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Proposed act to hit developers
Danford said that the NHBRC's measures, if adopted, would be no more than an "extra tax" and a further load of red tape, and their combined effect, he said, could hamstring the residential sector in perpetuity.
Taking the recent measures together "in one basket" they would, said Danford :
• lead to a shift away from housing development towards less restrictive forms of property development
• increase the risks incurred not only by developers but also by the major banks and others funding housing projects
• complicate and further slow down the work of provincial and local authorities' planning departments which, although instructed to speed up, remain bogged down in backlogs and are still finding it difficult to cope under the existing protocols
• restrict developers from being involved with sectional title developments
• hamper developers' efforts to sell property overseas
• lead to further delays in the registration of transfers and, worst of all,
• cause the current high inflation rate on built projects to rise still further.
Danford was particularly critical of the NHBRC's proposal that they would demand inspections prior to handover.
"I believe that they will be unable to cope as they do not have sufficient qualified staff for this task and already have a reputation for inefficiency and disorganization," he said. "If this rule became law it would add greatly to the delays already being experienced in the development industry."
Some of the promulgated causes, e.g. the proposed ruling that a developer may not influence his client's choice of conveyancer, are, says Danford, in direct conflict with current common law practice which gives the seller the right to appoint the conveyancers.
The new "inclusive" development policies, Danford said, are exactly the type of social engineering that has been attempted historically and has failed because these policies proved totally counterproductive.
"Allowing for the inclusionary element stipulated by the state could add in excess of 25% to the costs of projects and will make it very difficult for developers to achieve acceptable returns. It will also add to the cost of the conventional units thereby fueling the inflationary fires."
"The new rulings make no sense because, as has been seen already in the more affluent areas, the social housing occupants themselves in many cases quickly sell their properties for a quick cash return."
The residential property industry and the banks, said Danford, should join SAPOA as a matter of urgency to challenge both the NHBRC and the government in their latest proposals. (SAPOA has called for a meeting on this subject.)
Danford added that he does support the motivation behind these measures but he feels that more effective incentives could be introduced to serve their "worthy" cause of getting established business to help provide social housing.
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Posted on Friday, December 21, 2007 (Archive on Tuesday, January 01, 2008)
Posted by hayleym Contributed by hayleym
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