A development too far

  • Business
  • Saturday, 30 Jun 2018

View from the top: Aerial view of the retention pond being filled for new development in Taman Wahyu.

A COUPLE of years ago, a group of Taman Tun Dr Ismail (TTDI) residents protested when they discovered that about 1,800 high-end serviced apartments and a separate 350 units of affordable housing will be built on about 12 acres of the 25-acre Taman Rimba Kiara.

They are not opposed to the 350 units meant for family members of former rubber estate families who have been living there for about 40 years.

They are against the additional 1,800 units.

Over in Taman Desa, off Old Klang Road, residents are also opposing a slew of high-rise residential projects being planned on a narrow strip of Tenaga Nasional Bhd land after power line cables were “embedded” in the ground along the border of the land, thus freeing the land for other uses.

The co-ordinating committee member M. Gunasekar says the land was alienated to a private company and the directors then sold the company to the current developer.

In Taman Wahyu, residents want Kuala Lumpur City Hall (DBKL) to review the proposed mixed development on Lot PT 26934 Jalan Kepong. The project involves building 1,000 high-rise units on a “filled-up” retention pond.

All three cases share common threads. They are located within the Federal Territory involving projects that will add thousands of units into the city’s skyline at a time when thousands of completed units from developers remain unsold for the first three months of this year, valued at RM2.77bil.

These units exclude those available for sale from those who had speculated on the last property boom, which peaked in 2012.

At each of these protests by residents, stories about losing their park, their homes or over-development form the common theme. They also question the land deals involved and why there is flexibility of switching land use, and the moving goal post involving density.

They question why planned open spaces were not gazetted after so many years; why the Kuala Lumpur master plan has not been gazetted. Former FT Minister Tengku Adnan Tengku Mansor said in February 2018 that the KL City Plan was done in 2008 and “time has overtaken events.”

Universiti Teknologi Mara professor of property investment Ting Kien Hwa says land and housing can be emotive issues.

At the lowest level, there is the abandoned land or project, or squatters left homeless. At the highest level, over-development.

Demolition job: Kepong community service centre head Yee Poh Ping looking at DBKL officers demolishing the houses at parcel F, Jinjang Selatan Tambahan, Kuala Lumpur.
Demolition job: Kepong community service centre head Yee Poh Ping looking at DBKL officers demolishing the houses at parcel F, Jinjang Selatan Tambahan, Kuala Lumpur.

There are also the social, political or economic aspects.

For the longest time, land has been a tool to gain patronage, political mileage and other favours, or so it seems. Giving out contracts is another.

“It is like the East Coast Rail Link (ECRL) and other infrastructure projects. The only difference is land and housing is now the medium,” says Ting.

May 9, 2018

It is hoped that May 9, 2018 will be a watershed. It was an event which gave this country the turning point it needed in more ways than just changing the government.

A whiff of land-for-patronage came to light when 64 land deals, all within Kuala Lumpur, were reported by the media recently. Details of the 64 plots were made available in a Parliamentary written reply from the FT Ministry before the May 9 general election.

The 64 plots have a combined area of 424.29 acres and a total transaction value of RM4.28bil.

Ting says land, in its raw form, has little value. But when resources are on it, buildings for example, this gives it value.

Agriculture land has a lower value, while commercial-titled land is of higher value. The higher the density, the greater the value because developers can then build higher.

They get more units of condominiums on that plot by going up to 50 storeys, as opposed to 20 storeys.

The Taman Rimba project has several blocks of about 50 storeys, increasing the density ratio there many times over.

Density has its costs and benefits. But when density is increased to benefit some at the expense of many, raising density levels ceases to be a benefit.

When a retention pond is “filled” so that 1,000 units can be sited on it, it may be a security issue, postponed for the future.

Not all 64 of those deals are questionable. Some may be fairly valued. But land, and the wealth that follows closely behind, can be divisive.

Deals and contracts oil the economy. But sometimes, deals can be made to benefit a few, at the expense of many.

If the built-up area is 900 sq ft compared to the space families currently have, it looks like a zero-sum game.

