AC5007 Batch 1 - David Liauw Shing-Kai

POLICIES ON INCENTIVIZING ARCHITECTURAL CONSERVATION THE DIFFERENT APPROACHES OF SINGAPORE AND HONG KONG

David Liauw National University of Singapore AC 5007 | Dr Nikhil Joshi & Dr Johannes Widodo | Semester 1 (2021)

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CONTENTS ABSTRACT

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INTRODUCTION

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1. ECONOMICS OF HERITAGE CONSERVATION, THE STATE’S ROLE

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2. STATUS OF HERITAGE CONSERVATION

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2.1 2.2 2.3

SINGAPORE HONG KONG PUBLIC PARTICIPATION ON HERITAGE CONSERVATION

3. STATE INTERVENTION AND INCENTIVES FOR CONSERVATION 3.1

3.2

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3.4 3.5

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TAX INCENTIVES • Tax Exemption Scheme for Donations to National Monuments – TES • Development Charges - DC • Land Betterment Charge - LBC GRANTS AND LOANS • Direct Grants • Private Grants | Corporate Sponsorship and Contributions • Bank Loan ZONING INCENTIVES • Transfer of Development Rights - TDR • Strategic Development Incentive Scheme – SDI • Other Zoning Variances • Privately-Initiated Conservation | Bonus GFA Incentive Scheme EXEMPTIONS FROM BUILDING CODE REQUIREMENTS HERITAGE LOTTERY FUND • The Jockey Club Charities Trust, Hong Kong • The National Lottery Fund (United Kingdom) – NLHF PUBLIC-PRUVATE PARTNERSHIP – PPP

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4. CONCLUSION

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BIBLIOGRAPHY

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LIST OF ILLUSTRATIONS

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APPENDICES • • •

79 Case Study #1 | GMC Differential Premium Tabulation Case Study #2 | SDI Scheme – The Singapore Power Building Case Study #3 | PPP – The Central Police Station, Hong Kong

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ABSTRACT

For many years, the issue related to how conservation works is/should be appropriately financed has been debated; some have argued that it is in the public interests that historical buildings as physical links to the past be conserved for posterity. Hence, responsibilities must lie in the public domain while others have maintained that many of these are under private ownership with limited access to the public and depending on taxpayers as a source of funds to finance such projects is inefficient.

Heritage conservation efforts of the built environment are, however, increasingly confronting an array of challenges today with thinning resources and a growing public consciousness of its importance and how it would want to be represented. Hence, economic considerations are today often taking precedence over cultural, social, political and aesthetic values when it comes to decisions about what heritage is to be conserved, who is paying for it, etc. This dissertation looks specifically at conservation incentivizing policies in Singapore and in Hong Kong; the latter very similar to the city-state including a long colonial legacy, a legal system that values the sacredness of the simple notion of ownership of private properties and finally, the tremendous urban renewal and redevelopment pressure on scarce land with limited resources both cities continue to face but despite these, each has taken very different modes in spending and incentivizing efforts to advance the cause of heritage conservation.

Acknowledging that the politics and circumstances vary greatly between them, the dissertation argues for consideration a broad(er) range of financial tools and incentivizing policies to ensure the long-term successes of all conservation efforts.

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INTRODUCTION

The problems encountered in efforts to conserve heritage buildings today are multifaceted, interwoven with issues like development pressure due to shortage of land, lack of adequate resources and expertise, lack of an integrated policy and incentives to do so, inadequate compensation etc. The process of in-situ architectural conservation is inevitably an expensive process; the estimated cost of restoration of a historic building – including, if necessary, structural strengthening, mechanical and electrical upgrading, compliance with new code requirements and the ensuing maintenance cost could be substantial.

For many years, the issue related to how conservation works is/should be appropriately financed has been debated; some have argued that it is in the public interests that historical buildings as physical links to the past be conserved for posterity and as John Ruskin would say “Without Architecture, we cannot remember.” They are part of everyone’s cultural heritage.

Hence, responsibilities must lie in the public domain while others have maintained that many of these are under private ownership with limited access to the public except to the owners or their invited guests and depending on taxpayers as a source of funds to finance such projects is inefficient, expensive and even “no incentive to do better.”

Furthermore, empirical study such as that by urban planner, Tan Shin Bin, a senior tutor at the Lee Kuan Yew School of Public Policy and Assistant Professor at the Singapore Management University, has also clearly shown that when a historic building is gazetted for conservation, the property as well as those private properties nearby too receive a sizeable

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appreciation in their property values as well.1 The debate then is why should public funds be allocated for conservation of private properties when only the owners will benefit most financially.

The importance in the study of economics as it relates to decision making on heritage conservation matters has for a long time been quite unclear. While a good quantity of literature has been published covering such issues as the economic impact of tourism, the incubation of small businesses, property values, etc. these issues, nevertheless, remain quite secondary (or unimportant) as “heritage conservation purists …. dismiss the measurement and advocacy for historic preservation on economic grounds as degrading and insulting to the metaphysical, immeasurable qualities and importance of humankind’s-built patrimony.” 2 But heritage conservation efforts of the built environment are increasingly confronting an array of challenges today with thinning resources and a growing public consciousness of its importance and how it would want to be represented. It comes as no surprise that often economic considerations are today taking precedence over cultural, social, political and aesthetic values when it comes to decisions about what heritage is to be conserved, who is paying for it, etc.3 This dissertation focuses on a very small (but often less well-addressed) segment in the discourse of an otherwise extremely broad topic on heritage conservation economics, i.e., the

Ng Jun Sen, “Conserving historic Singapore buildings raises value of nearby homes, but could also cause gentrification: Study,” Today Singapore, 25 December 2019.

Also available at https://www.todayonline.com/singapore/conserving-historic-singapore-buildings-raises-value-nearby-homescould-also-cause Jun Sen’s study was based on more than one million residential resale transactions from 1997 to 2017 within 800 meter and 1.6 kilometre radius from the conserved site.

2 Donavan D. Rypkema, “Heritage Conservation and the Local Economy.” Global Urban Development Magazine: Volume 4, Issue 1, August 2008. Also available at https://www.globalurban.org/GUDMag08Vol4Iss1/Rypkema.htm 3 Randy Mason, “Economics and Heritage Conservation: A Meeting Organized by the Getty Conservation Institute, December 1998.” Los Angeles: The Getty Conservation Institute, 1991. Also available at https://www.getty.edu/conservation/publications_resources/pdf_publications/pdf/econrpt.pdf 1

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State’s policies in incentivizing conservation efforts especially for privately owned properties as well as the financial tools that are in place; what each of them does, characteristics of the most effective ones and finally how these policies are applied with successes elsewhere. The dissertation looks specifically at conservation incentivizing policies available in Singapore and as a comparative analysis, it will also examine the same in Hong Kong; a city similar to the city-state in many ways including a long colonial legacy, a legal system that values the sacredness of the simple notion of ownership of private properties and finally, the tremendous urban renewal and redevelopment pressure on scarce land with limited resources both cities continue to face. Despite these similarities, neither offers any tax incentives that are widely used elsewhere. Instead each has taken very different modes in spending and incentivizing efforts to advance the cause of heritage conservation with policies in Singapore being very much dictated by the Urban Redevelopment Authority(URA) as the sole authority on conversation matters 4 but with little public participation/consultation until recently as compared to Hong Kong’s where distinctively more liberal policies have been put in place by the Special Administrative Region of the People’s Republic of China to entice the public to share its burden of heritage preservation.

With increasing awareness and concerns of cultural loss, the dissertation also probes the role of various approaches interest groups have lobbied for and/or demanded for appropriate budget to be allocated for conservation efforts and if not, acceptable form of economic and planning incentives. The various programs described in this dissertation represent the current heritage incentive programs implemented in the two cities; unfortunately,

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With the exemption of the National Heritage Board which overlooks conservation of declared national monuments only.

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they do not represent a significant cross sample of the various benefits, grants and loan subsidies and direct and non-direct tax incentives that more matured conservation programs elsewhere are offering. Acknowledging that the politics and circumstances vary greatly between them, the dissertation argues for a broad(er) range of financial tools and incentivizing policies to ensure the long-term successes of all conservation efforts be considered. In many regards, one cannot but feel that existing incentivizing programs and policies in Singapore in particular appear to be falling behind; there are much works to be done by government officials and heritage advocates alike especially with indigenously modified programs and policies with clearer focus on privately owned heritage properties.

This dissertation has 4 chapters with Chapter 1 introducing the theoretical framework on the economics of incentivizing heritage conservation efforts; Chapter 2 introduces the status of conservation efforts in both Singapore and Hong Kong while Chapter 3 looks at the current planning and financial approaches each state has done so. Chapter 4 highlights some of the weaknesses with existing attempts and offers recommendations moving forward.

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1.

ECONOMICS OF HERITAGE CONSERVATION, THE STATE’S ROLE

In December 1998, the Getty Conservation Institute initiated a discussion on the value of heritage economics. Interests on the topic were, however, not new. As early as in 1994, in a paper presented to the British Academy, Alan Peacock, a noted British academic and public finance economist, has suggested that the study of formal economics should be applied to heritage decision making processes 5 but also arguing that if governments were to provide funding for heritage conservation, the public should be allowed to have voices over how “their” money was spent. The argument has, however, met with some resistances among heritage professionals who worried that the intrusion of economists would ultimately monetize all heritage values into financial terms and thereby, allowing “ill-informed popular opinion to influence the allocation of conservation resources.” 6 Some have even maintained that incentive programs undermine productivity and performance7 while others such as Spiteri and Nepal (2008)8, Hahn and Stavins (1992)9, Kohtz (2012)10 and Kleiman et al. (2000)11 have all criticized incentive policies for their inability to provide equal and equitable distributions of benefits to local residents within a particular conservation area.

Peacock, Alan. 1995. “A Future for the Past: The Political Economy of Heritage.” Proceedings of the British Academy 87:189–243.

6 Cannon-Brookes, Peter. 1996. “Cultural-Economic Analysis of Art Museums: A British Curator’s Viewpoint.”

In Economics of the Arts: Selected Essays, edited by Victor Ginsburgh and Pierre-Michel Manger, 255–77.

Amsterdam: North-Holland.

7 Denning, S. (2001) Incentives for knowledge management. Retrieved from http://www.stevedening.com/incentives_knowledge_management.html 8 Spiteri, A., Nepal, S. K. (2008). Distributing conservation incentives in the buffer zone of Chitwan National Park, Nepal. Environmental Conservation, 35(1), 76–86.

