Is it legal for HDB to charge land prices twice?

robertteh SG

A reply to forumer (posted at Feedback Unit on 24.7.2005)

The push of homeownership HDB flat prices can be seen in perspective as follows:-

1960 - Bukit Ho Swee fire : The then PM Lee Kuan Yew visted the Bukit Ho Swee fire victimes and proclaimed to start the homeownership scheme to house the people and rebuild BHS.

Under the Land Acquisition Act he began the Homeownership to build HDB flats and rent or sell them at affordable prices based on construction costs with land costs practically negligible to affect pricing. As long as the construction costs are recovered the HDB were able to sustain the homeownership scheme to keep up providing housing for the people - a primary objective of government.

1965 - 1970s - Toa Payoh HDB flats in 1969 were sold at construction costs at averagely S$6,200 per unit for 3-room standard unit to S$7,500 for 3-room improved units. 4-room and 5-room units were sold at costs averaging $20,000 and $35,000 respectively depending on location throughout 1970s.

1980s - property prices surged and some developers were making monies in the property market.

Government changed the basis of pricing HDG flats without debates or discussions in parliament. HDB overnight became a private developer althogh the original HDB Act stated very clearly its functions are to provide housing for the people to meet the objective or manifestos of governemnt in power.

There was no accountability and transparency in changing the housing functions or objectives of HDB to that of private developer in 1970s. HDG might have committed a breach or irregularity in such change of the HDB functions without amendments to HDB Act.

In order to give a semblance of legitimacy, ministers announced that the HDB flat owners should be allowed to have two bites of the cherries and make monies. It liberalized homeownership fnnction to allow PRs from Hongkong etc to purchase the HDB flats to make monies thereby pushing up prices.

It then goes into designer flats to upgrade the architectural appearance etc so as to charge more monies for flats in some HDB estates. It privatised HUDC to push up their prices.

It then performed some creative accounting to jack up the prices of lands by transferring lands acquired for housing functions to State Land office which then sells back to HDB at market values so that HDB can sell the flats like the private developer at market land costs instead of original construction costs as done in BHS or Toa Payoh. This is the story or how HDB succeeded in jacking up flat prices to that sold by the private developers forgetting its original funcations as stated in the HDC Act.

Over the space of a few years an average HDB 3-room flat was sold at S$170 K a 30-fold increases as compared to the 1969 construction-cost price.

In reply to queries, government ministers failed to disclose that the so-called subsidy of HDB flats the ministers were claiming were actually the result of land costs being jacked up due to creative acccounting with land acquisition profits already transferred to the consolidated account as surpluses of the government.

These profits amounted to billions which went to paying the billions of salaries to HDB officers very much in the same manner as donation to NKF were paid at 24% to CEO and staff to maintain their highest levels of rewards.

These facts were not diclosed unfortunately by the ministers in answering to public outcry or queries over profiteering by HDB. In addition the off-budget profits or surpluses made by HDB and statutory boards amounted to billions annually.

An average household were found to be paying S$500,000 - S$800,000 to the HDB/LTA and became the most heavily indebted people of the world.

1990s - despite the billions of profits made by HDB the government continues to up the HDB prices to equate to market developers' prices. 3-room HDB flats which cost S$70 - 90 K were sold at S$200 K making extraordinary profits which were not disclosed to the people even in answering questions about excessive HDB prices raised in parliament.

The questions people have been asking include:-

(1) Since government has acquired lands at cheap prices under the Land Acquisition Act, and such acquisition costs were paid out of public fund is HDB legally entitled to charge full land costs again in selling of HDB flats.

(2) What are the construction costs of HDB prices?

(3) Why change the function of HDB from that stated in the HDB Act without parliament amendment to the Act when HDB varied the pricing formula in 1970s.

(4) Should HDB be permitted to become private developers. If it is allowed to become one, should government monies be used for developing public housing etc? If there has been no prior approval to this change then how is HDB to provide people with housing by the most economical means at its command including exercise of government power of acquisition of lands under the Land Acquisition Act.