Selva Kumar Krishnan, assistant secretary of the Jinjang Selatan Tambahan Lot 9714, says about 500 families were offered units of 900 sq ft in a low-cost development when they currently live in 40ftx60ft houses.

“The unit costs RM42,000. It is a difficult exchange. Many made that exchange because they have no choice, or were forced to do so because the bulldozers were just outside their houses,” he says.

Lot 9714 comprises 115 acres, of which 54.66 acres were transferred to a developer for about RM280mil in November 2017.

Selva is fighting for Lot 9714, or plot number 61. The land deals around the Federal Territory of Kuala Lumpur are not limited to just 64.

“We are number 65,” says Save Taman Rimba Kiara lead strategist and coordinator Leon Koay.

The people of TTDI are not against the 350 units for families of the former rubber estate workers. They are against the extra 1,800 units.

The total gross development value of the Taman Rimba Kiara project, or the value the units can fetch, is about RM3bil. The 350 units of social housing cost RM15mil.

Datuk Seri Tengku Adnan said the 25-acre Taman Rimba Kiara was never gazetted as a public park, but zoned as open space for 13.3 acres.

“This development would not touch on the 13.3 acres at all,” he had said in a statement in December 2017.

There are many claiming to be number 65. Not all are vocal as the people of TTDI, or as determined as the Jinjang residents, who have been asking for their land grant for some 50 years.

Many do not have a Leon Koay, or a Selva, to champion their case. But a roof over one’s head is a basic need. Their silent frustration, together with other factors, was what brought about May 9, 2018.

The draw of the city

Lina Kee, 56, left Kuala Lumpur to return to her hometown about five years ago. She yearns to return to the city to seek work because there are “fewer options” in her home state. The pay is also low. But unless she succeeds in getting employment, she will not come to the city.

The poor and the rich make up the city. The poor come to the city because they want to enrich themselves with the opportunities they can find there.

Lina has human capital, in the form of skills, which she wants to “rent” to the financial market. So, the Federal Territory of Kuala Lumpur allows the labourer and the capitalist to thrive. The labour market is more important than the property market.

But because land is limited, it can - and is - often exploited.

For some time now since the Global Financial Crisis in 2008, politicians have been dangling home ownership like carrots.

Even affordable housing can be politicised.

About 24,000 units of affordable and low-cost housing were planned for that 64 plots. But not everyone will be able to afford their own home. To dangle that carrot, with a bank loan tied to it, may not be the wisest of decisions for the urban poor.

Promoting development disguised as giving the masses the affordable housing they crave is politicising land and home ownership. They do not jive.

Socio-Economic Research Centre (SERC) executive director Lee Heng Guie says the previous government had, over various past budgets, implemented various home-financing schemes to promote home ownership.

There was this proposal to create a housing guarantee agency – Syarikat Jaminan Kredit Perumahan Bhd (SJKP) – under the Finance Ministry to enable those who do not have a stable income to get housing loans which would be guaranteed by the government.

“Any loans guaranteed by the government, whether explicitly or implicitly, represent potential contingent liabilities directly assumed in the federal government’s balance sheet, if the guaranteed entity cannot service the loans. This will add to fiscal cost.”

Lee offers a strategy. Mitigate risky debts by having the government and the insurance industry implement schemes to cover first-time home buyers against loss of income risk such as unemployment and health-related illness.

“Such insurance schemes not only help to minimise financial risks, but also improve the accessibility and viability of affordable home financing,” he says.

Lee says the government has to evaluate the financial risks and potential fiscal cost, minimise moral hazards and set additional reserve requirements to minimise government risk.

Although that tie-up between the two government agencies, one a credit guarantee entity and the other a housing agency, raises many questions, the then-second finance minister Datuk Seri Johari Abdul Ghani justified the move by saying that the partnership would enable “more... to purchase their own dream home.”

“While SJKP’s guarantee for SPNB homes could have an impact on the contingent liability, it is fine as long as deserving Malaysians benefit from the initiative,” Johari was reported as saying. Hopefully, that proposal is canned.

Luring the masses to take up home-ownership when they can ill-afford it is a disservice.

May 9 changed all that. But it is the politicising of land and housing which gives rise to issues like those 64 plots.

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