9 Hahn, R. W., Stavins, R. N. (1992). Economic incentives for environmental protection: Integrating theory and practice. American Economic Review, 82(2), 464.

10 Kohtz, D. J. (2012). Improving tax incentives for historic preservation. Texas Law Review, 90(4), 1041–1064.

11 Kleiman, D. G., Reading, R. P., Miller, B. J., Clark, T. W., Scott, J. M., Robinson, J., (2000). Improving the evaluation of conservation programs. Conservation Biology, 14(2), 356–365.

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In the years following Peacock’s paper, many economists have expressed interests on the topic of economics of heritage. These interests culminated in the publication of at least two volumes of collected contributions published in the late 1990s 12 which, most importantly, showed that there would probably be sufficient spaces for economists to make a sensible contribution to discussions about cultural heritage without assuming that financial values were all that mattered. Since then, the literature of heritage economics has been augmented with research works that draw upon theoretical and empirical developments in the broad field of cultural economics and where valuing cultural goods and services more generally remains a key concern for economic analysis. Such works include Valuing Cultural Heritage: Managing Change: Sustainable Approaches to the Conservation of the Built Environment (Teutonico and Matero (2003)), The Economics of Uniqueness: Investing in Historic City Cores and Cultural Heritage Assets for Sustainable Development (Licciardi and Amirtahmasebi (2012)) and Handbook on the Economics of Cultural Heritage (Rizzo and Mignosa 2013)) to name just a few.

Despite all these studies, literature directly pertaining to incentives from the perspective of cultural heritage conservation remains very much lacking with Mark Schuster, an associate professor of Urban Studies and Planning at the Massachusetts Institute of Technology, remarking the following: “Many forms of incentives … are underexplored in the preservation policy literature. It is almost as if these kinds of incentives have become so much part of accepted practice that it occurs to no one that they ought to be subjected to analytic scrutiny”13

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Schuster, J. Mark, John de Moncheaux, and Charles A. Riley II, eds. 1997. Preserving the Built Heritage: Tools for Implementation. Salzburg Seminar. Hanover, NH: University Press of New England.

13 Schuster, J. M. (1997). Inciting preservation. In Monchaux, J. D., Riley, C. A. (Eds.), Preserving the built heritage; tools for implementation. Hanover, NH: University Press of New England & Salzburg Seminar, p.51.

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with perhaps the exemption being works by Richard Roddewig for the Centre for Preservation Policy Study at the National Trust for Historic Preservation in Washington D.C. who has highlighted on the necessity of incentives in preserving historic areas and pointing out ways in which they might be of assistance. In his view, incentives have two specific roles to play in the conservation process. These include generating more rehabilitation of historic structures than would be otherwise possible, presumably through other forms of government action, and providing a reasonable economic return for owners of buildings protected and restricted by laws.14

Framing the understanding on the heritage conservation economics and incentivizing policies by a State is two variables; the value of a heritage building being how much it is worth if sold in the property market and/or the rental income that it could generate and the cost i.e., how much it takes to acquire the property and/or expenses that would be needed including renovation and upgrading works, etc. so that the building is attractive enough to be sold and/or rented by others. Hence, as long as the value exceeds the cost, owners will generally continue to invest or to rehabilitate the historic properties they owned without much incentives needed.

In Singapore and Hong Kong, the generation of economic (to the owners) and cultural (to the community) value is complementary and balanced leading to a win-win outcome.

Without a significant difference between value and cost, the owners are receiving sufficient benefits that the conservation expense may be fully retrievable through rental income and/or when the conserved properties are sold.

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Roddewig, R. J. (1987). Economic incentives for historic preservation. Washington, DC.: National Trust for Historic Preservation, Centre for Preservation Policy Studies

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An example of this would be the continued record-breaking sales of conserved shophouses in Singapore. Coupled with low interest rates and strong demand, conserved shophouses offer capital preservation during economic uncertainty due to their strong heritage value and limited supply. With robust sales hitting an all-time high of more than SG$1billion in the first half of 202115 with a price tag reaching some SG$11 million each for a typical conserved shophouse, any cost of repair and modification works will only be a mere fraction.

Hence in Singapore where the land value has remained high (as compared to the cost of maintaining the heritage buildings), property owners have continued to be motivated to seek development opportunities to fall in line with government’s mandates.

Similarly, some heritage buildings or sites may have high cultural value but relatively little economic value, even when the latter includes non-market benefits. Hence, if the cost exceeds the value, when it is more expensive to conserve and/or restore, few owners will want to invest further capital into efforts to conserve them, often time abandoning or leaving the buildings to deteriorate. Economists have referred to the difference between cost and value as an economic gap which will ultimately determine the fate of a heritage building.

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Grace Leong, “Shophouses sales hit $1b, surpassing 2019 and 2020 levels.” Singapore: The Straits Times, 21 August 2021.

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Gap Development Incentives

Cost Value

Figure 1 | Cost-Value Relationship: When costs exceed values resulting in a “gap”, this gap is closed through assistance such as incentives.

Source: Donovan Rypkema (adapted from)

All heritage buildings have “values” (including cultural, symbolic and environmental value, etc.) but in most cases, only economic value benefits. But heritage buildings also bring increased job opportunities, economic growth, etc.; beyond the confined of the conserved historic district. Hence the community as a whole would benefit too. Incentivizing conservation efforts to narrow the gap by tapping on incentives from the State is, therefore, rational and fair.

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2.

STATUS OF HERITAGE CONSERVATION

Threats to the survival of architectural heritage change over time depending on the extent of economic development within countries, ranging from complete demolition by neglect to demolition to make way for new developments. The way different countries choose to address these threats is dependent on their particular political and economic context.

The consciousness on the importance of architectural conservation in the built environment in Singapore and Hong Kong started at about the same time in the early 1970s.

Under British colonial rule for more than 200 years, the two cities have, not surprisingly, been strongly influenced by both Chinese and/or local and Western cultures; this hybrid culture remains very much manifested today in their unique urban fabric and architectural styles of buildings. Indeed, only until recently in Singapore, when attempts to conserve the “modern icons” of the nation-building era of the 1960-1970s have been initiated, most conservation efforts were centred around the legacy remains of British Colonial architecture.

While Singapore may have started its conservation conversation immediately postindependence, more pressing priorities such as the acute shortage of public housing and amenities have derailed any real progress until after the first global financial crisis in the late 1980s at which time, Hong Kong was doing the same earnestly in its identity search as its return to Chinese’ rule loomed closer towards 1997.

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2.1

SINGAPORE

Soon after independence from Malaysia in 1965, experts from the United Nations Development Programme (UNDP) were engaged by the city-state to offer critical planning and expertise in support of renewal efforts. Many of the early studies focused on urban renewal in the Central Area on a precinct-to-precinct basis; a later United Nations team in 1971 would also propose that Chinatown and Arab Town to be conserved in their plan as well.

Unfortunately, many of these ideas were postponed due to urgent national priorities at that time. With the benefit of hindsight, it was also during this time that a significant proportion of the built heritage was razed for redevelopment until the late-1970s when, topping the national policy agenda, the Economic Development Board convened to discuss on the conservation of historic heritage. With an aim to differentiate the city-state as a global hub, one of the recommendations was to protect of what remained of the city’s built-heritage to promote her as a distinctive tourist destination.

In order to receive public buy-in, URA unveiled the Conservation Master Plan in 1986.

Together with a series of exhibitions, it also introduced a set of conservation manuals for each of the ten historic districts in 1988. All these efforts culminated in the 1989 Conservation Master Plan; a plan which identified buildings that were at least fifty years old; the selection of which was “benchmarked against those of well-known historical cities to ensure that they could measure up to international standards.” The efforts were further strengthened with positive responses from property owners when rent control for the designated development areas was finally lifted. When asked what he has learnt from these early conservation efforts in Singapore, Dr Liu Thai Ker, CEO of the Housing and Development Board and later URA,

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summarized it best: “... the key lesson for conservation (in Singapore) that nothing happens by chance.”

The legal powers for the conservation of historic heritage in Singapore are conferred by the Preservation of Monuments Act (PMA) and the Planning Act. The Urban Redevelopment Authority Act also empowers URA to carry out the conservation provisions (as set out in the Planning Act). While the PMA is limited to protection of individual buildings recognized as national monuments, the Planning Act would be used for conservation of an area, a single building or groups of buildings within a conservation area.

As the national planning authority, URA is tasked to guide the city-state’s development through its Master Plan which among other strategies, informs on the permissible land use and density for development for every parcel of land in Singapore. Disciplined in its approach to planning and development, URA has earnestly pursued to re-develop Singapore. Today, aside from the National Heritage Board (NHB) which overlooks the conservation of national monuments, URA is the sole authority responsible to look at the nation’s past and the future at the same time and to balance the impulse to develop with the responsibility to conserve.

Admittedly, conservation is an integral part of urban planning and although they are inseparable, they are not exactly compatible neither and conflict of interests do happen. Using the argument that it is in the nation’s interests to do so, a few highly-cherished heritage buildings -- despite public outcries and appeals -- have been demolished in recent times. These include the Satay Club in 1995, the Old National Library in 2004 and the Geylang Serai Malay

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Village in 2011. In this sense, the Singapore’s approach to having just one main coordinating agency responsible for conservation is clear.

Aside from national monuments, the cost of conserving privately owned heritage properties rests completely with the owners. The process of gazetting a historical building begins with an identification process, often without much public consultation. Upon the issuance of the legal notice for conservation, the future development of the property would immediately be constrained as to how the building can be henceforth used, whether it can be modified, etc. Often accused of lacking market-oriented sensibilities, URA’s unilateral and almost “police” power or eminent domain power approach to decision making has caused unhappiness among property owners.

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HONG KONG

In Hong Kong, heritage conservation formally started when it became an item on the Government's agenda in the late 1980s and policy initiatives were introduced for the management and preservation of Hong Kong's cultural heritage. Prior to the 1997 Handover, there was already a growing recognition of the importance of heritage conservation so much so that in his 1998-1999 Policy Address, the former Chief Executive spoke on the need to promote cultural heritage to foster a sense of belonging and identity with the assurance that his administration would review its existing heritage conservation policy and related legislation for better protection of Hong Kong's historic buildings and archaeological sites.

