Housing woes: The answer's in effective protection

New Straits Times 15/04/2006

YOUR report, "Down memory lane" (PropertyTimes, March 18, 2006) got me recollecting my speech in Parliament in support of the Housing Developers Bill, which was tabled before the House in March 1966.

The glaring injustice visited upon innocent house buyers as a result of irresponsible acts of unscrupulous developers led the Government to introduce legislation to curb malpractice in the industry.

There was widespread support in the country for such legislation, except from much of the industry at the time, and I spoke out not only to express such support but also out of personal conviction for the need to correct manifest wrongs.

Forty years on, and with more and even tighter regulation of the industry, the ills that prompted the Government to introduce the original legislation persist and remain the subject of fierce debate.

I believe what is needed is not more regulation. If anything, we need less regulation to address the central issue: The house buyers' right to protection of their money and the delivery of their houses in accordance with the specifications and the time promised.

"Build-then-Sell" (BTS) or "Sell-then-Build" (STB) is not the real issue. Of course, the BTS model would be ideal from the buyer's viewpoint, but the STB model would also be practicable, so long as he does not risk losing his money. It seems to me that the so-called "10:90" proposition is also a form of STB, since there are is a confirmed buyer for every house to be built.

I agree entirely with the views expressed by Datuk Yap Lim Sen, himself an experienced successful property developer, now retired ("Making sense of the housing conundrum", in the same issue).

The industry needs a complete regulatory revamp. More regulation means more cost, less efficiency. Dismantle the present huge, but less-than-effective regulatory infrastructure. Start afresh with minimal regulation, but with regulation that will effectively address the central issue: Protection of the house buyer's money and compliance with quality and delivery standards.

An efficient housing development industry is enormously important to the country. During my many years in accountancy and banking, I had the opportunity to observe closely the workings of the industry.

As a former Member of Parliament, I was acutely aware of the plight of people who were cheated of their houses and savings due to the misdeeds of some players in the industry. I understand why the Government had to regulate the industry. However, more and more stringent legislation has not resolved the problems.

I fear that in the minds of some people, the answer is even more regulation. It is my belief that the burden of more regulation will cripple the industry, something that will be bad for the country itself.

We need the courage to say that the entire regulatory framework, well meaning as it may be, has not worked to protect the savings and rights of house buyers. We need to go back to basics and focus on the real issues.

The housing industry objected strongly when the 1966 Bill was proposed.

I think the industry will have missed an enormous opportunity if it still opposes reform on the lines suggested by Datuk Yap.

After all, why should the housing industry be any different from, say, the automotive, pharmaceutical or food industries, in terms of their interaction with buyers in the market place and the regulatory environment in which they operate?

Indeed, the industry may well find that a revamp involving fewer constraints in return for acceptance of the central issue of buyers' rights would be of great benefit.

Forty years is a long time to correct an inequitable and wholly unacceptable state of affairs. Our Prime Minister clearly understands this, and has called for reform. I urge all present MPs to actively support the call for reform.

What the country needs is a more efficient industry, and above all, effective protection for house buyers.

TAN SRI HANAFIAH HUSSAIN,
Kuala Lumpur