SINGAPORE - The Urban Redevelopment Authority (URA) has been directed to review its policy of allowing developers to sell off free spaces within executive condominiums (ECs) for a profit.
In a blog post yesterday, National Development Minister Khaw Boon Wan said that under current URA rules, it is "not improper" for developers of "supersized EC units" to use free spaces to develop communal or private amenities.
Mr Khaw said: "But as more developers do so, with larger private roof terraces and private enclosed spaces, communal space in developments that benefits all residents will shrink correspondingly."
"There is a further downstream problem as some buyers may be disappointed, later on, when they find out that these outdoor spaces they have paid for are not allowed to be covered up or enclosed."
In view of this, Mr Khaw said he has directed URA to review this policy and "have it fixed".
ECs are a public-private housing hybrid which come with government subsidies, and are intended to help "sandwiched" households with a monthly income of not more than $12,000.
In the post, Mr Khaw also revealed how it first came to his attention that developers were exploiting this loophole.
He said he was initially baffled by how one EC developer could price its "supersized" penthouse units at $470 per sq ft, while selling smaller, more normal-sized ones at a much higher $770 per sq ft.
Mr Khaw said: "Outdoor roof terraces are actually free space. Space that developers do not have to pay development charges (for)."
Developers of supersized ECs, which typically have units in excess of 2,000 sq ft, are able to use this free space to develop private or communal roof terraces.
This is because such spaces are not counted as part of the development's total gross floor area, and cost developers relatively little to build.