Monday, November 10, 2008

Bumiputra Housing Quota

The various states imposed various housing quota for Bumiputra in order to help Bumi increase homeownership. If I am not wrong, Kedah have the highest quota for Bumiputra at 50%.

Often the take up rate of Bumiputra quota is slow. The target s is never reached. This causes the holding cost of the housing development to go up and all house buyers end up paying for it.

State Governments should be realistic and more sensitive to the market needs. They should set clear guidelines, conditions and time frame for the reserved Bumi lot to be released to Non-Bumi. For example, 3 - 6 months after construction and after 3 advertisements, the reserved Bumi lot of the housing project should be released to Non-Bumi. Otherwise it will kill the housing industry.

Procedure should be standardized. The procedure and decision should make by a committee, not be at the whim and fancy of the Housing EXCO. Often, red tape and delay in this release causes houses to escalate and breeds corruption.

In a largely rural state like Kedah, setting Bumi housing quota at 50% is unrealistic. The purchasing power of the Bumiputra should be taken into consideration. Kedah State Government does have the financial resources to buy up the bumiputra lot but it is also unfair as valuable resources are tight up in non-productive activity of buying Bumi lot. Eventually the state government may be saddled with a lot of unsold Bumi lot.

Hence it is wiser to set a lower Bumi quota and a shorter period maximum 6 months before they are released to non-bumi. This will take care of the needs of bumiputra, at the same time will not caused the holding cost of housing to escalate.

18 comments:

Jed Yoong said...

Datuk,

I have to say this is an intelligent post.

Robert Teh said...

Soi Lek,

Maybe we should try to look closer at the policy requirement on housing quota for Bumis in Kedah.

The MB may have good reason in wanting to 'force' housing developers to build more affordable houses like single-storey terrace in rural areas or LMCs (Low Medium Cost Apartment) in urban and semi-urban areas. This is more reflective of the population in Kedah where the majority of the lower income earners is made up of Malays - thus 50% seems justifiable as far as the good MB is concerned. Also the non-Malay lower income earners can afford to own houses too.

Please don't think that because the MB is from PAS, he's not well-versed in worldly affairs or the intriques of modern business. He is more concerned about the community at large and is trying to build a fairer and more equitable populace in the state.

The MB needs to strike a balance between business and social needs, between profits of the business community and basic housing needs of the society.

magenz said...

Datuk,

I think Melaka has the a quota of min 60%- 70% (rural areas-Malay majority). You can verify this with REHDA Melaka.

KoSong Cafe said...

From my personal experience in KL, after the required advertisements for a period of one year, when we applied for waiver, we were told to rent out the houses instead! This was by far the most ludicrous reply ever! Fortunately for the developer, the titles were freehold and we managed to sell through willing Bumiputera parties - what a waste of time and resources!

In another project, we were advised to mix the purchasers instead of putting them in rows of houses. It was an ex-government land and the quota was 60%. We allotted the houses: 2 Bumi and 1 non-Bumi alternately. Bumi purchasers complained to us that they would prefer living in a row of houses instead!

I think we are wasting a lot of time and resources trying to comply with terms and conditions which are not standard, not well thought out, and worst of all, serving narrow interests not necessarily according to our Constitution.

MCA should be able to speak out and if necessary, get out of BN. The party can stay independent but will lose some cabinet positions. It will gain more respect instead of being servile to a dominant party. However, the giving up of position seems so difficult to forego as it will affect the ambitions of future leaders.

non-conformis said...

Does our PM get discount too, when he buys a house?
he earns 1000x more than me though.
what say u MCA?

Charles Hector said...

Why are we even allowing this Bumiputra Housing Quotas - it is unconstitutional. It is is discriminatory.

Article 153 is specific about special privileges - and there is nothing about this 'housing quotas'.

MCA, MIC and the other non-Malay BN parties just allowed it to exist..

We should oppose any extension of privileges and special rights - beyond what is clearly provided for in the Federal Constitution.

We must also move away from using the term "Bumiputra" - which is no where in the Federal Constitution - use the words of the constitution "Malays and natives of any of the States of Sabah and Sarawak"

Go read my posting in my Blog which discusses the Malay, the Bumiputra - and also why they insist using the term 'Bumiputra' rather that the constitutionally provided phrase... There are several postings on the topic, one of which is at http://charleshector.blogspot.com/2008/11/who-is-bumiputra-is-it-malays-plus.html

Dr.Sid said...

correct!!correct!!correct!!

http://writtenbyhim.wordpress.com/

KoSong Cafe said...

It is populist policy to provide for more low cost housing and I am all for it.

We have abundant land all over Malaysia and if the government is serious, it should be able to provide land at minimal cost for interested developers to build.

For every dilapidated house I see, my heart goes out to the occupants, and I wonder why our government failed in providing shelter for all. Minimum standards can be set and houses can be built to provide basic shelter, water and electricity. Just cut the red tape, the corruption and the argument over who should get what, and the houses can be built in no time.

Private developers are in for the money. Any unreasonable quota for land bought at market price, means low cost houses are being subsidised by the rest if not factored in. Same goes with discounts for Bumiputeras. Holding costs affect profitability and cashflow. Who would want to be in business for unexpected rules and risks. Already, because of the sharp rise in material costs, some contractors rather abscond than complete their projects, knowing they are going to lose money.

