Lowering land cost is like raiding S'pore's reserves: Mah

[theDoors]

The Straits Times
www.straitstimes.com
Published on Apr 16, 2011

http://www.straitstimes.com/print/GeneralElection/News/Story/STIStory_657477.html
PAP
Lowering land cost is like raiding S'pore's reserves: Mah

By Jessica Cheam
LOWERING land cost as a way to reduce new Housing Board flat prices is tantamount to raiding Singapore's reserves, warned National Development Minister Mah Bow Tan on Saturday.

This is because all land is sold at prices set by the Chief Valuer, and the land sale proceeds go into the reserves.

In the latest salvo on the hot-button housing issue, Mr Mah stressed that as the number of new HDB flats is not a small, any lowering of prices will inevitably affect the value of existing HDB flats.


Mr Mah was responding to a call from Workers' Party chief Low Thia Khiang who had suggested that if the Government was prepared to collect less money for land sales, the savings could be passed on to first-time home buyers.

Speaking to reporters on the sidelines of a ground-breaking ceremony for an upgrading exercise for Tampines, which will see a new town hub with facilities such as a sports hall and a new park, Mr Mah declined a debate with the National Solitary Party, which has announced it is contesting the GRC.

Mr Mah said there is 'no need for a debate as our positions are well known' and 'there is nothing to hide'.

With the minister at the community event on Saturday morning were newly-introduced People's Action Party (PAP) candidates Heng Swee Keat and Steve Tan.

Mr Heng, the former managing director of the Monetary Authority of Singapore, said he welcomed the contest by NSP at Tampines and was looking forward to getting to know the residents better.

Copyright © 2010 Singapore Press Holdings. All rights reserved.

Land Policy
http://en.wikipedia.org/wiki/User:Vsion/Ngiam_Tong_Dow

Housing 85 per cent of the population in 900,000 flats is no mean achievement by the HDB. Few know that the cornerstone of our vast low-cost housing programmes is the Land Acquisition Act. The Act allows the State to acquire private land for public purpose at pre-development prices. Dr Goh asked me, then a young officer, to draft the Cabinet memorandum proposing that the compensation to be paid for land acquired exclude its potential value.

We saw no reason why landlords should benefit from public infrastructural investment in roads, drainage, sewerage, power and water pipelines, etc. We would pay only the market value of raw land before public development. Our policy discouraged land speculation. The development charge imposed for change of use falls within the same concept. In effect, the State creamed off about half the potential value.

Sadly, the clarity of thought shown by Dr Goh in pricing land was lacking in more recent years. Relying on the concept of opportunity cost, the Chief Valuer, at the behest of either the Ministry of National Development or the MTI (I am not sure which), valued land with Raffles Place land as the benchmark. The assumption is that every square metre of land in any part of Singapore has the potential to be Raffles Place.

The excerpt was taken from this book
http://www.infibeam.com/Books/info/...arin-and-the-Making-of-Public/997169350X.html

 

[Tiu Kwang Yew]

HDB flats are public housing .

These pigeon holes sit on on stateland which is leased to HDB leaseholders, the HDB flat occupiers dont own the land !

Hence Mr Low is right to say lowering land costs will see a more affordable price.

By right, if a concerned govt build public housing for the people on stateland which is returnable, cost of these land should not follow the SLA or LTA standard of price selling to private developers !

Mr Low did not anytime mention about all land price must be reduced but WP is only concerned about real affordable public housing !

For public housing, land cost cannot be a major factor !

For private housing, who fuck care how SLA wants to sell the stateland at the price they love !

Also, MBT did not answer LTK question---what is the cost of construction ?

 

[Forvendet]

Highly benchmarked land cost is raiding Singaporeans for government reserves. :oIo:

 

[theDoors]

Reserves must grow at the expense of Singaporeans owing a home!

 

[glockman]

"Singapore's reserves" is like a terrifying and dirty word. It conjures up an image of a mysterious bottomless pit. Something to use to scare and shut people up.

 

[theDoors]

Mirror Mirror on the wall, who is the biggest reserve raider of them all ?????

 

[theDoors]

Which leads to the question, is the current shortage crafted policy to increase the reserves?????

 

[Bigfuck]

Raising land prices indiscriminately can be tantamount to feudal lord tax hikes of yesteryear in China and Europe. High land prices does not generate any economic product and service by itself. High land prices and closely related high rentals causes low cost competitiveness and is one of the major reasons hawkers can longer sell you the good quality and healthy food Singaporeans enjoyed 30 years ago. Masturbating on the private sector and MNCs hiking pay in tandem to increasing costs in Singapore is ludicrous. By the way, CPF minimum sum hike of 4% for inflation is also a tax. But there is no compulsory legislation available for salaries to be raised 4% for inflation. But salaries of civil services with their taxing instruments and inflationary instruments increase like clockwork. Such forms of topping up the national reserves and meaninglessly raising the GDP growth destroys real wealth of the citizens and reduces the economic and entreprenuerial potential and possiblities in Singapore.

