Wednesday, February 18, 2009

Incompatible Polices

Artwork by Ward Jenkins , Portland, Oregon, United States

As I read about 2 recent newspaper articles about Singapore having her own World Heritage Site and about how Singapore progressed rapidly from slums to a world class city, I cannot help but feel that the demographics of the Tiong Bahru Estate will be changed within the next 5 years due to some incompatible policies.

Demographics – Then and Now
Before MAS relaxed the rules in July 2005 to allow banks to increase their loan quantum to 90% as well as allow CPF members to use their funds for financing properties with short leases, Tiong Bahru was a rather forgotten place.

The only thing worth coming for a visit is probably Seng Poh Market (now known as Tiong Bahru Market).

It was tough to offload or acquire properties here. You either have to sell it very cheaply or you have a find a very CASH RICH buyer.

So what was the scenario at that time?

While waiting for that elusive buyer to appear, most landlords either left their properties to rot or they rent it out to just about anyone and in whatever numbers. As long as they get to collect their rent promptly every month, no one really cares about how many people are living within the premise.

So within a span of about 30 years, Tiong Bahru Estate degenerated from a middle class population to a place where you could only find elderly people, migrant workers and bar hostesses etc.

This is the reason why some people still associate Tiong Bahru Estate as a place for the old and forgotten as well as a cheap and convenient place for transient worker to take refuge.

It just wasn’t a place to be loved and treasured at all.

(That may be the reason why some Singaporeans put their noses high up in the air when Tiong Bahru was proposed as a possible candidate for a UNESCO World Heritage Site status.)

I think it was a miracle that Tiong Bahru managed to reinvent itself and slowly transformed its image from an elderly and grimy estate to a hip and happening estate during the last few years.

Was it the conservation status that was awarded by URA in December 2003 that spurred that transformation? I have my doubts.

In this En-Bloc crazed and Get Rich Quickly society that we live in, having a conservation status actually gets in the way!

But I will be the first to admit that it was the En-Bloc phenomenon that helped accelerate the gentrification of this neighbourhood over the last 3 years.

Almost every old building in the city-centre was being en-bloced and sleepy places like River Valley became a huge construction site. Many residents and tenants who loved the convenience of River Valley started looking for an alternative location.

Some of them unwittingly stumbled into Tiong Bahru and decided to settle down here.

Very quickly, this sleepy and grimy place soon became a great place to live in and the neighbourhood began to change as more and more brave “EXPATS” moved in.

Even the shops around this estate became trendier as a result.

Suddenly no one was shy to tell people that they live in Tiong Bahru!

As the newer residents began to outdo each other in their renovations, Magazines took notice and began to allocate more space to this “COOL” estate.

Very soon, demand surged as it was fashionable to own a hip and happening Pre-War Art Deco Conserved Apartment.

The neighbourhood is still evolving as people are still discovering it. However, I fear that the gentrification has plateaued and we are retarding back to those pre en-bloc days again!

Half Hearted Loans & Policies
Most of the people who want to live in these apartments nowadays are mainly the 30 something age group.

This group of people tend to have high disposable income and have very strong opinions. They are also willing to try out something that is different unlike the usual condominiums that most people strive to own.

But that willingness is often stopped dead in the tracks when it comes to financing.

Despite their high disposable income, banks do not give out long tenure loans.

At the moment, it is between 10 – 15 years and they may only grant the buyers a 60% - 70% loan.

To make this cash intensive acquisition even more painful, CPF has a rule that limits how much these buyers can withdraw the money from their CPF to service the loans. Buyers usually have to use cash to service the loans within 5 to 10 years into their loan tenure.

Nevermind the fact that these buyers still has a lot of spare CPF money lying in their account, they simply just cannot touch it.

The reason why CPF has this rule is to allow older CPF members to have a wider choice of housing during their twilight years. While the rule is to protect the supposedly helpless and defenceless elderly, it penalises the residents of Tiong Bahru!

These flats within the Tiong Bahru Estate are not exactly ELDERLY friendly as they are not fitted with modern facilities like lifts. I have my doubts that I will be enthusiastic about living on level 4 when I’m 69 years old.

The best bet for this place is to get the younger people to buy it right?
But the CPF rule is doing the exact opposite right now. It has made this place favourable for the elderly to buy instead.

So let’s just assume that despite all these challenges, the young buyer still insist on buying a unit now, I can bet with you, they will be leasing the place out when CPF ask them to pay their housing loans with cash instead of paying with CPF money. So the rules effectively evacuate all the residents, leaving behind only tenants.

Most tenants here are nice people but when you cram too many people into a small apartment, the sense of responsibility toward the apartment and the neighbourhood disappears.

(Articles on the impact of Overcrowding : Article 1; Article 2; Article 3; Article 4; Article 5; Article 6)

Increasingly I am getting more and more request from enterprising people who want to rent apartment with the ultimate intention of subletting them out.

I’m extremely upset when these people blatantly tell me they are going to sublet out the apartment to 12 – 20 people.

When I point out to them that it wasn’t the right thing to do, they will say it has always been like this here at Tiong Bahru!

And these people sure know how to press the price down. They bad mouth the entire estate and give you a low ball offer at $1.8k per month!

I’m certainly not worried about those renovated units as those units will usually be rented out to responsible tenants.

It is those units that haven’t been renovated since the owner’s grandfather lived in it that I worry most.

These landlords will grab the $1.8k and probably do not give two hoots about how the place will be thrashed by these people.

