THE multi-billion dollar development of Forest City had disrupted the local housing market and appeared to be exempt from compliance with Johor’s housing policies, said academics.

“There is no data to show that the Forest City development has directly contributed to the provision of affordable and low-cost homes in Johor Baru,” said National University of Singapore researcher Ng Keng Khoon.

“There is also no provision of the Bumiputra quota in this project as it falls under the category of ‘newly established international zone’.”

This, he added, was not in line with the Johor Housing Policy for Johoreans in Iskandar Malaysia (DPRJ) introduced in 2014.

Ng and co-researcher Dr Guanie Lim, of Nanyang Technological University, yesterday presented their paper “Beneath the veneer – The political economy of housing in Iskandar Malaysia Johor” at the ISEAS-Ishak Yusof Institute’s Johor Economic Update seminar in Singapore.

“Similar to the previous policy (1997-2013), housing developers are required to designate 40% of total units as affordable housing in projects exceeding five acres (2ha),” said Ng.

This was an unavoidable obligation although the developers have some leeway in the building of Rumah Mampu Milik Johor (RMMJ), or low-cost homes 

“If the developer does not adhere to the policy, it will have to pay the state government RM40,000 for each affordable unit it does not build as compensation.”

According to the paper, Johor had the highest Bumiputra quota and discounts for housing Malaysia.

For landed properties priced above RM250,000, developers need to set aside 20% of the units, along with a discount of 15% on the sale price, for Bumiputra buyer. For high-rise apartments, 40% of the total housing units and the same discount are to be reserved for Bumiputra.

But Forest City appeared to be exempt from this.

Johor housing ‘seriously unaffordable’

Selling at the average price of RM1,200 per sq ft, Forest City has also added to Johor’s large supply of luxury homes, said the paper.

The project has put housing, which is already classified as seriously unaffordable, further out of the reach of the majority of Johoreans, it said.

“With about 40% of house launches priced from RM250,001 to RM500,000 in Johor Bahu, private housing in southern Johor has exceeded the state’s housing affordability cut-off point (ie median housing price) of RM260,000.

“This issue will likely worsen, as Johor is relatively less urbanised than Penang, Selangor and Kuala Lumpur,” it said.

According to data compiled at the National Property Information Centre, homes in the RM250,000-RM500,000 range were most launched in Johor Baru, making up about 40% of total launches.

The price range is the yardstick for affordability for the majority of Johoreans.

The paper said data showed that the number of launches of homes priced between RM100,000 and RM150,00 had greatly declined while number of launches of luxury homes in the RM500,00 to above RM1 million range had increased significantly since 2010.

“While these launches moderated in 2013, the long-term upward trend is undeniable.”

The paper said Forest City’s had also added the burden of costs to the  federal and state governments.

“One of the project’s major selling points is its connectivity to neighbouring Singapore. This means that a new customs, immigration, and quarantine Complex (CIQ) dedicated to Forest City will have to be established.

“But who will pay for the upkeep of this third CIQ that only serves private interests?” said Lim.

It looked like Forest City would be an enclave for the rich and foreigners, he said.

Forest City is a mammoth project consisting of four artificial islands to house 700,000 people. It will have office towers, parks, hotels, shopping malls and an international school. It is developed by Guandong, China-based developer, Country Garden Group, whose first development in Johor was the Country Garden Danga Bay residential project, which has 9,500 units. – February 24, 2018.