Many politicians and civil servants assume contractors and developers invariably make tons of money. My late brother used to look after obtaining CFs and was well known for getting them fast because of his experience in knowing which department to 'kautim' in the right order as development progressed, and used to boast of himself as 'consultants' consultant' and we all know how he managed that.
When a minister make statements in the press about CF within x number of days, do not believe him because the civil servants can delay within their authority and any confrontation is at one's peril.

Some well connected developers could get away with quotas and other requirements despite penalties or blacklisting in place.
We can go on and on about why bumiputra housing quota remains a problem without solving it, if there is no will and concerted efforts from the top to see it through.

eddy said...

Doc, there is great amount of wisdom in what Saudara robert teh says, since we know that the buying power of the majority of the Malays in Kedah is not high, I think the Kedah PAS Government is sending a message that Development price of houses must match the buying power of the majority of the Malays. Maybe we are looking at more low cost housing and medium cost houses price starting from RM50,000.

Kedah Government should be congratulated for their stance and I am sure they will help the Developers to achieve their profit target by giving more state land at a premium. I hope there will be less people who speaks like saudara kosong coffee who is all profit,profit profit and getting out of BN.

Tungsten said...

The Bumi Housing policy should be scrapped and replaced with one that is based on need and poverty based. This present race based policy is unfair because poor non malay buyers are subsidising rich malays to buy the houses.Why should rich malays be subsidise to buy houses? Is it not fairer for all poor belonging to all race eligible for the discount?The presenr policy is discriminatory and racist in nature. It dhould be scrapped altogether.

NAR2645 said...

Besides the quotat system, there is also special discount for the Bumi lot. In Johor, it is 15% discount, and obviously this discount is being transferred to the price of non-bumi lots. Isn't it unfair to the non-Bumi's??

kevintan said...

good post dr chua but i strongly disagree with robert.market will correct itself from disequalibrium between supply and demand.pls respect the democratic system.robert says if you have the capability to buy a luxurious house in kedah but you can't find it because the gov impose certain policy to stop such a development is it fair to you?or maybe says you have a piece of prime land located at the centre of alor setar town i believe it will be left vacant or unsold for the next 20years.after all i have been into this industry for 15yrs in kedah most of out bumi take up has not been so bad depending on area but guess what the so called government imposed low cost left unsold.Is the state government going to absorb them?in anywhere in this world there are always dominant race at certain place if you are talking about racial polarization pls!!!unless gov buy or build them and give them out free to different races otherwise it is just the fact we have to accept.on the other hand if they are talking aboutecnomic well being forget about it.we will instead seeing negative chain reaction in the state's economy rather then positive multiplier effect(as we know construction involves so many related industries)

tamdalyell said...

Intelligent but not intelligent enough. The bottom line?: the strong always wins? The rich devours the poor? The tortoise never gets to reach the finishing line? That this tortoise is not part of the system? .... We want leaders who are strong enough to cater for both ends of the poles. You mean the lesser end of the pole is not part of it? Cut it out 100 times, and it's always there ... Or is it less of a citizen than the more fortunate ones? You are applying salt to the wound.
You don't make it sir. Sorry.

指南山人 said...

Good post! Doctor.
The housing policy must be careful,
Today , The US economic tsunami because of FED wrong policy on 2001.

mas said...

don't you know in kedah there are a lot more lower income malays/bumi than non bumis? 50% quota is an excellant number in reducing the disparity among the races. Don't be chauvinistic chinese. think like a malaysian la.

Andrew said...

Referring to comment by mas:

If there are a lot of poor bumi's in the state, shouldn't we enact programs that help the poor (regardless of race) gain house ownership? Some obvious ones I can think of are:

low-cost housing
low-interest loans for poor

Why do we need to have a quota for bumis? We can easily have programs for the poor, and no right-thinking Malaysian will protest. Having quotas for certain races opens up lots of opportunities to be abused, and (moreover) is perceived as racist.

No-one will complain if the government has a quota of low-cost houses for every development (ie. 50% of houses in every project must be low-cost). This achieves the same end-result as the 50% bumi-quota, without being racist.

Robert Teh said...

My reply to Andrew:

Yes, I can agree with you on your comments on having the 50% quota on low cost or affodable housing for all races - not just for Bumis.

I also agree that the federal or state govt. must ensure that loans for buying these houses must be made available to genuine buyers. There must be strict control and check in place, otherwise you will find greedy people already owning houses, will take the opportunity to buy up these houses and re-sell for a profit.

No single govt. policy is perfect as whatever policy the govt. made is subject to abuse by govt. officers and greedy profiters.

Luqman Michel said...

Datuk,
This is all well and good. How about housing developers who do not sell to genuine house buyers be they bumiputra or non bumiputra. Read my article at :http://www.parentingdyslexia.com
and see what you can do.

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Therefore, I welcome party members and members of public to post your constructive suggestions and opinions on my blog on how to rebuild and reform the party, eventually enabling MCA to regain support from all party members and the community.


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