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In 2004, the Hong Kong government launched a series of public consultation exercises to review its built heritage conservation policy. Specifically, the public was invited to express views on three broad questions, namely, "what should we conserve," "how do we conserve" and "how much and who should pay”. This was followed in 2017 with another round of public consultation exercise which included three large-scale regional forums, three open forums, and a focus group discussion for major stakeholder groups and concerned academics and professional. The 2017 discussion led directly to the establishment of the Commissioner for Heritage's Office (CHO), a focal point for public participation and the Government's heritage conservation work.

In the same year, the government started it exploration for new arrangements to provide economic incentives to encourage heritage protection by the private sector. Until recently, Hong Kong’s policy was focusing mainly on conservation of individual buildings but has since adopted a more district-based approach when considering the preservation and revitalization of the old Wan Chai area.

In terms of institutional structure for heritage conservation, Hong Kong’s arrangement is similar to Singapore in some ways. The Development Bureau, for example, coordinates infrastructure development, planning and land use, buildings, urban renewal and developmentrelated heritage conservation under one roof. The Bureau is supported by the CHO and the Antiquities and Monuments Office on the implementation of the heritage conservation policy.

The Antiquities and Monuments (A&M) Ordinance is the principal conservation legislation governing the protection of cultural heritage and empowers the Antiquities Authority to declare any place, building, site or structure of historical, archaeological or palaeontological

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significance as a monument. Under the A&M Ordinance, no one is allowed to demolish, alter or interfere with declared and proposed monuments without a permit from the Antiquities Authority.

Like Singapore, there is no tax incentive provided for heritage conservation projects in Hong Kong although the Government has been known to occasionally provide appropriations and ad hoc funding for private owners for maintenance and restoration works. Often, this is also supplemented with planning incentives but the latter is considerably rare. Because of the multi-disciplinary nature of heritage conservation and the complexities of land administration in Hong Kong, the city -- in contrast to Singapore -- has no clear single bureau or department that fully covers all the ambits of heritage. Nor is there a single law with the comprehensive power to cover the entire scope of heritage protection. Heritage is hence not solely a cultural issue; when it comes to implementation, often time, it is largely also an issue of land economics and in striking a balance, the government has constantly weighed the benefits of protection of certain heritage buildings against development.

Under constant pressure for urban redevelopment on limited land, Hong Kong has too lost a significant portion of its architectural heritage over the years including the demolition of Ho Tung Gardens in 2013,16 the old Kowloon Railway Station in Tsim Sha Tsui, the Murray House and the Hong Kong Club Building. Still, the city has claimed that restoration is part of its understanding of its identity. In a city obsessed with its future under the Chinese government, hauntings are, perhaps, a way of clinging to the past. The demolition of historic buildings has

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Built in 1927 by Robert Hotung, who became the richest man in Hong Kong, it was the first building where a Chinese person had lived on the Peak after British colonial law restricted it to Europeans in 1904.

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occasionally aroused concerns and opposition from voluntary conservation organizations which have actively continued to raise public awareness.

2.3

PUBLIC PARTICIPATION IN HERITAGE CONSERVATION

Be it in Singapore or in Hong Kong, the increasing public voices on conservation matters is important within the context of one of the critical issues that arises when a society undergoes rapid change and shifting social values, i.e., how to sustain a continuous flow of dialogue on what needs to be conserved and how to best conserve it? On the one hand are concern groups and the community at large and on the other, the State. The development presents an opportunity to correct some of the public’s sense of alienation which is so characteristic of modern society. It affords the opportunity for the citizens to regain a sense of identity with their own origins which often has been misplaced due to the process of urbanization. An often top-down decision making and prioritized financial considerations over social ones have further exacerbated the frustrations of the local communities as many would argue that decisions made are often lacking connection with the relevance to them. Even with the passing of the Land Betterment Charge Bill in 2021 in Singapore, for example, it remains unclear at the time this dissertation is prepared whether the Act will be useful and comprehensible to the general public and/or owners of heritage properties. Currently, there is insufficient community engagement except when the heritage site is already under threat.

Reactive protest to decisions made by the government can easily be avoided if decision making is mor inclusive and representative at the outset. In this regard, in recent years, both governments have initiated positive moves by responding to public demands for a greater say in heritage by opening up its hearings to the public.

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In the past few years, several episodes have occurred where the community has taken stronger a position on protecting local heritage in Hong Kong. These included the efforts to protect the old Star Ferry Pier, Queen’s Pier, King Yin Lei Mansion, the West Wing of Central Government Offices, etc. Quoting what John Earl, a British conservation professional, would have remarked from his experiences in the United Kingdom: “Local high street campaigns have fought to prevent the destruction of what historians and other experts have dismissed as unexceptional buildings.”17 The protests in Hong Kong have also seen a sudden surge in new grassroots concern groups such as The SEE Network, Heritage Watch and Heritage Hong Kong, all of whom want to have their voices heard.18 Other established groups such as the Conservancy Association and various professional institutes have also exerted their influence in mapping the way forward for heritage protection to which the government has swiftly responded to social demands and aspirations with the launch of several initiatives.

In Singapore, activism and public voices have generally been more subdue; it was not until at the turn of the new millennium that efforts to engage more diverse views and groups and moving away from the more elitists’ approach in working it was in the past. in 2018, the Heritage and Identity Partnership program was initiated in an attempt to further discourses on identity and the intensive use of land. These efforts have seen the growing collaboration and partnership in conservation matters between the public and private sector and communities are increasingly more willing to take ownership to define and shape identities and the built heritage.

Today, the built heritage in Singapore is more accessible and often more relevant through stories, talks, films and tours. Stakeholders are also actively leading placemaking efforts in

17 18

J. Earl, Building Conservation Philosophy. U: Donhead, 3rd ed, 2003, p. 31.

M. Brook, “Heritage Conservation Position Paper” Heritage Hong Kong, April 2007 (unpublished manuscript).

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sustaining the rich heritage and culture of historic districts and neighbourhoods. In 2019, URA celebrated its 30 years as the national conservation authority in Singapore with the publication of a series of personal reflections and stories on how the conservation program had developed since 198919. Although the issue of incentives or how all these achievements have been paid for was not mentioned.

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Serene Tng, ed. 30 years of Conservation in Singapore since 1989: 30 personal reflections and stories.

Singapore: Urban Redevelopment Authority, 2020.

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3.

STATE INTERVENTION AND INCENTIVES FOR CONSERVATION

Disagreements between the interests of the community and private owners frequently arise in the heritage arena. While private owners assessing the benefits and costs of their conservation projects would likely be based solely on the financial flows into and out of their private accounts, assessment at a community level is likely to include a range of collective benefits and costs not otherwise accounted for. In considering how to deal with cases where private owners claim to be disadvantaged when their properties have been gazetted for conservation, a government should not lose sight that the primary purpose of heritage regulation is to protect the public benefit arising from the built heritage at whatever level that benefit is experienced. It is necessary, therefore, that the government “act(s) more adroitly, both in the selective use of their own resources, and in drawing upon the full range of their abilities to engage the much greater resource of private and institutional action in the preservation of the built heritage.” 20 In short, it is important that the short-term financial exigency of some property owners should not be allowed to override the longer-term public interest.

The key to achieving the appropriate balance between private and public interest in heritage conservation lies in two policy directions; (1) application of clear and objective procedures for heritage assessment and (2) the provision of adequate resources for compensation when a legitimate need for it can be shown to exist. Recognizing the fiscal reality that no government can afford to conserve and maintain all the buildings worthy for

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Schuster, Mark J., John de Monchaux and Charles A. Riley II, eds., Preserving the Built Heritage: Tools for Implementation (New Hampshire: University Press of New England, 1997) pp.49-80.

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conservation nor all private owners to do the same on their own without financial assistance, it is, therefore, inevitable that funds from the private sector in the form of donations and trusts must also be sought. Importantly, there should also be consideration at the strategic planning level on revision of tax policies, real estate tax credits as well as new incentives and initiatives.

As many heritage buildings are privately owned and in order for the state to have the greatest influence -- instead of adopting a “deliberately one-eye approach”21 where all owners are forced to align to a desired (but often unclear) “conservation policy” -- the state must consider other forms of actions. In Singapore, for example, while the NHB is responsible for the conservation of “national monuments,” some 80% of the remaining conservation efforts are left to private developers/owners. Although many of these are not necessarily “national landmarks,” as an ensemble of a neighbourhood, they tell important stories of a past and the manner the nation has evolved over time.

State intervention in incentivizing conservation efforts -- such as the relaxation of planning guidelines and/or financial incentives -- is already a common practice in many countries. Such incentivizes would also counter-balance the often-tremendous market pressure of urban redevelopment on owners of heritage properties (or speculative investors) to maximize the potential of the land use (which will ultimately result in the demolition of unprotected heritage structures).

Roddewig has suggested that state incentives would facilitate more conservation works to be made possible and they would also serve as a compensation to owners of conserved

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Hood, The Tools of Government, xi.

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buildings that must now meet presumably tighter guidelines, restrictions in their future uses and raising maintenance costs. At a time when it is necessary for governments to continuously review their land use policies in attempts to create ever higher values with increasing allowable plot ratio for the use of land, such incentives will also reduce redevelopment pressures that threaten even the best maintained historic buildings.22

Importantly, state incentives may also promote a closer partnership between the publicprivate sector as resources are “pooled together” for a common course.23 The notion of sharing resources as a mean of collaboration and partnership also “justifies” the rationale why public funds are tapped on for the conservation of private properties because at the end of the day, it is a contractual understanding between the parties; the offer is made in terms of the government using some public monies for the purpose of listing (or gazetting) historical buildings and it is up to the private owners – if they think the offer has been fair -- to accept it. This approach encourages best practices and ensuring conservation program long term success. It also skidded the sensitive issue of ownership as the property remains solely in private hands.

In many parts of the world, management and investment by the local authority or investors in the heritage property market remain limited. Many simply do not have the financial capacity to provide incentives for the costly conservation and preservation works because the processes are often expensive. One of remedies to this problem is to use tax money for conservation efforts; but with a low tax system in cities like Singapore and Hong Kong, this

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Richard J. Roddewig, Economic Incentives for Historic Preservation (Washington, D.C.: National Trust for Historic Preservation, Center for Preservation Policy Studies, 1987).

23 Donald Haider, “Grants as a Tool of Public Policy,” in Beyond Privatization: The Tools of Government Action, ed. By Lester M. Salamon (Washington, D.C.: The Urban Institute Press, 1989), p.93-124.

