Need For A Healthy Housing Development System

14/02/2001 Sinchew-i 

Scenes of abandoned partially complete housing projects have been around for a long time; more so during the economic downturn.

Such an eyesore can be seen almost anywhere in the country. It does not spare even moments of economic boom because factors and causes of work suspension are many. 

Lessons have been learnt from the economic recession in the 1980s. By 1992, laws have been established to require developers to set up accounts with the government as a measure to ensure that home-buyer's deposits are truly utilised on housing projects. 

These measures to some extent have successfully checked the rise of property speculation and misuse of home-buyer's money. As a result, the incidence of abandoned housing projects has somewhat slowed down. 

However, since the recent Asian financial crisis in 1997, property glut emerged again and it is now becoming clear that the inherent problems relating to housing development have yet to be fully addressed.

In anticipation of a possible recurrence of similar crisis, the government decided last year to reactivate the housing revival fund. The  government may have to set aside RM1.3bn for this purpose to assist housing developers to resume their legal obligations.

The government through the Syarikat Perumahan Negara Berhad has identified 47 such abandoned housing projects. Only potential  projects will be revived.

It was reported that priority will be given to abandoned housing projects which were almost 80% or even 70% complete and where purchasers were still interested to own the houses.

If the revival scheme is successful, some 9,000 house buyers, could recover their property costing an estimated RM1.3bn.

But figures show that there are nearly 50 such projects in the country at this moment. Of these, only 10% can be revived. The prospect for the remaining 90% involving 9,000 house buyers getting a house soon is bleak.

Deputy Prime Minister Datuk Seri Abdullah Ahmad Badawi has called for developers who failed to resume projects they abandoned during the economic and financial crisis to be penalised. However, the developers will not be able to revive the abandoned projects unless they can obtain financial assistance, or other forms of loans.

There are other developers who foresee that the future is not optimistic, and even though it is within their means, they would rather choose not to resume the abandoned projects so as to protect themselves from being sucked deeper into the mud. They do so only at the expense of the poor house buyers.

It might be attributed to financial mismanagement or unproductivespeculative approach practised by housing developers that engendered the current situation. Regrettably, consequences of such misjudgement were borne by house buyers, whereas the developers were seen more concerned for their immediate gains. Apparently there seems to be a breach of their sales obligation and responsibility. If so, this may amount to a lack of moral consideration on the part of the business community.

Housing development is an important sector in the national development agenda. It has a social role in that it is vital to other sectors in the economy as well as social well being of the people.

It may be too late now for the government to take action against the errant developers as the number of such developers is large. The government, nevertheless, can from now on be more stringent in its regulation and control of housing developers, such as tightening up the scrutiny of housing developers of their management capabilities and financial position.

Measures such as requiring developers to first obtain guarantee of undertaking from financial institutions before approval can be given for each development project should also be considered.

Further, the relevant authorities should maintain a closer follow-up with the progress of each housing project and to be more sensitive towards the sale of property and on-going projects so as to eradicate problems related to housing development.

To do this, housing developers can be asked to submit progressive report to the authorities. Meanwhile, there should be more transparency on the part of housing developers such as to provide more detailed information to house buyers to protect their investments.