Kuala Lumpur City Hall (DBKL) has been urged to issue a fresh letter on the development approval of 548 units mixed dwellings on a 1.8 acre plot in Kampung Datuk Keramat for “Less than six hundred thousand Ringgit luxury condominiums”, which was originally approved for “Affordable housing”.
Member of Parliament for Titiwangsa Dato’ Johari Abdul Ghani made the call, after the controversy development order by DBKL of 274 units of apartment less than RM200,000, 252 units of apartments less than RM750,000 and 22 unit of apartments less than RM2,000,000 was made public.
Johari who is also the Deputy Minister of Finance but acting for and on behalf of his constituents, claimed the Kuala Lumpur Mayor did not admit to the issuance of the said development order (DO) approval (which is dated 21 August 2015). He also added the DO contravened the original land title issued by the Kuala Lumpur Director Land and Mines (PTG).
In the original letter dated 23 July 2014, the premium is set for RM1.3 million. That is more befitting for the development of 574 units of “Affordable housing”.
He also called on the Minister of Federal Territory Tengku Dato’ Seri Adnan Mansor, to intervene on the matter. In a letter dated 4 November 2015 to Federal Government 100% owned GLC UDA Holdings, DBKL already hived off the said property to a property developer.
What is interesting is that it is believed that the said land was transferred from PTG to DBKL on 5 November 2014, to fulfil part of the Federal Government promise for 500,000 ‘Affordable housing’ within urban areas.
The land was previously occupied by squatters then known as ‘Kampung Kinabalu’, who were relocated. It borders Gurney Heights, Lanai Gurney and Masjid Khalid Al Walid in Jalan Sultan Yahya Petra (Semarak originally Gurney).
‘Affordable housing’ in the urban areas is a task assigned to Perumahan 1Malaysia Bhd. (PR1MA), where else Syarikat Perumahan Negara Bhd. (SPNB) is a task to provide affordable housing in the rural areas.
UDA Holdings is to develop commercial projects.
It is interesting that DBKL is committed for “Affordable housing”. The previous Mayor, confirmed this less than five months ago which probably could include the said land.
KL approves 27,000 affordable homes since March
Published: 14 June 2015 10:03 PM
Kuala Lumpur mayor Tan Sri Ahmad Phesal Talib says developers are given incentives to build affordable homes. – The Malaysian Insider file pic, June 14, 2015.
The Kuala Lumpur City Hall (DBKL) has approved the construction of 27,000 housing units under the affordable housing project, “Rumah Mampu Milik Wilayah Persekutuan” (Rumawip) since March this year.
Kuala Lumpur mayor Tan Sri Ahmad Phesal Talib said the construction of affordable housing units involved an initiative from the private sector through land provided by the federal government.
Besides that, he said, the government also offered a further incentive to developers who agreed to build affordable housing by increasing the population density.
“As it is now, we have begun offering any developer up to 1,000 people per acre… Previously, it was 240 people per acre.
“This means, if they (developers) want to make affordable homes, we (DBKL) will allow the population density on the land to be increased to 1,000 people per acre,” he said after opening the MyCommunity carnival in Desa Rejang, Setiawangsa, in Kuala Lumpur, today.
Phesal pointed out that a lack of affordable housing projects in the capital was because of the high cost of land ownership, in addition to land scarcity.
“Therefore, we are encouraging developers to build medium and low-cost houses, while providing comprehensive facilities in each residence,” he said.
Phesal also said that DBKL would spend some RM50 million to build public housing estates equipped with parking facilities at Taman Muhibah.
The carnival, co-organised by DBKL, is an initiative to implement community development programmes among various agencies, in line with the national transformation programme. – Bernama, June 14, 2015.
What is more interesting, it is believed that the property development company which DBKL “Hived off” the said land was formed and registered by Company Commission (SSM) on 21 November 2014. It was a convenient of two weeks after PTG transferred the said land to DBKL.
It is not clear when it was sold off to this company (Meaning when was the sales and purchase agreement signed). However, it was reported that DBKL sold it off for RM16.2 million.