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approach is resisted. Thus, to attract social investors to directly or indirectly participate in the conservation of the heritage property investment must be made through infrastructure development in the surrounding areas as this will be an important source of capital formation and stimulates the economic growth. Investment has “success domino effect” as the more the city attracts investment, the more it grows and the more the investors are willing to provide investment. The increased investment flows enable greater economic chain reaction to sustain such growth. Indeed, the higher taxes and funds could be tapped for the conservation and preservation works and maintaining the value of heritage property. With the knowledge, skills and capability of the investors to invest and conserve the heritage property, sustainable development could be achieved.

Another way to mitigate the problem of inadequacy of funds is for many governments to provide incentives to encourage private property owners to conserve or rehabilitate historic buildings. Such incentives can be important complement to regulatory controls embedded in local conservation requirements and guidelines. Developed over the years to encourage investment in heritage buildings and although effective and popular elsewhere, not all of them are practised in the two cities in this comparison study. Existing conservation literature on incentives such as grants of cash and in-kind contributions is extremely limited and often time, when it is available, it is rather anecdotal rather than analytical. The only exception is in the area of tax-based incentives. Other types of incentives include financial assistance in the form of grants and loans, regulatory relief incentives (from existing building codes and requirements) as well as zoning incentives (such as transfer of development rights, plot ratio bonuses, etc).

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3.1

TAX INCENTIVES

In many parts of the world, property taxes are levied on real estate as a source of funding for the operations of the government. Generally (although not always) these are ads valorem taxes based on the value of the property. Consideration of a property tax reduction or concession as an incentive to encourage owners of historical properties to conserve is, however, not practised in Singapore and Hong Kong but is a popular and widely applied strategy in the United States and Australia where heritage valuation, i.e., valuation of a heritage building with restricted development potentials (rather than its highest and best use) has been adopted in assessing property tax.

In the USA, for example, various property tax incentives are in place to encourage action on historic buildings. These incentives may include a tax abatement program (such as that in the state of Washington) which excludes the increased value resulting from residential and commercial rehabilitation, from its assessed property value for 10 years. The only conditions being rehabilitation standards be followed and a public access requirement once a year. In North Carolina, designated structures receive a 50% reduction in property tax while those in the state of Maryland allows local governments to establish rehabilitation property tax credit programmes by (1) providing a property tax credit of up to 10% of the expenditures from the property tax, or (2) property tax assessments reduced/frozen for a period of 10 years.24 After that period, tax assessments may again reflect the property’s full market value or at reasonable reduced rates.

Pickerill, T., Pickard, R. “A review of fiscal measures to benefit heritage conservation,” RICS Research Paper Series, Vol. 7, No. 6, 2007.

24

31

Another form of tax incentive is a waiver of sales taxes and/or offer of tax credits on construction materials used to rehabilitate historic landmarks that would otherwise be payable by the property owners. These tax credits may in turn be used to pay off property taxes, goods and service tax or other forms of taxation. Often, these incentives come with certain conditions that must be complied with including the requirement that a certain percentage of the cost of materials to be used for improvement works on the building’s exterior or façade, for example.

Although neither of this direct tax concession is offered in the two cities, in Singapore, a less direct form of tax-based incentive does exist as in the Tax Exemption Scheme for Donations to National Monuments (TES) by the National Heritage Board (NHB).

TAX EXEMPTION SCHEME FOR DONATIONS TO NATIONAL MONUMENTS (TES)

Formed in August 1993, NHB is today a statutory board under the Ministry of Culture, Community and Youth. A division of the NHB, the Preservation of Sites and Monuments (PSM) is tasked with the responsibility and authority on the preservation of National Monuments protected under the Preservation of Monuments Act (PMA). Its mission is to preserve and celebrate the shared heritage of Singapore’s diverse communities for the purpose of education, nation-building and cultural understanding. The application process is rather straightforward and is often completed in 2-3months.

32

Figure 2 | The TES Application Process Source: nbh.gov.sg

As of end-2018, up to seventy-two monuments of national importance have been protected under PMA. The TES helps owners or management committees of eligible religious and community raise funds for the restoration through incentivizing private donations to give through issuing tax exemption. The funds collected may be used for almost any aspect of the restoration works including construction of existing or essential ancillary structures within the monument compound, establishment of heritage galleries and payment of lease renewals. The TES, hence, encourages and benefits monument donors directly as those who are tax residents in Singapore will receive a “double-tax exemption” (twice the donation value) since January 2002 at the prevailing rate as determined by the Inland Revenue Authority of Singapore at the time of donation. Such donations are also structured in such a manner where the state will also match, for example, one dollar for every additional dollar that can be raised from other sources toward a conservation project.

33

While such grants are, of course beneficial, on closer examination, however, the scheme has been criticized for its limitation in breadth and coverage. Of the “national monuments” being incentivized under the scheme, most are religious buildings and a few have been associated with early pioneers of Singapore. While these landmarks are important and indeed “testimony of Singapore’s unique, multi-ethnic and rich cultural heritage,” the scheme does not cover larger “sites” like a historical neighbourhood, or privately owned properties.

More importantly, the program has also been looked at rather suspiciously by some groups that it is merely an attempt by the state to sort out the overlapping and intersecting duties of heritage guardianship and responsibility as they are viewed in the society, a topic that inextricably tied to larger questions on identity.

DEVELOPMENT CHARGE TAX (DC)

Unique to Singapore -- and often time one would argue whether this is in fact an incentive or a disincentive to conservation efforts, a Development Charge (DC) is levied when Planning Permission is granted to carry out the development of a project that would presumably increase the value of the land. While it is rather odd for an owner not wanting to do so (increase the value of his land) at the same time, the development would immediately attract a DC tax.

For example, a conservation project involving adaptive reuse of a series of warehouses to a new boutique hotel use, this would be considered an upgrade to a higher value use by definition and the owner would have to pay for the difference between the DC rate for the existing warehouse versus that of a new hotel. The rates are reviewed every six months by the Chief Valuer at the Inland Revenue Authority of Singapore. While the government often uses these rates to dampen a “heated market” in a particular market segment as well as an indicator of the

34

national economy, often time, the DC payable adds a significant cost to a project. In many ways, instead of encouraging investment in conservation efforts, the DC tax disincentivizes the process.

Having said the above, URA may consider a “development charge waiver” due to enhancement from change-of-use (a key aspect of adaptive reuse); the latter is achieved by mean of a partial exemption of DC payable for the conserved component of the conservation properties.” 25 For example, where a conserved building is incorporated within a new development, only the DC for the new addition will be payable. Such waiver incentives are reviewed by URA on a case-by-case basis but what the basis is, remains rather ambiguous.

An example whereby a partial DC waiver is granted would be the case of the Golden Mile Complex.

The failed efforts to conserve the Pearl Bank Apartments may have initiated the review of current conservation policies in Singapore although admittedly, the failure of the latter may be attributed to the lack of a legal framework in place that fully supports conservation efforts.

25

https://www.ura.gov.sg/Corporate/Guidelines/Conservation/Additions-Alterations/Development-Charges

35

Considered by many to be an innovative and significant predecessor

to

high-rise

residential living of today, more than 90% of the home-owners

Figure 3 | Simulating the potential allowable re-development of Golden Mile Complex with additional bonus GFA Source: DP Architects Pte Ltd

proposed

that

the

iconic

landmark

be

conserved.

However, the effort failed to achieve the 100% approval

which would be required legally to gazette the building for conservation. It is ironic to note here that for an en-bloc sale, only 80% of the approval would be needed.

Perhaps learning from the Pearl Bank Apartments experience, URA announced an unprecedented and pre-emptive decision in 2019 to gazette the Golden Mile Complex (GMC) before it was formally in the market for an en-bloc sale. This is despite the fact that the GMC is largely strata-titled property.

Planning and financial incentives offered to the successful developer will include a bonus plot ratio which offers additional GFA (sufficient for an additional 30-storey tower to be located next to the main building within the site),26 a partial DC waiver on the additional floor area (capping at 10% of the market value of the entire development) or 10% of the estimated land value of the entire development (based on the DC rates as of September 2020)

26

This will result in a total Gross Plot Ratio of 5.6 for the site, a one-third increase over the existing development intensity.

36

depending on the approved use mix,27 option to adjust the irregular site boundary and to topup the lease to 99 years. URA would allow the successful developer the flexibility to adapt the building to a mix of possible uses.

It was unclear at the time of the announcement whether this approach would be a oneoff arrangement or would it be similarly offered for other conservation projects in the future.

The latter would be clarified in the Land Betterment Charge Bill which was passed in Parliament in May 2021.

LAND BETTERMENT CHARGE (LBC)

The Land Betterment Charge (LBC) Bill has several purposes in mind which in addition to defining and imposing a tax on the increase in the value of land resulting from a chargeable consent given in relation to the land, the Bill, most importantly, is to ensure the return to the community an appropriate proportion of economic benefits from the grant of rights to develop or otherwise use of land.

One way the LBC promotes land development activity would be through the continuation of existing concessionary reliefs from DC which would then incentivise developers to develop land for certain uses. It would also be a platform for the Government to implement “future concessionary reliefs for developments that promote sustainable development of land and which balances the interest of current and future generations of

27

Enhancement in value may arise from change of use.

37

Singapore”28. The conservation of the Golden Mile Complex was cited by the Minister in his speech as an example whereby concessionary relief for change of use proposals within conserved buildings has been offered.29

Hence, the Bill is important in the sense that it enables and reaffirms the continuation of DC exemptions. In the future, it is expected that concessionary relief would be granted on the grounds of public interests including for conservation of heritage and arts spaces.30 The impact of a partial DC waiver has a major financial impact for the developers bidding for a site like the Golden Mile Complex. At just a 10% DC waiver, there is potentially “a saving” of approximately of SG$38-45 million (See Differential Premium Case Study 1 in Appendix).

Ho, Norman, Chou Ching and Gazalle Mok. 2021. “Land Betterment Charge Bill Introduced to Replace Development Charge and Differential Premium.” Client Update: Rajah & Tann (Singapore, May 2021).

29 “Edwin Tong responds to clarifications sought on Land Betterment Charge Bill”. Channel News Asia: 10 May 2021. Video available. https://www.channelnewsasia.com/news/parliament/videos/may/edwin-tongresponds-to-clarifications-sought-on-land-betterment-14781838 30 Mok, Gazalle. 2021. Interview by Author. Singapore. June 18, 2021.

