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En bloc
debate, HK style By Tan
Hui Yee, Correspondent
WHEN land is scarce,
your right to live in your home ends when your neighbours sell theirs.
This logic applies not
just to Singapore - which defied expectations by recently producing its
first collective sale offer since the recession took hold - but also to
Hong Kong, which is now deep in debate over proposed changes to its
compulsory property sale rules.
On the surface, the
operative concept in both cities is the same: Urban renewal is
expensive, and private capital speeds up the process. The government
lends a hand by allowing an estate to be sold even if the sale does not
get the unanimous approval of all the owners.
But Hong Kong and
Singapore differ in the weight each accords to minority owners.
Singapore requires an 80 per cent consent for a sale of a property at
least 10 years old, and a 90 per cent approval for a development less
than 10 years old.
Meanwhile, Hong Kong
has maintained a 90 per cent threshold since the 1990s, with a tribunal
giving the final go-ahead after considering a host of factors, including
the property's age and state of repair.
The Hong Kong
administration has recently proposed that the threshold be lowered to 80
per cent - but only in cases where all but one unit has been acquired by
one party, and where the development is at least 50 years old.
A observer may think
this is just a case of laissez-faire Hong Kong playing catch-up, but the
territory's deliberations on the matter actually hold many lessons for
the Republic.
For starters, Hong Kong
remains protective of minority rights. Even if the proposed change is
passed, it would still be harder for the majority of owners in a Hong
Kong estate to push though a sale, compared with those in Singapore.
And yet, the opposition
to the proposed change in some quarters in Hong Kong has been fierce.
The change, they say, is tantamount to a subsidy for developers as it
would mean that they would not need to entice as many home owners with a
good sale price.
One South China Morning
Post reader declared in a letter published on Aug 3: 'The powers to
compulsorily take away private homes are a draconian statutory provision
that should be vested only in government - and used only for a defined
public purpose. Making a profit for developers is not a public purpose.'
The language is
refreshing, considering the tendency here to cast in a negative light
those opposing an en bloc sale.
At times, they are made
out to seem as greedy home owners holding out for more money, or
eccentric seniors unduly attached to their property, or simply stubborn
people who will not let their neighbours get on with their lives
elsewhere.
Some here may point to
Singapore's public housing programme, where upgrading works are passed
with a 75 per cent vote. If the majority can rule in public housing, why
can't it rule in private estates?
But that is hardly a
parallel, given that public flat owners who have their homes renovated
via a majority vote get to keep their homes whether they approved the
upgrade or no. Private home owners have no such comfort.
Another interesting
point about the Hong Kong debate is that it gives weight to
environmental concerns.
The proposal notes that
the normal working life of reinforced concrete buildings - during which
they are unlikely to require major repairs - is assumed to be 50 years.
Consequently, it sets 50 years as the minimum age for a building which
may be subject to a compulsory sale application under the relaxed
guidelines.
Given the huge amount
of energy and material that erecting a building requires, this safeguard
reduces the likelihood of unnecessary demolition waste.
In Singapore, money is
by far the biggest measure used to determine whether a collective sale
can go ahead.
The Strata Titles
Board, which gives such sales the final nod, takes into account the
transaction's sale price, the method of distributing the sale proceeds
and the relationship of the buyer to any of the unit owners.
Objections to the sale
have to be couched in the language of dollars and cents. The minority
owner has to suffer a financial loss or be unable to redeem the mortgage
against his home in order for the sale to be called off.
The potential loss of
built heritage or good architecture is not a consideration. Neither is
the environmental cost of demolishing a building that is in good working
condition.
There are mitigating
factors of course.
Singapore has a
pro-active conservation authority which keeps a look-out for
historically and architecturally valuable buildings, and adds them to
its protected list. This may lessen somewhat the need for stringent
collective sale rules to protect urban heritage.
Singapore is also
two-thirds the size of Hong Kong. This means the Republic has a smaller
buffer of land and cannot afford to leave decaying buildings untouched
for long.
Still, the debate in
Hong Kong does hold up a useful mirror to our practices, whichever way
that debate pans out.
It has been 10 years
since the laws were amended here to allow a private estate to be sold
without the unanimous consent of all its owners.
In the most recent
property peak in 2007, 111 estates changed hands for $12.4 billion,
according to property consultancy CB Richard Ellis.
As the Republic braces
itself for the next en bloc wave, it could also cast its eye beyond its
shores for clues as to how else it might reshape the Singapore skyline.
Urban renewal, after
all, is far from being only a numbers game.
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