The Malay Mail online story:
KL mayor warns ‘outsiders’ against instigation in Datuk Keramat affordable housing project
BY AZDEE AMIR
Wednesday November 18, 2015
07:01 AM GMT+8
KUALA LUMPUR, Nov 18 — Providing affordable housing remains City Hall’s top priority, as evident in the proposed development in Datuk Keramat.
Mayor Datuk Mhd Amin Nordin Abd Aziz said outsiders should not instigate local residents against the project, which was part of City Hall’s plan to build 50,000 of such homes in the city.
Amin said City Hall had initially planned for 30,000 affordable houses in the city, but the number was increased to accommodate demand. They will be built in nine areas including Kepong, Pandan Mas, Batu Muda, Bandar Tun Razak and Datuk Keramat.
“We applied for land from the Federal Territory Lands and Mines office to build affordable houses, and one of the sites we applied for was the 1.8 acre site at Jalan Padang Tembak,” he said.
“We paid a premium of RM1.3 million in 2011. The figure was set by the Lands and Mines office. We sold it to the developer last year for RM16.2 million, based on an evaluation by the Valuation and Property Services Department.”
He said Perbadanan PR1MA Malaysia, UDA Development Holdings and several government-linked companies had applied to develop houses on the land.
“We received offers to develop the land in Datuk Keramat in the middle of last year. It was sold to the developer at market price later the same year.
UDA Holdings only sent their application to us in October, so it was only right for us to evaluate the offers that came in before that,” he said.
Amin said 50 per cent of the houses would be sold for below RM200,000 solely to bumiputras. The other 50 per cent would cost RM600,000 and below, with 70 per cent allocated for bumiputras, 20 per cent for Chinese and 10 per cent for Indians.
Residents in the area had protested against the development at the site last month and had recently held a dialogue session with Titiwangsa MP Datuk Johari Abdul Ghani.
Some of the residents said they had seen documents that showed some of the houses would be sold for no more than RM2 million.
“That was during the development order process between City Hall and the developer. But City Hall will not allow such prices. We control the pricing of the houses.”
“There will be no homes costing RM1 million or more in any of the nine housing projects we are developing or involved with,” Amin assured.
Datuk Keramat residents claimed they were not informed or consulted by City Hall over the Datuk Keramat project.
Amin said City Hall had followed the required processes and had engaged with those living in the surrounding areas over the development.
“We did ask the residents of the immediate area surrounding the land but those objecting are living beyond the earmarked area.
“By right, only those living close by can protest against the development,” he said.
It is baffling on the statement of “We control the pricing of the houses”, yet the original 21 August 2015 DO provided room for double of the “No homes costing RM1 million or more”. Considering the same DO, the gross development value (GDV) for the property development company RM288 million. The value that DBKL hived the said land off is 5.6% of GDV.
That is way below market level, for properties in the neighbourhood of three-quarter-million Ringgit.
Taking the average net realisable for a property development company between 20-22%, the said company is expected to make in the neighbourhood of RM41-47million after the acquisition cost paid to DBKL.
That is effectively 300% of what DBKL made from the said property. Had DBK joint ventured the said property with a GLC at 1:2 profit hearing ratio, DBKL would have made an extra RM10million with the 21 August 2015 DO.
A reliable source mentioned that the said property development company so far only paid 10% of the premium, set by PTG.
Johari demanded that if the development is to follow through, then DBKL should impose the original “Affordable housing” obtained from PTG and units are capped to RM200,000 for all 548 units of apartments.
The GDV would have been RM110 million, which would have served the expected original intent when the land was obtained from Kuala Lumpur PTG. At the GDC of RM160,000 per unit, there is still room for RM21 million net profit.
The controversies arisen from this project is expected to be enormous and far reaching. It would start with is DBKL exploiting its local authority status to obtain land from Federal Government, only to hive it off for a little gain and provide opportunity for commercial entities.
Needless to mention, a ‘purposely formed’ commercial entity.
These are answers which the four month-old Kuala Lumpur new Mayor and DBKL Director General (who was Kuala Lumpur PTG) have got to address quickly and the comment from the Minister of Federal Territory is sought.
His silence so far on the matter, is suspiciously telling.