28

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3.2

GRANTS AND LOANS

DIRECT/INDIRECT GRANTS

The most common direct incentive comes in the form of grants and of these, the most important with respect to historic conservation is the project grant which is normally provided directly to the owners of historic properties for particular purposes (such as maintenance, restoration, etc) or to non-profit institutions working to further conservation in one way or another. Aside from direct grants, the State may also offer incentives as indirect grants to the private owners of heritage properties. The best-known examples of indirect incentives are taxbased incentives but other forms exist including low interest rate loans, loan guarantee, etc.

One of the most appealing attributes of indirect incentive programs is that it does not involve direct transfer of money and no state expenditure is recorded.

Typically, indirect incentives allow a considerable degree of private sector control over how public sector initiatives are played out. They may be simple for the State to enact and administer, and often time, do not require complicated state bureaucracy to oversee them, though the question of how to ensure that the incentive is having the desired effect often remain a serious one. On the other hand, indirect incentives are often being seen as free from the State’s interferences. When an incentive is provided through foregoing taxes that would otherwise be paid, no direct state check is ever written nor is a direct state expenditure ever recorded. But, of course, the foregone taxes do represent a cost to the state, and the increased difficulty of tracking that cost does not mean that the incentive is without cost. Despite this obvious fact, many states are turning to tax-based incentives more and more to limit the size of the public budget.

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Getting these expenditures off budget through tax-based incentives has an important related consequence. To the extent that indirect incentives become less visible, they become less likely to be subjected to the regular review that one would normally expect from state programs, making it even harder to know what the impacts of the programs have been. Taxbased incentives are of two main forms; those whereby the taxable base is reduced prior to one’s tax liability is calculated and incentives through which the taxes owed are decreased indirectly.

To illustrate the difference, consider the example of a program to help owners offset the additional costs of maintaining and rehabilitating historic properties. The state might provide direct grants or it might choose a tax-based incentive approach. If it chooses the latter, there are two basic ways to structure the incentive. In the first, the state may allow the owner to deduct from his or her income the costs of specified maintenance or rehabilitation expenditures for the property, thereby reducing the owner’s effective taxable income. This, in turn, results in tax savings. The state may impose a variety of limits on this deduction such as minimum expenditure that would be required to receive the benefit or a maximum – but the basic principle remains; the tax incentive allows a specified costs to be deducted from income.

This form of tax incentive is also referred to as an income tax deduction but an incentive of this type does not allow deduction from one’s taxes; rather it allows a deduction from one’s income before calculating the taxes due.

Alternatively, the state may take the total that the owner has spent on specified maintenance or rehabilitation expenditures and allow the owner to subtract a fixed percentage

40

of those expenditures from his or her income tax. This form of tax incentive is typically referred to as a tax credit because the net result of the incentive is a credit against taxes; a 50% tax credit, for example, would allow the owner to subtract up to half of his or her expenditures from the income tax that he or she would otherwise owe to the state.

Either way, the result is a decrease in the net cost of maintenance and rehabilitation providing an indirect financial incentive for owners of eligible properties to make these expenditures. In this way, there is a cost sharing between the private owner and the public at large because the public allows the use of foregone taxes to help pay for a portion of the owner’s expenditures. There is, however, an important difference between the two models. In the case of a deduction, the benefit that the individual owner receives via the incentive is a direction function of his or her marginal tax rate. Because most societies have progressive tax systems in which the marginal tax rises with his or her income. Paradoxically, the result is a regressive incentive.

A tax credit on the other hand treats all owners’ expenditures in the same manner, offering the same percentage break on every expenditure. Some countries, recognizing the equity problem embedded in structuring tax incentives as deductions, have systematically replaced existing deductions in their income tax law with credits. Canada, for example, has done so in recent years. Interestingly, though the United States tends to choose deductions as its preferred form of tax incentives, the federal tax incentives offered in the field of historic conservation have tended to be structured as tax credits.

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PRIVATE GRANTS | CORPORATE SPONSORSHIP AND CONTRIBUTIONS

As state funding may sometimes be limited or inadequate to meet the need of heritage conservation and promotion, encouraging the private sector to invest in architectural heritage such as through the provision of tax incentives may be an approach that could extend the financial responsibility beyond the State. The private sector could play an important role in heritage conservation in terms of corporate sponsorship and contributions from foundations and private individuals. Financial incentives to encourage private investment in heritage conservation activity may include relief from income and corporation tax, property tax, etc.

Although the choice is often influenced by political traditions in different countries, other forms of tax incentives in the form of donations and sponsorship relating to heritage trusts, foundations, etc. can be established to promote, develop and research on cultural, social, economic, educational, scientific, academic and philanthropic activities. In Macau, for example, the gaming operators are required to pay 1.6% of their gross revenue to fund such programmes.

In Singapore, from the casinos as well as the Singapore Sweep, the government collects similar taxes; although whether funds collected benefit heritage conservation is not clear. There are other charity organizations which provide financial support for heritage conservation as well the most notable examples being the Hong Kong Jockey Club Charities as well as the Lord Wilson Heritage Trust.

Established in 1993, the Hong Kong Jockey Club Charities has funded several heritage conservation programmes including the wall restoration at Lo Wai in 1997 and restoring the Hung Shing Temple in 1999. In October 2007, the Trust provided HK$1.8 billion (SG$300K) to fund the renovation of the disused 19th-century Central Police Station Compound and

42

transforming it into a heritage, arts, cultural, and tourism hub. The Trust also funds any recurrent deficit incurred by the hub during the initial years of operation.

The Lord Wilson Heritage Trust, established in December 1992, aims to achieve its objectives of preserving and conserving the heritage of Hong Kong through funding research activities and other supporting projects including identification, restoration and refurbishment of relics, antiquities, monuments and other historical, archaeological and paleontological objects, sites or structures, provision of facilities at antiquities, monuments, and historical and archaeological sites or structures in order to facilitate public access to and appreciation of such sites or structures; audio, visual and written recording of sites of historic interest, traditional ceremonies and other aspects of human heritage of Hong Kong, publication of books, papers and periodicals, and production of tapes, compact discs and other articles relating to the objects of the Trust; holding of exhibitions and conferences relating to the objects of the Trust; educational activities which increase awareness of and interest in human heritage of Hong Kong; and any other activities which promote the objects of the Trust.

By the end-March 2020, the Trust has approved 273 community projects with a total subsidy of HK$65.82million (SG$11.5 million) including heritage-related activities as well as scholarships to carry out research projects.

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BANK LOANS

The much-discussed Historic Urban Landscape (HUL) approach, now implemented in many countries at the national levels and implemented into local strategies, has positive effect in what some property owners think about and manage their heritage resources. As heritage conservation is integrated into a larger urban development context, the level of uncertainties with HUL has been reduced significantly. Designating a building to be conserved, for example, often comes with improvement works in its immediate neighbourhoods, such as addition of pedestrian walkways, plazas, landscaping, control of signage and more positive activities to the area. This has resulted in an increase in confidence as there are now clarities that the environmental variables affecting an individual heritage building or a group of them will remain stable rather than rapid and adverse changes that come with the pressure of increasing urbanization and redevelopment. With this stability and reduced risk, banks and finance institutions now today willing than ever to provide competitive loan terms.

Although “heritage loan schemes” are widely available in Australia and the United States, they are not so in Singapore and Hong Kong. Under this arrangement, owners who do not qualify for traditional loans have the option to apply for micro-loans. An example of such heritage loan scheme would be the Financial Assistance Programme managed by the Heritage Council of Victoria to provide the conservation of recognized heritage places in Victoria, Australia. The program provides low- or no interests loans for registered privately-owned heritage places. Generally, these loans are on 3 to 5 years term, repaid by quarterly instalments of principal and interest and secured against the properties. The major advantage of a bank loan versus a grant is that once the loan is repaid, the money could be re-circulated to finance

44

more loans. To qualify for these loan schemes, the owners may also be asked to increase job opportunities by hiring certain low and moderate-income persons.

3.3

ZONING INCENTIVES

TRANSFER OF DEVELOPMENT RIGHTS (TDR)

Land ownership comes with certain rights including the privilege of building a structure on it. The transfer of development rights (TDR) as a zoning incentive is a regulatory tool that allows a government to authorize the transfer of allowable density from one building or site to another. In essence, the development

Figure 4 | Source: Department of City Planning: City of New York

rights of land ownership could be separated and sold off from the land. Where TDR legislation permits this approach as an incentive, a “sending zone,” often a heritage precinct, sends the development rights to a “receiving zone”, the area where the additional density will be transferred to for a “reasonable beneficial use” value. The owners of historic properties may sell unused development rights to a developer who then uses the allowable additional density on another site by erecting a larger building on the “receiving site” than the zoning would normally allow. In return, the historic property owners who sell the TDRs may use the proceeds from the sales to pay for necessary repairs to their properties. A TDR involves a deed restriction which is essentially a written agreement that restrict or limit the future use or activities that may take place on the property; by doing the latter, the deed restriction preserves the character of a neighbourhood for the long term. These restrictions will appear in the real property records and are legally binding and all future owners become a party

45

to the agreements when they purchase the property. While most deed restrictions have an average life span of 25-30 years, some are in effect in perpetuity. Hence, in many ways, TDR serves as a compensatory instrument to appease aggrieved historic property owners whose development rights may be suppressed because of conservation or other planning restrictions.

In order for the TDR programs to work, there must be a market for the development rights that owners of historic properties would sell to. Communities in which the overall real estate market is sluggish may not find TDRs very useful while cities with robust real estate markets tend to result in building density and height limits so generous that there is little incentive for developers to purchase TDRs.

A successful TDR transaction can be complicated to implement; often it would also demand the planning authorities to be experts on real estate matters as well. Although the TDR programs have been exercised in a number of cities in the United States, generally, they have not been used often. The City of San Francisco, for example, has included a TDR program in its Downtown Plan enacted in 1985. Approximately 10-15 TDR transactions involving historic buildings have been carried out since while in New York City, a TDR program was established in the early 1960s with only 25 TDR transactions completed to date.

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Would

URA

be

prepared to consider TDR? Probably not but findings have shown that URA has, at least, mooted on this idea when in 2007, attempt was made by the Figure 5 | The “Butterfly House,” 2006. Source: Rachel Lau, “Singapore’s 4 lamest attempts at Building Conservation”, RICE, 9 June 2017. Online at ricemedia.co

Historic Architecture Rescue Plan (HARP) to save 23,

Amber Road (also known as the "Butterfly House")31 from demolition. When the property was sold to AG Capital in 2006 for SG$8.9 million, the plan was for a new condominium tower with 54 units stacked in an 18-storey building.

