Recently, there were some murmurings about people being dissatisfied with bumi discounts and quotas in the housing industry. But as usual, the mainstream newspapers (except The Sun) did not carry the story and you'll never see it on TV nor hear it on the radio. Malaysiakini carried a letter to the editor.
I am totally, unequivocally and violently against bumiputra discounts for housing.
Why should (only) bumiputras get discounts?
1. The rich bumis don't need it, and they sure as hell don't deserve it.
But by virtue of this being a simplistic % formula applied on the gross price of a house, the rich bumis will get the biggest absolute ringgit discounts, simply because they buy more expensive houses AND more houses compared to poor bumis. IS THAT NOT A RIDICULOUS, UNFAIR and most UNEQUITABLE practice?!
2. The poor bumis need it, but why aren't poor non-bumis who also need it, getting the same benefit?
This is the main reason why a 'poverty eradication' program like the NEP that is based on race, and not actual poverty, is a FALLACY and a FRAUD. Isn't an expansion of the low-cost housing program available to all Malaysians a better and more equitable solution? Or maybe apply discounts to all houses below RM120,000 that can be enjoyed by all Malaysians, where each family unit can only buy one discounted house.
3. Social re-engineering. To encourage bumis and non-bumis to live together.
Well tell me, why aren't non-bumis getting quotas and discounts in predominantly bumi housing estates to fulfil this noble purpose? Don't noble intentions go both ways?
Like I said... totally, unequivocally and violently against bumiputra discounts for housing.
Housing quota questionedAnd from Mr Lim Teck Ghee (of 45% bumi equity achieved fame) in a letter to Malaysia Today and Malaysiakini.
Jacqueline Ann Surin
KUALA LUMPUR (Oct 29, 2007): The imposition of a bumiputra housing quota is unconstitutional and is one of the property sector’s most pressing issues, Datuk Jeffrey Ng Tiong Lip said today.
Ng, the immediate past president of the Real Estate and Housing Developers’ Association Malaysia (Rehda), said Article 153 of the Federal Constitution, which allows for positive discrimination in favour of Malays and the natives of Sabah and Sarawak, does not include housing at all.
"The positive discrimination (in Article 153) covers only the specific areas of employment in public service, education, training or special facilities given by the federal government, and business permits.
"Housing is implicitly excluded," he said at a "Property Rights under the Malaysian Constitution" panel discussion at the 14th Malaysian Law Conference.
Ng noted that the sub-clauses under Article 153 made it apparent that the positive discrimination enjoyed by bumiputras should not deprive any other persons in the same areas of enjoyment.
"The positive discrimination allowed in our constitution is not done at the expense of others and is not a zero-sum game," he added.
He said it was highly problematic from a constitutional perspective when bumiputra quotas are imposed on all housing developers by the state authorities.
"In my opinion, a state’s imposition of bumiputra quota in our housing industry, if it was made into law, can be challenged on the grounds of Articles 8 and 153 of the Malaysian Constitution," he said.
(Article 8 states that all persons are equal before the law).
Ng added that Article 4 also stipulates that the constitution is the supreme law of the land and any law passed which is inconsistent with it shall, to the extent of the inconsistency, be void.
He said that when the bumiputra housing quota policy was implemented in the 1980s, property developers had to reserved 30% of available units in a housing scheme for a limited period of six months for purchase by bumiputras at a discount of 5%.
"Surely, the understanding then was based on satisfying the government’s social agenda and after enduring the six months reserved period, such unsold bumiputra allocated units can be released back into the open market for resale at prevailing market prices.
"However, today’s guidelines imposed by various state governments and local authorities have changed drastically at the expense of housing developers," Ng said.
He cited how the bumiputra housing quota imposed by all the states now ranges between 30% and 70%, the discount imposed varies between 5% and 15%, and the reserved period of six months is extended without any definite period of release.
He also said some state governments have introduced heavy monetary penalties and compensations before release of unsold units is granted.
For example, Ng said, the Selangor government and Kuala Lumpur City Hall recently introduced a new system of levy where an amount equivalent to the discount given to bumiputra buyers must now be paid to the authorities in exchange for the early release of unsold bumiputra quota units.
"What is unsold after a fixed period must be rightfully returned to us without making further contributions. After all, such units are rightfully owned by us as provided for under Article 13," Ng said.
Article 13 states that no person shall be deprived of property except in accordance with the law, and no law shall provide for the compulsory acquisition or use of property without adequate compensation.
"There is absolutely no justification for imposing such levy or contribution and such guidelines must be reviewed in accordance to our constitution," he said.
Ng said Rehda continues to struggle to convince state governments and local authorities to streamline conditions for release of unsold bumiputra quota units via an automatic release mechanism which is time-based.
He noted that certain state governments have also taken to inserting and endorsing a condition for bumiputra reserved lots on land titles, and marking bumiputra lots on layout and pre-computation plans.
"The restriction endorsement on land title is permanent whereas under the marking method, plans will be unmarked and restriction lifted once release of unsold bumiputra reserve lots are approved.
"Endorsing land titles with such restrictions by state governments is tantamount to creating de facto Malay reserved land and without obtaining consent from the landowner," he explained.
Ng said many well-educated bumiputras avoided buying bumiputra reserved quota lots in urban areas, where land titles have been endorsed, because they are less marketable upon resale in the secondary market and the market value of property is generally lower due to its restriction.
He said the National Land Council and National Council for Local Government have a big role to play in streamlining government policies and existing legislation which have been inconsistently and inappropriately applied in the housing industry.
Sun2Surf: Updated: 09:27PM Mon, 29 Oct 2007
Recently we have another reminder of how deviations to the intent of the New Economic Policy – even to the extent of contravening the provisions of the Malaysian Constitution - continue to be practiced and further expanded (see the Sun article, Housing Quota Questioned, 30 December 2007). This issue - in the form of the imposition of a bumiputra quota in housing – was raised in a paper by the past President of the Real Estate and Housing Developers Association which was delivered to the 14th Malaysian Law Conference. The paper shows the extent of deep entrenchment and pervasiveness of racially biased administrative regulations and other policy instruments in a vital sector of the economy – all in the name of restructuring and reducing inequality.
Such discriminatory practices run against economic logic and social justice. They increase the cost of doing business in housing for the developers and add unfairly to the housing price of non-Malay purchasers. They are also damaging to social cohesion. Few other issues arouse so much dissatisfaction with non-Malays than the knowledge that they have to pay more for a house purchase simply because of their ethnicity. Many Malays are in agreement with the view that this is a bad and unnecessary policy which encourages a hand out and subsidy mentality as well as rent seeking and other abusive practices. Malay friends, in fact, tell me that there are ashamed of this requirement, and that there is no good reason why the requirement of a Bumiputra housing quota and the accompanying discount to purchasers should be imposed, let alone continued.
The principle that purchasers of housing or any other public or private good or service should be treated in exactly the same way in how ethnicity impacts on pricing and access should be scrupulously observed by all parties in the country – especially the government. In no other country in the world is there an attempt to practice official price discrimination on the basis of ethnicity. The government will deserve the stigmatization and odium that is attached to this form of discrimination should it persist with it and other similar policies.