Friday, 4 April 2008

1996AD (Not exactly 10,000BC) - Origins of Enbloc Nightmare?

I've just had an interesting discussion about the recent Channel 5 TV series called "En-bloc". Putting aside the sensationalism of what is really a traumatic experience for many people, and the rather stereotyped portrayals of 'anti-enbloccers' in negative ways, it made me wonder how did our existing enbloc laws (allowing for majority consent) really start.

I dug around the ST archive as far back as I could.. Pre 1997 Amendments that changed the enbloc law to allow for an 80%/90% majority consent. Back then, property consultants involved in enbloc sales pointed out that the larger the estate, the lower the chance of a successful enbloc simply because it's plain harder to get that unanimous 100% consent.

I found, in May 1996, several ST Forum letters including a 1000+ worded letter (1000 words!) that sounded about the right time to get the government to rethink enbloc policy (about a year to the 1997 Parliamentary debate). The 1995-1996 period was also the time when SERS or Selective En Bloc Redevelopment Scheme was implemented, which saw HDB flat prices escalate phenomenally. I'd argue that the SERS got the public consciousness to link enbloc = profits.

But why limit the windfall only to HDB SERS? Why not private condos? It's true that at that time, enblocs are possible, just incredibly difficult due to the 100% consent.

So back in May 1996, Mr John Christopher de Souza and Mr Ronny Sim suggested in their ST Forum letters a revision of the enbloc law of 100% consent. Mr Sim, for example, calls it an 'exit strategy' for condo owners - a revision of consent to 75%. These were followed by an ST commentary by Tan Sai Siong, putting into public discourse the term "the tyranny of the minority". Arguing that buildings that are over 30 years old will fall apart because it's the end of their life cycle, Ms Tan again brought up the profitability of SERS for HDB estates, and suggested 75% or 90% as suitable thresholds.

You can read the full texts (which I won't reproduce due to length) here on scribd.

These were followed by 2 letters by Martin Goh and Laena Tambyah, very prescient of all the troubles we face now regarding enbloc sales. I'll reproduce them since they're short :) (You can read them in the scribd link as well.) I wonder if we ever meet the writers of these letters now, almost 12 years later, what would they say?

(As a note - 1996 was about the time when the government imposed a major curb on property speculation, especially for enbloc sales - the taxes on capital gains. Reports suggested that the taxes did not deter people from investing in enbloc potential estates, with a record number of enbloc sales in 1996 - despite unanimous consent required.)


The Straits Times (Singapore)
May 13, 1996
Forum; Pg. 28
En-bloc sales: Owners should not be forced to sell property

I REFER to Mr Ronny Sim's letter "En-bloc sales: Exit strategy needed" (ST, May 7). While I agree with him that there is a need for old estates to be upgraded via redevelopment, I find the idea of a Bill to deny the minority their right to object to a redevelopment proposal absurd.

Most en-bloc sales promise incredible profits. Under normal circumstances, any person would be enticed to offer his property for a collective sale. But there are some who may have reasons to object to such a sale. One example could be that of a property inherited from a loved one. It may have great sentimental value for which no amount of money can compensate. Imposing a "majority wins" rule defies all fundamental rights in property ownership. It may also give rise to abuse by unscrupulous individuals or groups for selfish gains.

I sympathise with Mr Sim's frustrations, but I cannot agree with his suggestion for legislation. I find it fascinating that a Member of Parliament supported his suggestion to force an individual to sell his property against his will, just because the majority thinks it is a better option.

MARTIN GOH

The Straits Times (Singapore)
June 8, 1996
Forum; Pg. 36
Spare a thought for the elderly who may not need fancy condos
THE COST OF THE SINGAPORE DREAM

THE letter "Don't pursue dreams at the expense of others" (ST June 3) is timely.

One aspect of materialism at the expense of others that is not mentioned is the singlemindedness with which some Singaporeans are pursuing the possibility of making a killing through en bloc sales of condominiums.

I have heard, on more than one occasion, comments such as "There's one old woman holding out" and "If only that old couple would be more reasonable".

The elderly folk who are holding out and appear to be unreasonable have probably spent all their CPF and other savings on purchasing these particular apartments.

In all likelihood, valuing their independence, they bought their homes for proximity to family and accessibility to shopping and transport. In their twilight years, they are expected to uproot themselves and move to unfamiliar surroundings.

There are no retirement villages or similar facilities in Singapore where the independent elderly can retire in comfort and dignity.

Where are they going to move to? Will banks consider them credible clients for loans to purchase new property?

The elderly may not want or need the new fancy condos. If the younger folk yearn for luxury amenities, perhaps they should take a lesson in thrift and patience from their elders, and in due course they will be able to afford (with a clear conscience) those tempting dream condos instead of hoping to make a fast buck at the expense and inconvenience of our senior citizens.

LEAENA TAMBYAH



3 comments:

Anonymous said...

We are still suffering from the "tyranny of the minority". These minority take the form of flippers and raiders. They buy into a development and push through enbloc sales quickly to exit with their bundle with scant regard to the interests let alone sentiments of the majority living in there.

Anonymous said...

No wonder our children are not for staying in Singapore! We cannot even be sentimental about our homes as we are under threat of losing them with each en bloc; if are condos are older than 10 years old, some call them slums just to make a quick buck; ugly booing takes place at public meetings if you voice the intent to stay in your home. When Mummy and Daddy fight to keep their memories, Junior goes lol, what's Singapore to me? Better leave this nasty nation where there are no rights even to your home!

Onlooker said...

Math 101
Conservative Majority = Elite minority + opportunistic/parasitic minority + "Moral?" minority + c - Real Majority.
where c =
constant Dictatorship/ profit over responsibility / "higher {aka holier/richer} than thou delusion"

Summation = Epic Fail + Constant Wayang + possible (Sub Prime)like meltdown Epic(aka all that money have to come from somewhere).