Working with URA and after much negotiation, a hybrid design was eventually adopted with about 125 sq.m. of the old house conserved while the rest of the house, including the crescent-shaped veranda, was demolished. While the solution was not absolutely satisfying, reviewing URA’s files from that time revealed, however, the tremendous efforts involved to ensure that the respected heritage building would, at least, remain (partially) intact while permitting the owner to realize the development potential of the property.

31

A Neo-Renaissance style bungalow built in 1912. Designed by Regent Alfred John Bidwell who was also the architect of Singapore’s most important buildings from the British Colonial era including Raffles HotUrban el, Victoria Memorial Hal and Goodwood Park Hotel. The "Butterfly House" was designed with generous sea facing verandahs for the house which were extended along curved "butterfly" wings so that the view and sea breeze circulation were maximized. The result was a unique crescent-shaped structure which was visible only from the seafront. Land reclamation to create Marine Parade and East Coast Park subsequently obscured this part of the house from public view. For decades, the entrance porch along Amber Road was the only visible portion.

47

Of the 5 options that were considered, the issue of whether the government would consider allowing the owner to transfer the development potential to another site. The study showed that while this option would be viable in cities where land has historically and legally development rights (where an owner can make use of the residual

Figure 6 | The Aristo @Amber Source: Rachel Lau, ibid. RICE, 9 June 2017. Online at ricemedia.co

development rights of the land occupied by a heritage building, exchanging the unrealized floor area of the heritage site for use in another property he or she owns), it was concluded that in Singapore, land does not, in fact, have inherent development rights.

While the Master Plan prescribes land use and gross plot ratio for each piece of land, such prescription is not a legal entitlement.32 If the unused development potential is allowed to be transferred to another site or sold to another party, this could lead to quite a lot of unplanned transfers in URA’s neatly wrapped Master Plan.

Another reason why TDR may not be workable in Singapore is that it may also set the stage that compel assessment of property rights “loss” as-of-right; it is hence an inappropriate urban policy for a land constraint city like Singapore.

32

Conserving The Past Creating The Future Amber Roads Butterfly House, Controversy, Contestation and Closure - available online: https://www.ura.gov.sg//media/User%20Defined/Conservation%20Portal/Articles/Mountbatten%20Road/23%20Amber%20Road/Co nserving%20The%20Past%20Creating%20The%20Future_Amber%20Roads%20Butterfly%20House.pdf

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In

Hong

Kong,

however, the government has successfully

implemented

more than ten transactions whereby

development

parameters

have

been

considerably

relaxed

and

three TDRs 2008; the Tiger

Figure 7 | Tiger Balm Garden and Haw Par Mansion (1950s) Source: https://zolimacitymag.com

Balm Garden complex case33 being the most notable example of the latter. In 1998, the entire Tiger Balm Garden complex was sold to the to the land development company, Cheung Kong.

The redevelopment proposal originally entailed the demolition of the entire complex building, including the Haw Par Mansion but after a two years discussion with the developer, the Hong Kong Government successfully reached an agreement such that Hong Kong’s Antiquities and Monuments Office (AMO) would be responsible to preserve and restore the Haw Par Mansion itself together with its private garden as a museum.

In surrendering the mansion back to the government, the developer was allowed to retain the same total gross floor area that was previously approved but on a considerably reduced site. The land premium was also substantially reduced.34

33

The Tiger Balm Garden complex at Tai Hang Road consisted of the Tiger Balm Garden, the Haw Par Mansion and its private garden. The Mansion is one of the very few remaining private residences of the 1930s, built in the Chinese Renaissance style with a unique mixture of the prevailing Chinese and Western ideas in artistic decoration.

34 http://www.landsd.gov.hk/en/exc_mod/exc/exc2001e.pdf

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The Tiger Balm Garden was finally demolished for redevelopment in 2004, many of the garden's murals and statues were salvaged by the AMO. The site of the Garden is now occupied by the residential development, The Legend at Jardine's Lookout.

Figure 8 | Tiger Balm Garden Complex Source: South China Morning Post, 4 May 2019.

Another interesting TDR case was the preservation of King Yin Lei35 where in 2008, the Government reached an agreement with

the

owner

on

a

possible

conservation option for the mansion.

Under the proposal, the owner surrendered the whole site to the Government after restoration. In return,

Figure 9 | King Yin Lei Estate Source: www.timeout.com

the Government granted an adjacent green-belt site (of roughly the same size) to the owner for a new residential development. The owner has also agreed to carry out and fully fund the restoration works of King Yin Lei under the supervision of the AMO. In April 2008, the proposal obtained the approval to rezone the green-belt site into residential use. Notwithstanding the cases mentioned above, there

35

King Yin Lei is a rare surviving example of Chinese Renaissance style reflecting the design and construction excellence in both Chinese and Western architecture of the pre-World War II period.

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is no standing arrangement in Hong Kong to continue with the TDR as each case is considered on individual circumstances.

In areas that have both a high potential for redevelopment and existing sites of heritage significance, allowing TFR between properties in exchange for legal protection of the heritage asset can effectively balance city-planning objectives. Specifics of a transfer will vary depending on the location, but density transfers are intended to allow for financial support of heritage buildings, while allowing the target densities in an area to be achieved. In doing so, these programs provide a mutual benefit for heritage and non-heritage property owners.

THE STRATEGIC DEVELOPMENT INCENTIVE SCHEME - SDI

Another zoning incentive scheme introduced by URA in March 2019 is the Strategic Development Incentive (SDI) Scheme. Its intent is to encourage the redevelopment of older buildings in strategic areas that will positively transform the surrounding urban environment.

The scheme provides a framework for the possibility of a deviation from existing planning parameters for the site including additional gross plot ratio, re-zoning land use as well as increase in allowable building height, if justified.

It should be noted at the out-start that the SDI scheme is not the traditional incentive to encourage conservation nor is the scheme from URA specifically targeted in its agenda for conservation. It is, nevertheless, flexible enough as can be seen in the case study to follow that a developer can voluntarily propose to conserve a large part of the property in exchange for incentives to be applied within the site. Hence most proposals going for the SDI incentive

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should be relatively large. This is also unlike the case of the Golden Mile Complex. Under the SDI scheme, it is “self-initiated” by the property owner to conserve a building that is in alignment with URA’s plan which as a private development, it may be difficult for URA to impose conservation requirements. This is especially true for the “modern icons” built in the 1960-1970s that may not have significant historical values and worse if some of these buildings have undergone design changes and modifications since they were first erected.

Case Study #2 in the Appendix illustrates how the SDI scheme works in the proposal submitted to URA for the conservation of 111 Somerset (also once known as the Singapore Power Building).

Figure 10 | The Winning Competition Entry for the Singapore Power House Source: URA Archive; Singapore Institute of Architects

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A note should perhaps be added here on this case study. While discourses and guidelines on architectural conservation have focused on the three “R”s such as maximum retention and the “reversibility” of any work done as perhaps part of adapting the building for a new use, it is NOT economically viable that these guidelines be applied to ALL buildings especially so when conservation has not been identified that one day in the distant future, it may be.

How should one address issues such as the removal of the ceramic tiles that used to clad a building but have now been removed? Many conservation purists may question the authenticity of the end product from this case study and whether such an approach to conservation should be considered. The author’s opinion is that this is a win-win situation for all as the proposal would, in many ways, bring the architecture and aesthetics of a building back “as close as possible” to its original design intent. This would not have been possible otherwise. In exchange, the developer would be granted additional gross floor area for residential use; the sales profits from which could be ploughed back for the long-term maintenance of the “conserved” component along Somerset Road in the future.

OTHER ZONING VARIANCES

Not exactly a financial incentive, owners of historical designated structures may also petition for a special exemption for any type of use which would serve to perpetuate the viable contemporary utilization of the historic structure. If the petition for a change in use is considered, the owners would need only to demonstrate that the grant of the variance will not be detrimental to the public welfare.

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Apart from granting transfer of development rights, the state may also – as a tool to incentivize private owners and developers to preserve their built heritage and encourage conservation-cum development by relaxing the development perimeters. This tool can generally enhance the development flexibility and improve the profitability of a site. The increase in revenue can be used to support the costs on conservation.

PRIVATELY INITIATED CONSERVATION | BONUS GFA INCENTIVE SCHEME

In 2004, URA has introduced the Bonus GFA Incentive Scheme to enhance the economic viability of conserving the private-owned bungalows. Many of these bungalows are normally independent dwelling units -- one to two storeys high – and first introduced into Singapore and Malaya by the British in the 1830s and form a significant part of Singapore’s heritage.

Under the scheme, both the owners who volunteer conserve their bungalows and the owners whose bungalows are conserved under the URA’s initiative would be entitled to extra GFA incentive. The manner in which the bonus GFA incentive is to be tabulated is stated in URA’s website whereby owners are entitled to compute the GFA of their bungalows as additional GFA over and above the GFA stipulated under the Master Plan subjected to a maximum of 10% allowed under the Master Plan.

In Hong Kong, the state has also offered relaxation of development perimeters to private owners and developers to facilitate the developer-initiated built heritage conservation.

Since 2008, ten conservation-cum-development cases in Hong Kong are offered with planning

54

incentives in the form of relaxing the development perimeters such as site coverage, plot ratio, building height and land users. However, unlike Singapore, there is no policy in Hong Kong formalizing the granting of incentives. Generally, however, the following considerations in approving the relaxation of development perimeters include the correlation between the relaxed development perimeters and the preserved built heritage; how the proposed conservation will fulfil the current policy on planning and conservation, the compatibility of the proposed development in the vicinity and the conditions required under the approval of relaxations; and the precedent cases of approving similar relaxations.36

3.4

EXEMPTIONS FROM BUILDING CODE REQUIREMENTS

Today’s building codes were inevitably written with new construction in mind and are often inappropriate for historic structures. For this reason, many communities recognizing that it is difficult for historic buildings to meet local building code requirements, allow waivers of certain building code provisions for historic structures as long as public safety is not compromised.

As building code enforcement authorities become more open to acceptable alternative solutions and compliance concepts, where practical, this will permit the continued use of existing buildings and structures without creating overly restrictive financial burdens on owners or occupants. Examples of such practices in Singapore include the waiver of strict Land Transport Authority (LTA)’s coach parking requirement for hotel developments where

36

Cheung, Lai Ying, Cindy, “The “Secret” Incentives: The Feasibility of Developer-initiated Built Heritage Conservation in the Urban Area of Hong Kong.” The University of Hong Kong, June 2020, pp.34-50.

