HOUSING AND DEVELOPMENT (AMENDMENT) BILL

Order for Second Reading read.

The Acting Minister for National Development (Mr Lim Hng Kiang): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The primary objective of the Bill is to amend the Housing and Development Act to provide the polling framework for HDB shops involved in the Main Upgrading Programme.

Sir, the Act was last amended in 1992 to enable HDB to implement the upgrading programme for flats. A new legislative polling framework for shops is now required as the subsequent batches of the Main Upgrading Programme will involve sold shops.

Unlike in the case of flats, the Government will not be providing any subsidy for shops involved in the Main Upgrading Programme. Shop lessees have enjoyed discounts when they bought their shops from HDB. They have also benefitted from the substantial increase in the value of their shops in the booming property market. There is therefore no necessity for the Government to subsidise them again in the Main Upgrading Programme. For rental shops, HDB will bear the cost as the landlord.

Shop lessees will be given the opportunity to vote for the upgrading works. In doing so, they will have to weigh the benefits of upgrading works against the cost which they have to pay. Shop lessees who own more than one shop will be given the number of votes according to the number of shops owned. This applies to both precinct works and specific upgrading works like space adding items.

I will now cover the type of upgrading works which affect the shops and the method of voting for each type of upgrading.

In the case of flats, there are three main types of upgrading works in the Main Upgrading Programme, namely, at the precinct-level, secondly, within the block but outside the flat, and thirdly, within the flat.

For the precinct-level works and block-level works, shops will benefit as the improved environment is likely to attract more customers. The shop lessees will therefore share the upgrading cost together with the flat lessees. Both the shop and the flat lessees will vote in the same polling exercise.

No basic upgrading work will be carried out within the shop premises beyond incidental works resulting from flat-level upgrading. If flat lessees in HDB blocks which comprise shops at the lower levels and flats above vote for space adding items, HDB will also offer the shops beneath them the choice of having space adding items. This is to allow the facade of the building to look more pleasant as the space adding item stack could then be extended all the way to the ground level.

However, we need to take into account that shopowners will have to pay much more for the space adding items as compared with flat lessees, as the shopowners will not be given any subsidy. If a common poll for space adding items is conducted for both flats and shops, we might have situations where shop lessees may be unfairly forced to take up their more expensive space adding items because they are outnumbered by the flat lessees. This situation may happen even though the majority of shopowners do not want the space adding items.

To avoid this situation, a separate poll for shops will be conducted for their space adding items. This poll will be conducted only after and only if the flat lessees in the same block have voted for the space adding items. If at least 75% of the shopowners in a block vote in favour in this separate poll, then HDB will proceed to provide space adding items for the shops in the block.

HDB will represent vacant and rental shops in the voting for the space adding items. For the rental shops, HDB will vote according to the results of the census which HDB will conduct among the shop tenants.

Sir, the Bill also seeks to include two other amendments. One amendment is to allow HDB to undertake functions and duties delegated to it by other written laws. This will enable authorities like the Fire Services Bureau to delegate their powers to HDB on compliance of relevant regulations.

The other amendment is to increase the maximum penalty fine and composition sum in respect of offences under the Act. The penalty fine has not been changed since it was first introduced in 1986. The same applies to composition sum, which was introduced in 1989. They now need to be revised to ensure that the penalties are sufficiently punitive.

Sir, I beg to move.

Question proposed.

Mr Chiam See Tong: Sir, what is the expected range of prices shopowners have to pay when their shops are upgraded?

Mr Lim Hng Kiang: Sir, there are two levels of charges which shopowners are expected to pay. The first level would be their contributions to the precinct-level and the block-level upgrading. This is the vote that is taken when we take the entire precinct of both flat owners and shopowners and ask them whether they want the Standard Upgrading Package. In this case, the shopowners are expected to pay around $6,000 if they vote for the Standard Upgrading Package. They will pay their contribution for the precinct-level works and they will also pay for the block-level works up to the level of the shop. All block-level works above the shops for the rest of the flats would be shared among the flat lessees and will not be charged to the shopowners. So for the first level of works for the block and the precinct, we expect the shopkeepers to pay about $6,000 per shop value.

The second level of works is the space adding item. In the space adding item, we will only ask the shopkeepers to vote for the space adding item in those blocks where the flat owners have voted for it. That means in a block where we get more than 75% who have voted yes to a space adding item, then we will ask the shopkeepers in that block whether they also want the space adding item. If the shopkeepers also say yes, then we will charge them the market value of the space adding item less 30% discount. So they pay for the space which they are getting at market value and in line with the sale of shops under the tenanted scheme, we will give them a 30% discount. With that formula, of course, the price they pay would depend on the market value of the shop, which varies from precinct to precinct.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Lim Hng Kiang].

Bill considered in Committee; reported without amendment; read a Third time and passed.