Developers turn state’s low cost housing policy into a charade

CAP Acting President En Mohideen Abdul Kader at Press conference

CAP fully supports the Penang state government’s 30% compliance clause imposed on housing developers. Under this clause, 30% of the housing units built by developers have to be of the low-cost (RM42,000) and low medium cost (RM72,500) types.

However, the state leaves it to the developers to do the sales of these units and it keeps a blind eye to the fact that developers are not selling the units at these prices unless the purchasers also buy expensive “renovation packages” and car parking lots. This reduces the state’s low cost housing policy to a charade.

The state is fully aware of this arm-twisting by the developers. In a letter dated 20/8/2010 to a purchaser who complained, the housing department acknowledged that there were plenty of complaints of this nature. The letter went on to say that developers have been called in for meetings and given warnings to stop the practice.

All warnings have fallen on deaf ears, and the state tells the public that the car parks and “renovation” packages are extras to which the purchasers agree otherwise, they would be going into unfurnished houses. But the purchasers tell a different story. The “renovation” packages are nothing more than tiling of the cement floors with common tiles. They are not about “furnishing” the houses.

The state should not parrot the developers’ claims that the purchasers agreed to the renovation packages “voluntarily”. An agreement made under compulsion is not voluntary.

Car parks can cost between 40% to 70% the cost of a housing unit. Considering that the area of a car park is only about 20% to 25% the area of the residential unit, they are priced very high. The state has not put a ceiling on the price of car parking lots and developers can name their own prices. Car parking facilities in apartments are a requirement by the government and are not a luxury item.

Renovation packages can cost 40% to 70% the price of the housing units, for work that costs a fraction of that sum.

Thus, it is the developers who are benefitting directly from the state’s 30% compliance clause. Instead of helping the lower income group, the clause is helping developers to rip them off. This is because the state’s 30% compliance clause stops at the construction stage. Even those with medical conditions and OKU cards are not spared by the developers.

The state must stop the developers from making a charade of this clause. CAP demands that if the state is serious about helping the low income group buy housing units, it should take the following measures immediately:

· Set the maximum price for car parking lots with the help of the valuation department. The prices should be proportionate to the prices of the housing units.

· Take over the balloting for the units from the developers, giving special consideration to applicants with medical conditions and OKU cards – e.g. giving them easily assessable units in the lower floors and car parks on the ground floor.

· Extend the scope of the 30% compliance clause to include signing of the Sale and Purchase Agreements at the controlled prices, to be carried out under the eyes of the state housing department so as to stop arm twisting by developers.

· Stop sending the “successful” applicants to the developers’ offices where they are bullied into buying “renovation” packages as a pre-condition to signing Sale and Purchase Agreements for housing units at the state’s controlled prices.

The state must stop defending the developers by claiming that the “renovation packages” and car parking lots are optional. The state should not be speaking on behalf of the developers. If it does, then the state must not blame the public for feeling that the state is sympathetic to the developers and not to the low income house purchasers who have waited years (some over two decades) for a chance to get a roof over their heads that they can call their own.

The only way to stop the bullying and exploitation of the low cost and low medium cost house buyers  is to make sure that every one offered a unit by the state signs the Sale and Purchase Agreements under the eyes of the state housing department.


Press Statement, 5 September 2019