Dissent at the legislated cut-off point. The former (ie, law repeal) is highly unlikely in my opinion but others may hold different views. The latter (ie, steadfast core dissent) is too fraught with unknowns and uncertainties. The stakes are high, with no room for compromise and the determinant factor of "core dissent" is totally beyond one's control. At an emotive (heart) level, I do identify with this sub-group (Home Sweet Home, as we fully understand). But at a cognitive (head) level, I reckon a middle path needs to be trodden. Whilst nobody can make everybody happy all of the time, we can try to make MORE people happy for MOST of the time!

And try we must. So how do we achieve (1) urban renewal/higher land use efficiency as envisaged by Gahmen and (2) yet ensure commercial viability for developers and (3) still preserve sense of time/place and community for en bloc owners? A Win-Win-Win!

As mentioned in para C-4.3 of my mega 4-part Nov 2007 blog entry ("After the 2007 law, what's next???") -
Proposed Solution: Two options –
(a) Cash or
(b) 1-4-1 Exchange (sell one; get one back)
= Doing right (owner’s choice: cash-out now/in future OR keep rebuilt home)
South Korea’s en bloc laws
mandate 1-4-1 exchange

and it works!
MinLaw knows about the South Korean model. Can our Singapore Government follow South Korea’s lead? South Korea's model is different due to their legacy and scale issues. Singapore is much more compact, with little legacy issues. We could piggy-back on the best elements in the South Korean model and customize them for Singapore's context, eh?

Horror stories of exchange seemingly haunt MinLaw. Have they been misled into believing that exchange is fraught with difficul­ties, delays, added costs and lower sales pro­ceeds? As explained in my 6 Aug 2008 blog entry ("IN-BETWEEN: Why en blocs are not right for Majority Consenters nor Minority Dissenters") - With the evidential trend of “Developers getting 1-4-2 or 1-4-4” versus “Owners getting 1-4-½ divided by 2”, can exchange negotiations be left to the market? Is the playing field level when Disparity (disparate Owners with 101 reasons for/against en bloc sale) faces Singularity (Developer-buyer’s single-minded profit focus)? Isn't the stage set for exchange to be exploited by Developer-buyers on discounted basis (instead of 1-4-1)?

In the current legislative VACUUM, corporate greed breeds INERTIA towards exchange based on SAME size (eg, 1350 sq ft in Strata Title Area, NOT Net Saleable Area), SAME level (eg, 12th floor) and SAME orientation (eg, living room main window facing North-North East). Paterson Lodge overcame practicalities in 1-4-1 exchange. Getting a dark and dank basement unit in some nook or cranny in en bloc exchange is SCARE-MONGERING of the highest order!

In a casual conversation a few months ago, I asked the CEO of one of the Big-Boy Developers if he thought 1-4-1 exchange in en blocs would be commercially viable. His answer: Yes. This guy was unequivocal - no if's, no but's! And he belongs to the genre of CEOs who are "on the ball"! When I probed further as to whether his public-listed company would take the lead in setting an exemplary standard of corporate social responsibility in offering 1-4-1 exchange in en blocs, he was very clear that such leadership initiatives must come "from the top" as he pointed towards Heaven with a suitably beatific smile. "From the top" doesn't mean God, I reckon. He means the Gahmen! Quite naturally ... in the commercial world where profit accountability to shareholders is primary, the 100% differential between "1-4-2" versus "1-4-4" is too high a price for corporate conscience (1-4-2 and 1-4-4 are not Toto combination numbers - please read my 6 Aug 2008 blog entry "IN-BETWEEN: Why en blocs are not right for Majority Consenters nor Minority Dissenters"). Now who can blame a guy with a pleasant and beaming moon face?
Why is MinLaw so fearful about 1-4-1 exchange? Let's examine why MinLaw fervently believes 1-4-1 exchange will present a host of "practical difficulties" and "delay the process ... which could, ultimately, translate into lower sales proceeds".

When buying an apartment at a soft launch (just as in deciding whether or not to opt for 1-4-1 exchange in an en bloc sale) - other than price and location, what are the other main decision factors?
(A) unit size
(B) unit level
(C) unit orientation
(D) design lay-out
(E) quality of finishes.Of course, there are other risks in 1-4-1 exchange and these will be addressed below.

Let's dissect it
line-by-line.
IF, IF, IF 1-4-1 exchange is mandated by law as ONE of the TWO options for en bloc settlement for qualifying Owners (barring en bloc flippers) buttressed by calibrated guidelines for Factors (A)-(E) and regulations for the other known risks ...

