Golden Shoe Redevelopment- Land value, land ownership and urban development
Without government’s intervention, land prices are primarily determined by supply-demand relationship. After WWII, to protect tenants from unreasonable rent increase arising from housing shortage, the colonial government enacted Rent Control legislation in 1947, which prohibited rent on any premises covered by the act to increase beyond its 1939 level, repossession of such premises is also restricted. As land prices stopped reflecting its market value, landlords lost incentives to redevelop or even maintain their premises. In addition to exacerbating building conditions in Singapore’s central area before urban renewal development, it discouraged landlords from responding to the emerging demands of commercial developments in later years.
With a view to stimulate private sector, PAP Government passed Control Premises (Special Provision) Act in 1969, allowing landlords to apply for exemption from the rent control ordinance, terminate tenancy and repossess the premises. On top of that, Tenants Compensation Board was formed to award what it considered fair compensation to house owners who did not own the land and to tenants and subtenants under criteria including loss of income incurred, the loss of goodwill, the cost of relocation, the annual rent paid, the location and sitting of the controlled premises. As its result, land prices rose sharply to reflect market value, premises were repossessed and redeveloped appropriately according to its value.
Alongside this, to enable larger parcels of economic developments held back by fragmented land ownership of shop houses, Land Acquisition Act was implemented in 1966, allowing Singapore government to perform compulsory land acquisition for public development.
As consequences of government’s gestures regarding land prices and land ownership as mentioned above, a healthy environment was nurtured in preparation for the urban renewal development.
Bibliography Chua, Beng Huat., and Gretchen. Liu. The Golden Shoe : Building Singapore's Financial District. Singapore: Urban Redevelopment Authority, 1989.