55

rehabilitated buildings may have been adapted for new uses. To reduce traffic congestions within a historic district, the authorities may also relax the number of car park lots normally required be reduced without the need to pay for a car park deficiency charge as long as conservation guidelines are fully complied with and the conservation works are completed in accordance with the approved plans.

Another example of exemption may include Building Construction Authority (BCA)’s Handicap Accessibility requirement where addition of long ramps and elevators may be detrimental to the functionality of internal spaces and/or even the façades of conserved buildings. Another exemption that is sometimes offered would be the consideration for residential and institutional use for sites zoned Commercial in the Master Plan.

3.5

HERITAGE LOTTERY FUND

Another increasingly popular source of funding for heritage conservation is in the form of Lottery Fund whereby (a small percentage of) money raised through a national lottery is allocated as grants to sustain and transform the heritage of a nation. While lotteries are always likely to be the subject of extreme opinion and controversy and is not the focus of this dissertation, the fact remains that participants have individual accountability to play within their means. As long as they do so responsibly, it is also contributing to the national funding of various good causes including public education, social services and heritage conservation projects.

56

The Singapore Pools has, for example, been a source of fundings for a wide range of worthy causes, contributing up to SG$2 billion annually to the Government’s coffer in the form of taxes and duties. It has also funded iconic infrastructures including the Esplanade – Theatres On-The-Bay in 1996 and more recently the Sports Hub. Unfortunately, no information is readily available on whether funding has been allocated for heritage conservation efforts in Singapore.

THE JOCKEY CLUB CHARITIES TRUST

In Hong Kong, the Jockey Club Charities Trust has supported various renovation and heritage conservation projects. Founded in 1884, the Hong Kong Jockey Club is a racing club with an integrated business model, comprising racing and racecourse entertainment, a membership club, responsible sports wagering and lottery, and charity and community contribution. Through this model, the Club generates economic and social value for the community and supports the Government in combatting illegal gambling. In 2017-2018, the Club made a record return to the Government of HK$22.6 billion (SG$4 billion) in duty and profits tax and contributed HK$1.2 billion (SG$250K) to the Lotteries Fund.

One of the Club’s most high-profile projects – a partnership between the Government and the Club – is the Central Police Station (CPS) Revitalisation Project which includes the conservation and revitalization of the former Central Police Station, Central Magistracy and Victoria Prison. The aim is to transform the site into a culture and leisure destination where heritage, contemporary art, performance arts and lifestyle elements are integrated for all to enjoy.

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THE NATIONAL LOTTERY HERITAGE FUND (UNITED KINGDOM) (NLHF)

Perhaps the most successful and largest of national lottery fund dedicated to the financing heritage conservation efforts is the National Lottery Heritage Fund (NLHF) in the United Kingdom. Using money raised through the National Lottery, the Heritage Lottery Fund (HLF) offers grants "to conserve the UK's diverse heritage, to encourage people to be involved in heritage and to widen access and learning." Founded in 1994, the Fund has invested in a broad range of heritage projects including nature works to improve habitats or conserve species as well as to connect people back to nature in their daily lives. It also conserves historic landscapes such as public parks, historic

gardens

and

botanical

gardens, records oral history of people’s

stories,

memories

songs,

organizes

archaeological

and

activities and even acquires one-off object as part of a collections development policy such as Titian’s

Figure 11 | NLHF 11994-2019) Source: heritagefund.org.uk

Diana and Callisto for the National Gallery of Scotland in 2012. As of end-2020, the fund has invested more than £8.3 billion (SG$15 billion) in 49,000 heritage projects.37

In January 2019, it further simplified its funding schemes under the National Lottery Grants for Heritage with awards up to £5 million (SG$9.5 million). Funding requests for

37

https://www.heritagefund.org.uk/

58

projects over £5 million will be considered as part of two time-limited national competitions to be held in 2020–21 and 2022–23. Some of the most important projects the Fund has provided financial support for include the restoration of the Kennet and Avon Canal and Heaton Park in Manchester (1996 and 1999 respectively), the creation of the National Waterfront Museum in Swansea (2002) and the refurbishment of the Kelvingrove Art Gallery and Museum in Glasgow (2002).

In addition to funding worthy conservation projects, research has also indicated that the various programmes it has supported has importantly strengthened social cohesion and the local communities as a whole as people are increasingly feeling a greater sense of connection with a local area to which they belong. 38

PUBLIC-PRIVATE PARTNERSHIP - PPP A

Public–Private

Partnership scheme (PPP, 3P, or P3) is an arrangement between

two

government private-sector

or

more

agencies

and

companies.

PPP works well for large Figure 12 | A Public-Private People Partnerships (P4) Process Framework for infrastructure development in Hong Kong.

Source: ScienceDirect.com 38

Clark, Kate and Gareth Maeer, The cultural value of heritage: Evidence from the Heritage Lottery Fund.

Cultural Trends 17(1):23-56, March 2008. Also available on line at https://www.researchgate.net/profile/Kate-Clark8/publication/232903796_The_cultural_value_of_heritage_Evidence_from_the_Heritage_Lottery_Fund/links/ 602bbde7299bf1cc26cbbe74/The-cultural-value-of-heritage-Evidence-from-the-Heritage-LotteryFund.pdf?origin=publication_detail

59

scale government projects to be completed with private capital financing and services up-front; in return the private sector benefits from tax concessions or other operating revenue over the course of the Contract. Hence, a PPP arrangement between private companies and governments provide benefits for both parties, combining the skills and resources of both through sharing of risks and responsibilities. For the government, it stands to benefit from the expertise, technology and innovation of the private sector and also the delegation of day-to-day operations to the private sector and thereby improving the operational efficiency of providing public services and focusing on policy, planning and regulation.

In return, the public sector, for its part, provides incentives for the private sector to deliver projects on time and within budget. Despite these advantages, PPPs are often criticized for blurring the lines between legitimate public purposes and private for-profit activity, and for perceived exploitation of the public due to self-dealing and rent seeking that may occur.

However, the private partner may face special risks and bear the burden if it cannot provide the service promised including delay in delivery, cost estimates over-run, etc.

Although the Ministry of Finance has indicated that the building industry in Singapore is ready to take advantage of the many beneficial aspects of PPP,39 they have generally focused on design-and-build (D&B), build-operate-transfer (BOT) or similar projects. For rehabilitation or heritage conservation projects, the application of PPPs remains untapped in Singapore. One of the reasons for this is, perhaps, related to the fact that there are not that

39

https://www.ifaq.gov.sg/mof/apps/fcd_faqmain.aspx?qst=hRhkP9BzcBImsx2TBbssMsxu7lqt6UJK70a1wAE Vmydmntnl%2FAOlN2tQRU4ZLpZlgE5B%2FtUOWfkV%2F05tBMT2iM%2Bk%2FPAF8LWw2e3c8436d h5mseztnq24wt31l088IqrJCij4xrmnlFmyuVkNwuL5TCWfooeFMtuIbxseSZ5g3uan%2F%2BmRWZ9Nq3Na 2d%2FsavCclsiUctowKrG2RWWPJkOlvyo%2B3jD9eqwe54tVCXGafgQ%3D#FAQ_1542

60

many public buildings/sites/national monuments worthy for conservation remain as most in the civic district, for example, have already been conserved and/or have been adapted for reuse, in most cases, by offices of different government agencies or public amenities like museums or art galleries. Others have been razed in the 1970-1980s or they are private properties.

In Hong Kong, however, PPP has, however, proven to work well since 2007-2008 when the government earmarked HK$1 billion (SG$200 million) to provide a platform for fostering public-private partnership through heritage conservation under the “Revitalizing Historic Buildings through Partnership Scheme.”

Included as part of the Revitalisation Scheme, non-governmental organizations are invited to submit proposals for suitable adaptive re-use to provide services or conduct business in the form of social enterprises. The proposals would be examined and assessed by a special team set up by the Commissioner for Heritage’s Office (CHO). In their applications, the applicants must provide detailed plans on how the historic buildings will be conserved and their historical significance brought out effectively, how they would be operated in order to achieve financial viability and how the local community will benefit.

In return and if approved, the government will provide financial support in the form of a one-off grant to cover the cost for major renovation to the building in part or in full, a nominal rental for the buildings; and a one-off grant capped at HK$5 million (SGD$0.85 million) to meet the starting costs and operating deficits of the social enterprises re-using the building for a maximum of the first two years of operation.

61

Apart from financial support, the CHO will also provide a one-stop advisory service for successful applicants to take forward their proposals in the areas of heritage conservation, land use and planning, building architecture, and compliance with the Buildings Ordinance. The immediate interests in the scheme were reflected in the “first batch” submission in 2008 when 113 proposals from non-profit making organizations were received. Seven historic buildings were eventually selected or implementation. 40 One of the these would be the Central Police Station (CPS) compound, designed by Herzog & de Meuron with its local partner, Rocco Design Architects Limited (See Case Study 3 in the Appendix).

Figure 13 | Various pictures taken of the conservation before and after Source: Conserve and Revitalize Hong Kong Heritage

40

These seven historic buildings are Old Tai Po Police Station, Lui Seng Chun, Lai Chi Kok Hospital, North Kowloon Magistracy, Fong Yuen Study Hall and Mei Ho House.

62

By 2021, the PPP scheme in Hong Kong has undergone six runs or “batches”; each batch consisted of different number of projects each year. Aside from the CPS Compound, another project to have come under the scheme would be the Blue House Cluster project in mid-2009. Accepted under Batch II of the Revitalisation Scheme, the Blue House Cluster comprises of three tenement buildings, i.e., the Blue House, the Yellow House and the Orange House. These were constructed from the 1920s to the 1950s. The compound has been revitalised into Viva Blue House, a multi-functional complex providing residential accommodation and various kinds of services to the local community. For this project, the government has provided a subsidy of HK$4.17 million (SG$750K) at a capital cost of HK$56.91 million (SG$10 million). The completed project would, in 2017, receive the Award of Excellence of UNESCO Asia-Pacific Awards for Cultural Heritage Conservation.