Government has not done what was right as in the NKF in changing the role of HDB and has failed to disclose the above-stated requested information.

In other words it became arrogant and refused to disclose factual information relating to repurchasing of lands at market prices from the state land office after profits were taken and transferred to the consolidated account with government making billions before HDB even build the flats.

When not tell the truths as they are. Why transfer the lands to state land when the are acquired to provide housing for the people as part of the functions of governemnt spelled out in the HDB Act or government manifestos.

Why not let developers and private businesses make as much monies as possible and try every means to compete with them thereby hurting their economic competitiveness to pay taxes and create jobs for the people.

By trying to compete with private sector and trying to undermine their making monies in the market place the people and government both will lose at the end.

Lowclassman SG

Freaking SG Government. Inhumane is the word. Mad

Atobe SG

The Ruling Party a.k.a. the Government is the LAW, and has the liberty and authority to change the Law as they see fit.

Is there no one else able to "police the Policeman" ?

In one of my postings, I had mentioned that Professor Tommy Koh had during his post graduate days, written a thesis concerning the legitimacy of the Laws that have been passed through the Singapore Parliament.

It seems that some of the Laws that have been passed did not go through the process required before being approved by Parliament, and the legitimacy of these Laws are open to question.

Another fact that is quite obvious by now, is that our Government is as bad as the Communist Government, in which they have little "tolerance" to the success of any Private Enterprise.

In property development, instead of assisting the Property Developer to build affordable housing to back up the Government Housing Program, this Government will find all ways and means to put its hands into the profits that is available to the Developers.

The Government will take the First and Biggest Cut of the Cake.

The Government could have lowered the Cost of Living to Singaporeans, by selling land at a moderately fair price, or control the sales price of the land so as to influence all other costs that are affected.

Unfortunately, NO.

This Government has to extract the highest price possible based on the Market Forces of Supply & Demand, which is entirely manipulated by the Government in its control over land that is put up for sale.

In addition to fixing the land price to the highest level that the market can bear, this Government will also impose a Development Fee that is a percentage of the value of the Property Development; and will impose a Stamp Duty onto the Developer for all contracts signed - based on the face value of the Contracts; PLUS further charges for waivers and deviations from established codes and guidelines.

This Government will have no qualms in exercising and displaying that its "Pen-is Mightier" by drafting legislations that can simply take over private land that is originally Freehold, and the Law protects the Government from being sued for a poor compensation package to the property owners who have lost their land to the Government - at the stroke of a pen.

Cindyfeh SG

Countless letters and complains had been posted or surfaced about the above problem. Yet it is still in existence today. The only way to rectify the high property prices is really to elect a gov from peasants earning $0-$3000 a month. But that is nearly impossible in today's election criteria. The other way out is, since you can't change the system, get away from it! Migrate to somewhere else where you find better!

So who else is thinking of migrating?

av98m SG

Our gahmen does many things that will be illegal in other countries. Smile

robertteh SG

So if our government has committed illegal double-charging on acquired lands in the HBD homeownership-for-the-people scheme, then how is such a government going to tell its citizens or its middle-east friends about such acts of illegality or criticse other countries for corruptions as our government has been doing to showcase its presumed talents ?

crazy monkey SG

knn and HDB so expensive. did it really cost so much to build them ? where did all the money go to ? more transparency and information needed. Mad

Atobe SG

Originally posted by robertteh:
So if our government has committed illegal double-charging on acquired lands in the HBD homeownership-for-the-people scheme, then how is such a government going to tell its citizens or its middle-east friends about such acts of illegality or criticse other countries for corruptions as our government has been doing to showcase its presumed talents ?

It takes "TALENT" to do a "double-take" in accounting practices.

It takes "INGENUITY" to hide the fact from the masses.

It takes "GUTS" to prevent any interference from those daring enough to probe further.

Lowclassman SG

Me!!!!! Mad