 

[theDoors]

Raising land prices indiscriminately can be tantamount to feudal lord tax hikes of yesteryear in China and Europe. High land prices does not generate any economic product and service by itself. High land prices and closely related high rentals causes low cost competitiveness and is one of the major reasons hawkers can longer sell you the good quality and healthy food Singaporeans enjoyed 30 years ago. Masturbating on the private sector and MNCs hiking pay in tandem to increasing costs in Singapore is ludicrous. By the way, CPF minimum sum hike of 4% for inflation is also a tax. But there is no compulsory legislation available for salaries to be raised 4% for inflation. But salaries of civil services with their taxing instruments and inflationary instruments increase like clockwork. Such forms of topping up the national reserves and meaninglessly raising the GDP growth destroys real wealth of the citizens and reduces the economic and entreprenuerial potential and possiblities in Singapore.

Sounds like modernised debt slavery...

 

[Bigfuck]

Rule by debt control and raise the debt to suppress any opposition. Raising fees to register for running for election is clearly one.
It denies the common man who knows that pain of living in Singapore a voice.

 

[coolguy]

Come on.
We can't even touch our CPF, which we earn with our sweat and bloods.
What makes we think we can even smell the reserves, which are well hidden away in the ivory tower?

 

[Bigfuck]

You can imagine how cheezed the old man was when Toh Chin Chye lamented in parliament that government is telling people how to spend their own money. We have been cheated since 1984 when our real PAP champions were removed from the picture.

 

[theDoors]

You can imagine how cheezed the old man was when Toh Chin Chye lamented in parliament that government is telling people how to spend their own money. We have been cheated since 1984 when our real PAP champions were removed from the picture.

That was also the year LHL joined politics. Purge of the founding fathers....

 

[ManBearPig62]

When you are in a hole, the first thing to do is to stop digging.

So he's implicitly admitted that the Government makes money from land sales. Whether it goes to reserves or not, doesn't matter.

That his "market subsidy" is not a subsidy at all.

Well done.

Make sure every Singaporean knows about this.

 

[coolguy]

Mr Mah pay is directly linked to the reserve.
To dirsupt the flow of $ into the reserve is akin to hurting his pocket.
How can he allow this to happen?

 

[theDoors]

When you are in a hole, the first thing to do is to stop digging.

So he's implicitly admitted that the Government makes money from land sales. Whether it goes to reserves or not, doesn't matter.

That his "market subsidy" is not a subsidy at all.

Well done.

Make sure every Singaporean knows about this.

Indeed... Hammer on this point...

 

[seebaysong]

Mah is rite... but he shld at least show us the cost breakdown of HDB apts so tt pple will know how much $$$ govt is making from them

 

[theDoors]

I think HDB lied when they replied this 2 letters

http://finance.dir.groups.yahoo.com/group/RealEdge/message/2448

Jan 1, 2007
Did HDB land pricing use Raffles Place as rule?

I REFER to the letter, 'Why sale of state land is done at market price' by Ms Kee Lay Cheng of the Housing and Development Board (ST, Dec 28).
Mr Ngiam Tong Dow has a very interesting thing to say about land pricing in Singapore in his book: A Mandarin And The Making Of Public Policy, on page 153:
'Sadly the clarity of thought shown by Dr Goh Keng Swee in pricing land has been lacking in more recent years. Relying on the concept of opportunity cost, the Chief Valuer, at the behest of either the Ministry of National Development or the Ministry of Trade and Industry (I am not sure which), has valued land across Singapore using Raffles Place land as the benchmark. The assumption is that every square metre of land in any part of Singapore has the potential to be Raffles Place.'
Would the HDB like to comment how this has affected the pricing and allocation of subsidy of new HDB flats?




Viktor Ye Kok Kheong

Jan 2, 2007
___________Settle question of HDB subsidy once and for all [/SIZE]


I REFER to Mr Viktor Ye Kok Kheong's letter, 'Did HDB land pricing use Raffles Place as rule?' (ST, Jan 1).

The Housing Board said that 'HDB does not reveal the land and construction costs of specific projects as they vary from location to location... That is why it incurs an overall deficit each year for its home-ownership activity, as reflected in its annual accounts which is available publicly'.

The reason given for not revealing the land and construction costs is somewhat illogical, because the HDB is not being asked to disclose the costs of every project or location. Why not just reveal the breakdown of total costs, and a few examples of some projects and locations, now and in the past?

What the HDB is saying is akin to 'since we cannot tell you each and every item, we won't tell you anything at all'.

Every once in a while, the question of the cost and pricing of HDB flats comes up in the media. So, why not put a stop to the on-going speculation that HDB flats are not really subsidised?