At the outset, Factors (A)-(C) (ie, unit size, level, orientation) are ascertainable factually from the title document and surveyor's report. Flexibility options to upsize/downsize or upgrade/downgrade within limited range could even be offered based on formulaic specifications and verifiable construction costs. Examples: (i) The owners of an existing 3000 sq ft apartment may prefer two units of 1500 sq ft in the redevelopment now that their children have grown-up and flown the coop. (ii) Another owner of 2000 sq ft unit may want to buy an extra 250 sq ft based on construction cost plus xx% premium. (iii) Yet another owner may not have enough savings to bridge the technical "sale and re-purchase" involving CPF paybacks or outstanding bank loans, in which case, the owner could trade-in 180 sq ft from the existing unit. (iv) An owner presently on the lowest floor may wish to upgrade to mid-level in the new condo by paying the floor differential premium at soft launch.

Unless the Developer-buyer is a newbie in the construction industry, these developer companies are very conversant with the latest urban planning guidelines and building requirements. Therefore, Factors (D)-(E) (ie, layout and quality of finishes) could be drawn up and warranties are committed by the Developer-buyer in a legal document. Owners could evaluate all these PRIOR to signing the Collective Sale Agreement (CSA). No doubt, urban planning guidelines and building requirements may change prior to submission of the plans for Grant of Written Permission. But if there is political sincerity in tri-partite contributions towards urban renewal, the authorities could grant exemptions based on evidence of achievement of requisite en bloc consent prior to public announcement of such planning or building changes. If there should be deviations in quality of finishes (eg, due to change of supplier source, or discontinuation of product line, etc), these are certifiable by quantity surveyors and compensations are similarly warranted in a legal document.
Depending on the deal structure (and this is where natural market forces will throw up various hybrids of risk and ownership options), title risks are capped via legal transfers/caveats. There are financial and completion risks as the Developer-buyer may go belly-up or incur delays in getting the Temporary Occupation Permit (TOP). But a bank guarantee/performance bond would mitigate delay/non-completion risks with a sufficiently high penalty built-in to deter such delay/non-completion.
Finally, 1-4-1 exchange entails temporary displacement for Owner-Occupiers or Investor-Owners who opt for a replacement unit. Relative to the scale of things, it is financially feasible for the Developer-buyer to compensate for such displacement from vacant possession to TOP issuance as reimbursement of (i) Owner-Occupiers' rental expense or (ii) Investor-Owners' rental income. In comparison, the Developer-buyer would incur substantive interest cost to pay-off the Owners who opt for upfront cash which in turn would earn interest or offer other investment opportunities for such Owners.

So nobody is gaining at the expense of anybody - the risks and opportunities are DIFFERENT for those who opt for Cash versus those who opt for 1-4-1 Exchange! Each bear their own risks and avail of their own opportunities!
Different sizes for different people, eh? 1-4-1 exchange may not be ideal ... but it is the lesser of two evils to be assured of equivalent REPLACEMENT at a minimum, instead of utter DISPLACEMENT!

Depending on risk appetite and investment horizon, Owners who opted for replacement unit could still liquidate and sell their unit in the open market (subject to minimum time constraints imposed by Developer-buyer) during/after redevelopment. Otherwise, Owner-Occupiers who chose this option could move back into the redevelopment upon completion and preserve the sense of community with some of the previous owners amidst the new owners and keep a sense of time and place in the SAME neighbourhood.
Under this proposal, Owners are well-placed to make an informed choice PRIOR to signing the CSA – Cash or Exchange. By adding just one more settlement option, the displacement impact from an en bloc would be significantly tempered for Owners. It may lessen the acrimony amongst neighbours! Even if the en bloc were to fail, it leaves a sour after-taste and an uneasy truce hangs over the entire estate for years to come, and estate fires are lit whenever maintenance/upgrading issues surface (metaphorically speaking, although it may become literal one fine day if die-die-must-sell owners decide to take matters into their own hands and scorch dissenters' front doors to coerce en bloc consent under duress)! 1-4-1 exchange may preempt hooliganism and criminal acts during the Battle of Wits and War of Wills.

It is noteworthy that MinLaw uttered NOT a squeak in the face of increased hooliganism at EOGMs and vandalism of private property AFTER the amended laws came into effect! MinLaw's legislative tweaks were intended to make the en bloc process more transparent. Did they? Or did they unwittingly make the Yes/No divide more apparent, thus facilitating easy target ID for strongarm tactics? Merely reinforcing "Tyranny by the Majority", eh? By no means am I advocating veils, curtains or transparent walls that fog-up at the flip of a switch (which is what you get in the fancy condos these days)! Increased transparency within a FLAWED LEGISLATIVE STRUCTURE coupled with an INCONGRUENT BUSINESS MODEL ain't gonna cut it! Offering exchange may reduce the incidence of expensive and time-consuming legal suits and appeals to government agencies for assistance. With everything flying helter-skelter all over town and tearing the very fabric of our society. it has become socially unacceptable and economically unproductive!!! Sure, 1-4-1 exchange may spawn unforeseen evils - but the chances are probably lower, especially if the Gahmen adopts other counter-balancing measures.

