What Nga Should Do Before Urban Renewal

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Why is there a plethora of problems in the property industry, among them abandoned housing projects, unscrupulous developers, cheated buyers, poor construction, delays, excessive profits, and lack of accountability?
Given the width and depth of the intractable problem that property has become, is now the right time to focus on the Urban Renewal Act (URA), whose sole intent seems to be to make it easier for developers to grab property in prime areas which have become valuable and are ripe for redevelopment and substantial profits?
Why is Housing and Local Government Minister Nga Kor Ming pushing so hard for the URA when there are so many other things that are terribly serious and problematic and are not being addressed at all?
If developers had undertaken the developments under a proper master plan by the government and local councils, and if the government had held the developers to account, would there be a pressing need for urban renewal now?
ADSNo. It is necessary to do the other things first to pave the way for urban renewal, not to compound the problem by rushing into it before the developers, the government, and the buyers are ready for it.
Buyer protection?
Nga said the URA will provide homeowners the opportunity to obtain new, more comfortable, spacious, and liveable replacement units.
“For example, if the current unit is 450 square feet and worth RM200,000, the new unit offered may be larger or, for instance, valued at RM400,000. What’s the issue if our (Madani government’s) main objective is to help the people?” he said.
Nga should know better. How much are the developers making from this? Will they ensure the occupiers get fair deals? Isn’t the market price now depressed because conditions in the units are poor? Where is the protection for the buyer?
Housing and Local Government Minister Nga Kor MingWhy are the units in such a dilapidated condition now? Because developers built poor units, service facilities were poor, and maintenance was lacking. Lifts break down, infrastructure is lacking, surrounding areas are unkempt, and there is poor rubbish collection.
We know low-cost houses are mostly dilapidated, which means their value will be low. Is this the kind of value they will get because it is the market value? Shouldn’t the value be based on what the redevelopment will get?
Where are the displaced going to stay before the new houses are built? Who will pay for their rental? Who owns most of the low-cost houses now - the poor or the rich? What quality of replacement housing will they get?
Stop the rot
To go for urban renewal even before all these basics have been sorted out is to put the cart before the horse. Stop the rot first and then go for redevelopment, not the other way around, because even as you solve one problem, the other escalates.
All these can, as an immediate priority, be sorted out first without redevelopment, while the attendant problem of poor living spaces can be handled by ensuring that all future developments, especially low-cost ones, are properly vetted and standards set.
ADSSurely Nga, an intelligent person, knows this, but why is he not working in this direction first and ensuring that developers are properly regulated at all levels before he makes grandiose plans for the RM322 billion redevelopment of urban areas?
Nga must realise with the lack of information and multiple other problems unaddressed in the property area, his URA is rather hasty, ill-thought of, and worst of all, a plan to enrich property developers at the expense of the poor who will be pushed more and more out of town centres which will became the enclave of the rich and the elite.
Why didn’t Nga disclose a draft URA first publicly and invite comments and suggestions? Why rush it through Parliament without having proper feedback and taking account of them first?
Nga needs to get his priorities right and deal with the myriad problems faced by property buyers, especially house buyers. While he is drooling over the prospect of RM322 billion in value in redevelopment, he seems far less concerned about RM113 billion worth of abandoned projects.
If he is not aware of the problems, let’s enumerate four of them and suggest ways of overcoming them. Let’s see if he will address them as urgently as urban renewal, which will help property developers more than those who have units there.
1. Enact a new home-buyers protection act
Tighten up the law, enforce it and introduce new legislation in addition to the Housing Development Act to protect buyers, especially home buyers who are often simple, unsophisticated people and hence very liable to be cheated. Hundreds of thousands of them have already been diddled by unscrupulous developers who have abandoned projects after taking money from buyers.
2. Ensure buyers don’t lose money from abandoned projects
Of all the things facing buyers, this is the worst, but successive governments have done nothing about it for more than six decades. The solution is simple: ensure developers don’t touch the money paid until they complete the project. Use bridging financing instead.
Developed countries do that to protect their people, the risk is borne by the developer. Third World countries like ours push the risk to the buyer who makes progress payments, protecting the developer who passes most of the risk to the buyer but keeps all the profit. For more, read this article.
3. Ensure developers are accountable
The trend is gated and guarded communities, condominiums and strata titles, and even some freehold and leased-land communities, all of which require management of properties. And a period, which can be decades - yes decades - before management is handed over to residents.
I stay in a managed community developed by a subsidiary of SP Setia, numerous times voted the best developer in Malaysia, in which our Employees Provident Fund has a significant stake.
I have jointly owned the property for over 15 years and paid monthly maintenance charges to the subsidiary. I have never seen the audited accounts or even the unaudited ones. If this is the standard of a five-star developer, what hope do we have relying on others?
How is that possible? Shouldn’t the government ensure that such audited accounts are disclosed to all buyers? How is one to ensure that we buyers are not being diddled?
Even this, a major problem, is not settled, and Nga wants urban renewal, worth RM322 billion, to be undertaken by these same developers.

4. Set up a property commission
Given that the property market is large and becoming a complex one, why not set up a property commission which will oversee developers, ensure that dealings are fair, arbitrate disputes, ensure protection for buyers, etc, as I suggested here.
There are many other problems, and I am sure I don’t need to enumerate them all. Nga knows about it far more than I do. But he has chosen to go for urban renewal. It’s clear as day to all of us why he has chosen to handle that when there are so many more urgent matters.
I hope that Parliament throws the URA out and tells Nga to handle all the outstanding problems, which will result in better housing and buildings in the future. Then he will be better placed to handle urban redevelopment. - Mkini
P GUNASEGARAM says that just as there is no smoke without fire, there is no suspicion without substance.
The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.

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