Frankly, I’ve got no problem with these migrant workers so long they share the same love and care we have for this estate.

But since most of they are transient workers, they may not care enough to ensure that this is a great place to live in for everyone.

Just walk around in the morning before the cleaners come by, you can find a lot of disgusting stuff.

I never once understood how people could toss used condoms and soiled sanitary pads onto the five foot ways! It is such a disgrace and not a neighbourly thing to do!

I’m ranting about this today because I know that the whole of Tiong Bahru has the potential to become another Golden Mile Complex if no one cares. (I actually wanted to reference Geylang but people here will protest about that association)

Golden Mile Complex was once described as a vertical slum, terrible eyesore & a national disgrace by NMP Ivan Png.

The essence of his comments was about the resident’s blatant disregard for fellow residents and national welfare.

I fear the comments may be applicable here in time to come.

So why was Tiong Bahru Estate conserved with such a short lease left in 2003?

How would the residents be able to off load their property to unlock the value of their home when they grow old?

Why would people want to invest or renovate their homes if they do not see any future here?

The relevant authorities should urgently come up with alternative financing or CPF rules for conserved buildings so that these flats or estate could continue to be made relevant for the present and future generation.

Otherwise, these present rules may unwittingly turn these beautiful apartments into slums!

I certainly hoped that this place was not conserved to showcase slum living.


Taoism said...

Bravo! Great Post! I thought I am pretty updated on the happenings of Tiong Bahru but I still learn more from your blog.

As one of those expats that you have mentioned, I feel the same way about Tiong Bahru. When I first came to Singapore, I first lived off of Orchard. In 2 years, I never felt like I was in Asia. I just lived in a big city. It was only when I moved to Tiong Bahru when I felt like that I live in Asia. In Singapore, you are either very rich and can live in a unattached house, a private condo or a HDB, none of them gives you a taste of asia. Tiong Bahru is the only place that I know of in Singapore.

As for the mix, I do see more expats everyday. I don't mind seeing some nice restaurants moving in but I would want all the old folks to be driven out either. I love chatting with the "uncles" drinking beer at the Curry Chicken Chop. I can do without the trash but other than that, I think it is a nice mix now.

Anonymous said...

Great post Alvin!

I'll urge you to send this to the ST forum, if you haven't already. With that, we'll have a bigger platform to engage the authorities to look at the extension of lease.

SGalf said...

Hi Taoism,


It is great to hear an expat's point of view about this place.

And I'm glad you found this place to be of a right mix.

I won't want the old people to move out either.

If you have time to talk to them, you will uncover a lot of stories which are interesting to listen to.

By the way, I really enjoy reading your blog nowadays. It is funny and entertaining.

Hi Anonymous,

I'm apprehensive about sending this to ST Forum. People who doesn't live here wouldn't care about what is happening here.

I fear it may even backfire on us.

Perhaps it would be better to engage the relevant authorities and get things moving rather than getting the whole singapore involved.

My objective was to make people who cares about this place think about the possible threats to this place.

It is not as bad as I described it but it MAY become bad if nothing is done.

I'm just doing my bit to ensure everyone plays their part to make this place a great place to live, work and play.

Kevin said...

I share the exact thoughts that Alvin had prior to my purchase of an unit in TB. It was really a struggle of heart vs brain for some time because it really arent a prudent financial decision, by normal sense. I am among the insistent not-so-old buyer that Alvin mentioned.

Despite all the things that we like about the place, ironically, what really struck us was that we knew in 5 years time, buying a TB unit will be completely out of reach because of the CPF withdrawal limitations. So we bought.

I hasnt got enough belief in HDB/URA that TB will be spared the blanket rules in 5 years time.

But whatever it is, we are proud to be part of this estate with rich heritage. And hope to share this heritage with my children in time to come.

Just hope that if the valuation do crumples in the future, the estate spirit will not go down with it.

Incompatible policies? They sure are!

SGalf said...

Hi Kevin,

Just to clarify, HDB flats are not affected by the 60 years or less lease.

Only properties defined as PRIVATES are affected.

Hope this is a relief for you.

The problems I had described in this post is for the Pre-War section.

The HDB section is still mainly owner occupied and it has noticeably much cleaner and neater than her older counterpart.

I supposed if the Pre-War side has more owner occupied units, the effect would have been the same.

Ultimately, the attractiveness quotiant of a place to live in may be boiled down to the sense of ownership of that area.

I remember reading that it was this sense of ownership that MM Lee wanted for Singapore that he promoted that people will look after the places that they live in and not thrashed it.

My fear is that when there is an overcrowding problem, people will not be sane or bothered enough to care for the place. And being transcient doesn't help also.

Just look at those chalets, they are usually quite run down after a short while.

So my hope is that people here will treat this place (and their neighbours) with a higher level of respect and concern and not just recklessly rent it out just to make a few dollars at the expense of the residents here.

Forest said...

All the comments are from like minded people and we all feel very strongly about it. It is the "others" that are the problem.
Is there no government body that covers "tenancy" surely if landlord places 20 people in a tiny apartment it becomes a business category rather than a residential property. In which case they should be heavily taxed. Any apartment that house immigrant workers or hostesses should be ear marked and reported to the immigration authority as not all will have the right permits and I am sure there will be illegal workers too.
This is the only way to look at it with zero tolerance. Web cams are cheap enough these days so maybe those with apts that have views of rubbish collection areas can catch the culprits and get them where it hurts in their pockets.