In fact, offering 1-4-1 exchange as an ADDITIONAL OPTION may shorten the en bloc process because it would be palatable to more owners. The en bloc Start Point (ie, setting Reserve Price which - by my reckoning - sparks the preliminary decision trigger, NOT the first CSA signature) to the End Point (ie, application to Strata Titles Boards for collective sale order) should be achievable within 12 months. The present legislation created an en bloc business model that is too out-of-whack as Owners may have to wait for 30 months or more to lay hands on the collective sale proceeds to buy a replacement unit (as explained in my 6 Aug 2008 blog entry "IN-BETWEEN: Why en blocs are not right for Majority Consenters nor Minority Dissenters").

Also, it would significantly reduce the market/financing risks for the Developer-buyer because (i) the 1-4-1 exchanges would constitute committed pre-sales of their new inventory and (ii) the interest cost would be significantly reduced. Both of these are very helpful in this age of shortened business cycles with increased volatility which beset not just property assets but most other asset classes too.

Volatility could be somewhat tempered if the Gahmen also imposes en bloc quotas by (a) geographic region and (b) quality type. Since our road use traffic is managed via car quota of COEs (Certificates of Entitlement) by quantity and engine capacity, surely management of en bloc pace in land-scarce Singapore is not that wacky an idea!!! To preempt urban planning mistakes of other countries (eg, Hongkong's over-congestion), plot amalgamations could be incentivised.
As the 1-4-1 exchange option may well hasten the rate of en bloc redevelopment in the current Re-making of Singapore (by MM Lee Kuan Yew's reckoning, it would "take us another one or two decades as we move into a new era" - Straits Times, 31 Oct 2007), it is only prudent to (i) introduce en bloc quotas and (ii) incentivise plot amalgamations CONJUNCTIVELY with a mandated 1-4-1 exchange to ensure a well-rounded solution. This would preempt the torrid recurrence of the 2006-07 en bloc frenzy that eroded Singapore's national competitiveness (not to mention the sense of loss and possibly regret by those who were capitulated with fateful resignation/fatigue or were misled by half-truths in signing the CSA or were forced to sell under the collective sale order)!!! Construction costs, property prices and rentals went spiralling at rocket speed as the TRIPLE-WHAMMY EFFECTS kicked in: (1) immediate DEMAND for housing, (2) inevitable laggard SUPPLY during redevelopment period and (3) exacerbated COMPETITION for construction materials/labour. From the economic perspective, the pro-cyclical effects only increase the risks of asset bubbles, market volatility and bubble bursting - not very prudent economic planning, eh?Like a bagel with hole in the centre, Business Times (27 Mar 2008) confirmed that Singaporeans have been pushed out from the Core Central Region (CCR) as the local segmental share of private non-landed property market dropped from 54% to 47% from 2000 to 2007 whilst foreigners’ share doubled. Pan-island, our share dropped from 77% to 63% (lowest share since 1995). Certainly, it could not be due to (a) falling birth rate as demographics of private property ownership is likely above age 35 or (b) lack of upgrading aspirations from our dominant HDB heartlands. Was the Bagel Effect accentuated because Singaporeans were shortchanged from en bloc windfall? I lay no claims to prescience or clairvoyance! More than a year ago, in May 2007 blog entry ("In between ... evolving a Bagel Class of Singaporeans"), I blogged about this projected drop of Singaporean ownership of apartments in prime districts. Really, I derive no pleasure in saying "I told you so". To the contrary, I feel sad at such dire predicaments faced by fellow citizens who continue to call Singapore "home". En blocs must push everybody up,
NOT pull everybody down (or push up only selective parties, eg, flippers, marketing agents, lawyers, developers, government).

That is the surreal disjunction between en bloc sales and en bloc windfalls!
FY2007 budget planning was all happy nonsense – the projected $0.64bn deficit became an actual $6.4bn surplus (Straits Times, 16 Feb 2008). Stamp duties/property-related revenues were $3.4bn in excess – 53% of budget surplus came from realty! Realty reality, ugh???
Will Gahmen “do right” to ensure equivalent Replacement (not disconcerting Displacement) even as we sacrifice our homes for Singapore’s Re-making? ...... When? There are human lives behind every en bloc sale. Let's make en blocs humanistic! Since urban renewal and increasing land use efficiency are part of our NATIONAL AGENDA with ramifications on the economic competitiveness and attraction of Singapore, it is High Time that TRI-PARTITE CONTRIBUTIONS be made by Gahmen, Corporate Developers and Owners (instead of just Owners as is the present situation)!