Private corporations wear a proud credo on their sleeves. “Our first allegiance is to our shareholders.” In spite of this honest and forthright declaration of intent that covers virtually any and every corporate enterprise not expressly forbidden by law, governments (who are responsible to “the people”) these days frequently insist that developers — invariably corporations all — can put “the people’s” interest first. That’s strange on the very face of it, but does not seem to daunt conservative-oriented governments.
This public faith in private enterprise is being put to the test in the humanitarian crisis that infects the globe: the lack of affordable housing and consequent homelessness. It occurs even in the wealthiest of countries that seem to have the resources to tackle the problem directly.
Instead, they are putting faith in public/private partnerships in which private enterprise is expected to act in good faith (and is supposedly contract-bound) to help address the housing crisis by providing some flavour of affordability in their overall development projects.
As the United Kingdom is currently discovering, developers have been taking over-frequent advantage of profitability loopholes in their public/private agreements. A successful viability hearing allow them renege on their market value/’affordable’ ratios, inevitably to their shareholders advantage, and to the public purse’s disadvantage.
The fact that no developer-friendly loophole already exists does prevent developers from using ingenuity to place their commitment to their shareholders before any humanitarian, or even legal contract, concerns.
Selangor State is the largest contributor to the Malaysia economy. It has low employment and a high standard of living, with a consequent modern infection: a need for affordable housing. New conditions concerning public/private housing contracts have recently been introduced by Selangor. Critics have called them ‘odd conditions.’
Read more about developer antics that make the conditions not-so-odd after all in FreeMalaysiaToday: Selangor exco: Some developers delaying affordable homes