In the interest of maintaining Singapore's reputation of having the highest standards of transparency and corporate governance, the HDB should keep up with the standards of disclosure in the private sector.

To illustrate the point of transparency, no real-estate investment trust or publicly-listed company would be able to give the reason given by the HDB for not breaking down the information on the major cost components in its accounting statements.

How can we tell whether HDB prices are 'at market price' without a breakdown of the land and construction costs for comparison purposes?

As to the market price for land taking into account the 'substantial resources... invested to provide major infrastructure, such as roads, MRT, sewers and utilities, for the new housing development', thus significantly enhancing the land value beyond the acquisition costs incurred by the Government, aren't the billions collected every year from road tax, electronic road pricing, property tax, 30 per cent water- conservation tax, etc, supposed to be used to provide such infrastructure?


Leong Sze Hian

an 10, 2007
___________New flats' market value minus sale price = subsidy [/SIZE]


I REFER to the letters from Mr Viktor Ye Kok Kheong and Mr Leong Sze Hian (ST, Jan 1 and 2, respectively) pertaining to the subsidy for new HDB flats.

First, Mr Ye asked if it is true that the Chief Valuer values all land in Singapore using Raffles Place as the benchmark. We wish to state that it is not so.

It is a fundamental valuation principle that lands are valued based on the specific attributes of the site, such as location, the permitted use of the land, and tenure.

The Chief Valuer's valuation has to be supported by comparative land-sales evidence.

It is simply not tenable to benchmark every plot of land to Raffles Place pricing, as this would drive property prices beyond the reach of most Singaporeans.

For example, state land alienated by the Singapore Land Authority for housing in Tampines will be valued taking into account the market values of housing in Tampines, while state land for industrial use in Tuas will take into account industrial- land values in Tuas, etc.

Second, Mr Leong asked HDB to reveal its land and construction costs to prove that HDB flats are subsidised. He has missed the point.

To understand the full extent of public-housing subsidy for new HDB flats, one should be comparing the market value of the flats with the sale prices charged by HDB, rather than look at the input costs of land and building.

New flats are subsidised as they are being sold at prices that are lower than what they would otherwise fetch in the open market.

If this subsidy is not real, why should many flat buyers choose to buy new flats from HDB instead of resale flats in the open market using the CPF Housing Grant?

Third, Mr Leong asserted that HDB has not kept up with the standards of disclosure in the private sector. He is wrong.

HDB's financial statements are prepared in accordance with the Financial Reporting Standards, audited by the Auditor-General and tabled in Parliament for information.

HDB's standards of disclosure and governance are no less than those required of publicly listed companies and real-estate investment trusts in Singapore.

Overall, HDB is unable to recover the development cost of new flats that it offers to the public, and has incurred a deficit averaging $390 million in its home-ownership programme in the last five years. These figures are reported in HDB's audited financial statements, which are publicly available for inspection and scrutiny.

Kee Lay Cheng (Ms)
Deputy Director
(Marketing & Projects)
For Director (Estate Administration & Property)
Housing & Development Board

 

[theDoors]

So now everyone pays thru their nose...

Jan 4, 2007
No cause to doubt credibility of HDB


I DO NOT think that it is justified to press the Housing Board for its land and construction costs or doubt its word that the flats are subsidised.

In the first place, Singaporeans are not obligated to buy HDB flats. If they suspect that the flats are not 'at market price', they can buy private apartments.

However, the ongoing demand for the flats speaks for their market value. If a comparison were to be made, private apartments are still beyond the reach of the majority of Singaporeans.

Secondly, in view of the subsidy, owners should sell their flats back to HDB if they want to upgrade. However, HDB is good enough to allow owners to sell their flats in the open market and make a tidy profit.

Thirdly, the flats have improved in design and size since they were first built. If the flats are not 'at market price' and therefore unattractive, why are some Singaporeans using the names of their siblings, aunts and uncles who are still single to purchase these flats with the intention of selling them later?

I voted for a government which is trustworthy, honest and capable in every sense of the word and I have no cause to doubt the credibility of the HDB.

In fact, I appreciate what the Government has done to house poor Singaporeans like me in the 1960s when we were desperate for a roof over our heads during the Indonesian Confrontation.

Today, our housing system is a pride of the nation. It is unfair to throw brickbats of any kind at the HDB when it deserves bouquets.

Grace Cheah Gek Neo (Miss)

 

[Man in the streets]

Everything will come to light if MAH and his HDB disclose HDB flat construction cost and land cost !

HDB houses are public houses, MAH is not answering LTK questions !

Mah is right ? Think again, he is dealing with public housing and yet he is talking about profit and reserves---this is a separate thing!

Does Mah real know about country reserves ?

LTK is talking about public housing, we are talking about public housing for the commoners not investments and playing commodity !