Figure 14 | The Blue House, the Yellow House and the Orange House Source: Conserve and Revitalize Hong Kong Heritage

The conservation of cultural heritage requires the involvement of multiple actors from across the public, private, and non-government sectors, both to carry out conservation work and to sustain the heritage place in the long term. Conservation of the historic urban

63

environment is particularly cha Singapore’s public investment in incentives for historic heritage compares unfavourably with that of many countries, particularly in North America and Europe. Challenging as conservation actions must be embedded within wider economic, social, and environmental development strategies. Increasingly, the private and nongovernment sectors are playing pivotal roles in urban heritage conservation through publicprivate partnership mechanisms. As in the case of Hong Kong, one sees the underlying concepts of PPP and how they have been used to create successful heritage conservation outcomes.

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4

CONCLUSION

One of the limitations of this dissertation is that due to time constraint, it cannot make claim to comprehensively cover all the possible incentives/programs to fund conservation projects. Indeed, the programs represented are merely a fraction of the programs implemented worldwide. It does, however, represent a significant cross-sample of the various tax benefits, grant and loan subsidies, and public-private partnerships sponsored by governmental bodies that assist privately owned heritage properties. When viewed in total, this study could be a starting point for future research as well as a guide to possible incentivizing programs indigenously modified to suit the locations where they may not be currently in place.

There are a few observations from the different incentive programs discussed.

In the true sense of the word, Singapore has essentially just one primary tax incentive for conservation, i.e., the program operated by the National Heritage Board. The incentive is, however, for the donors as a one-off tax deduction from their personal income taxes. The government matches the fund donated; unfortunately, the tax-deductible donations are for monuments of national significance; a large proportion of which are places of worship.

When analysed with incentives for conservation in Hong Kong as a comparison, where various financial incentive sources and tools have been employed — incentives in Singapore lack vibrancy or determination. While URA imposes conservation guidelines, without incentives, it is difficult to strictly enforce them or motivate owners to do better. Hence, one sees the many disappointing conservation projects in Singapore that tend to incline to be

65

developers’ economic responses on how conservation could be done as quickly (an often time, as economically as possible). Indeed, as poet Arthur Yap has put it: “there is no future in nostalgia in Singapore.”41

Often forgotten is the understanding that the different incentivizing policies and programs a nation chooses to implement say much on how much it really values its past, which aspect of its own history it chooses to remember, and sometimes, which to erase. The role that incentives play in heritage conservation policies speak directly to the idea of social values, as incentivizing a behaviour is the clearest possible social method of recognizing its worth.

In Singapore, the lack of much enthusiasm or eagerness to provide conservation incentives reaffirms what Rem Koolhaas said of the city-state as “represents the truly generic condition of the contemporary city (whereby) history has been almost completely blotted out … nothing more or less than the co-existence of a number of apparently unconnected buildings which, by the simple fact of proximity, form an urban conditions…”42 As it is, many architects in Singapore would readily agree that perhaps, meaningful conservation efforts of Singapore’s architectural heritage may simply be too little, too late.43

The divergent modes of governmental spending on conservation in some countries provide insights into the beliefs, values, and economic precepts that inform the society. In

Arthur Yap, “There is no future for Nostalgia” in The Space for City Trees: Selected Poems. London: Skoob Books Ltd, 2000, p.59.

42 Rem Koolhaas, Stefano Boeri, Stanford Kwinler, et. Al. Mutations. Barcelona: ACTAR/Arc en Rive Centre d’architecture, 2000).

43 Anthony M. Tung, Preserving the World’s Great Cities: The Destruction and Renewal of the Historic Metropolis. New York: Three Rivers Press, 2001, p.189.

41

66

Singapore, one observes that many “incentivizing” programs inevitably centre around the bonus GFA carrot and/or a reduction in DC tax payable. This approach is indicative of an economic driven mindset, which is not reflective of the fact that conservation cannot be a oneoff process nor is it a “special event.”

All heritage properties require maintenance on an ongoing basis for their entire lifecycle.

Whatever incentives are offered in Singapore, be they planning or economic-related, they certainly don’t go beyond what would happen after the “special event” has ended. Instead, many times, they are left to market forces to fend for themselves thereafter.

A parallel observation can be made in countries where incentives consist primarily of tax policies, which are predictable with ongoing, as-of-right measures integrated with the nation’s law. This is compared with countries that primarily facilitate private heritage property conservation through grant programs, which are more variable and give governing bodies greater control over what resources deserve to be conserved.

Similar to the need for long term maintenance, another lesson is that after spending on conserving and adapting a building for reuse, few incentives are available to thereafter monitor and control how different activities are permissible which unwittingly incentivized neglect.

One can see this in Singapore Chinatown with the increasing number of unplanned and adhoc tenants - including night-clubs, shops selling cheap souvenirs and tattoo parlours. Such lack of control is a financial disincentive to private investment in heritage properties.

67

It would be interesting to see how the Blue House in Hong Kong which has been adapted for reuse as affordable housing would be managed and maintained in the future. Such adaptive reuses generate very low income and without continued financial incentives, this could undermine the ability and desire of landlords to responsibly care for and improve their property.

While it is a logical and justified formula to allocate funds when they do become available on the heritage that are judged to be more significant, the highest profile

Figure 15 | The relationship of Cost versus Value for Shophouses in Singapore Source: URA, Square Foot Research

that would yield the greatest public benefit, the continued deferral of necessary incentives to conserve privately owned heritage properties may result over time in severe permanent damages. This pattern may not be clear in Singapore – for example -- in the conservation of the many shophouses because as explained earlier, even without incentivizing mechanisms and programs in place to finance conservation efforts and to encourage investment in heritage, the economic gap of value versus cost remains very narrow, i.e., the land value by far exceeds the conservation costs, and this has motivated owners/developers to continue to conserve their properties for the time being.

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Figure 16 | Comparison by Investment in Incentives 2001-2002 Source: National Incentives Taskforce for the Environment Protection and Heritage Council, 2004.

Singapore’s public investment in incentives for heritage conservation compares unfavourably with that of many countries, particularly in North America and Western Europe.

Precise comparison of public investment in heritage incentives in different countries is, of course, difficult because of differing financial aid arrangements and differing public sector structures generally. However, some valid comparisons can be made, when population, government budgets, and the size of heritage inventories are taken account of.

69

Within an overall public policy objective – planning/zoning incentives are often ad hoc or designed for a particular project – on a case-by-case basis instead of being a part of an implementation strategy for an overall public policy objective. Even the recently passed Land Betterment Charge Bill selectively benefits a few and definitely not the smaller privately owned heritage properties. Incentives should be provided as long as the outcome for the heritage building would be positively enhanced, better maintained and actually restored; these are the only criteria that should prevail. Instead, often, the authority is suspicious that the property owner/developer is seeking for some unjustifiable reward/ opportunity, forgetting that the owner of a heritage building (once gazetted) has limited development opportunities, higher than usual maintenance costs because of the rare trades and materials required, a prohibition against demolition and generally more constraints than the owner of a non-heritage listed property has to bear.

Where urban redevelopment pressure is intense as in Singapore, TDR allows owners of listed heritage buildings to sell air space above their non-demolishable heritage buildings could be something to explore further. In return for substantial sums of money -- as long as before receiving the offset reward, the subject heritage building must be conserved -- what is left over after that, can be claimed as a financial bonus. It is also a good way of recognising that owners of heritage buildings are to a certain extent penalised; it also shows that there is a happy medium in which a listed heritage building can be protected while receiving an incentive to conserve. That is essentially the quid pro quo.

In the United Kingdom and the United States, the incentives are by far more generous.

In the UK, there is the Heritage Lottery Fund which provides approximately 300 million

70

pounds into the heritage sector annually by way of grants and in the USA, there is the rehabilitation tax credit scheme. Since the 1970’s, the federal Rehabilitation Tax Credits programme has spurred the redevelopment of more than 40,000 historic buildings in the United States. Over US$100 billion (SG$135 billion) in qualified development costs have been associated with these projects, providing approximately US$20 billion (SG$27 billion) in tax credits for investors. Additionally, various studies such as Randall Mason (1998) and the World Bank (2012) indicate that increased activity in the cultural heritage sector create jobs, engage locals and incoming tourists with cultural neighbourhood-based activities and bring more people into a heritage precinct (thus increasing spending in such precincts).

In conclusion, heritage conservation incentives in Singapore are lacking and policies would need to be cast wider and more generously. As private owners absorb almost 100% of the costs when it comes to heritage places, the community which gets the benefit contributes very minimal. It is recommended that Singapore government should perhaps review more deeply about this and urgently revamp planning controls and policies to revitalize heritage incentives and allow more liberal and equitable incentives because of the benefits conservation brings.

*****

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BIBLIOGRAPHY

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Denning, S. Incentives for knowledge management. 2001.

Available online: http://www.stevedening.com/incentives_knowledge_management.html Earl. J. Building Conservation Philosophy. 3rd ed. Donhead: 2003, p.31.

Hahn, R. W., Stavins, R. N. “Economic incentives for environmental protection: Integrating theory and practice.” American Economic Review, 82(2), 1992, pp.464.

Haider, Donald. “Grants as a Tool of Public Policy,” in Beyond Privatization: The Tools of Government Action, ed. By Lester M. Salamon. Washington, D.C.: The Urban Institute Press, 1989, pp.93-124.

Mok, Gazalle. 2021. Interview by David Liauw. Singapore: June 18, 2021.

Gathered through 2 sessions of sit-down interviews with one of the three analysts of the passed Parliamentary Bill and to understand the document technicalities and how the Bill will in fact work. As an illustration, the dissertation will use the information gathered to simulate the possible saving in Development Charge for an imagined conservation project.

Ho, Norman, Chou Ching and Gazalle Mok. “Land Betterment Charge Bill Introduced to Replace Development Charge and Differential Premium.” Client Update: Rajah & Tann.

Singapore, May 2021.

Based on in-depth analysis of the Land Betterment Charge Bill including its financial and economic implications to private owners of conservation properties in Singapore as well as its short falls.

Kleiman, D. G., Reading, R. P., Miller, B. J., Clark, T. W., Scott, J. M., Robinson, J. “Improving the evaluation of conservation programs.” Conservation Biology, 2000, 14(2), pp.356–365.

Kohtz, D. J. Improving tax incentives for historic preservation. Texas Law Review, 90(4), 2012, pp.1041–1064.

Leong, Grace. “Shophouses sales hit $1b, surpassing 2019 and 2020 levels.” Singapore: The Straits Times, 21 August 2021.

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Licciardi, Guido & Rana Amirtahmasebi, eds. The Economics of Uniqueness: Investing in historic city cores and cultural heritage assets for sustainable development. Washington D.C.: The World Bank, 2012.

Mason, Randall. “Economics & Heritage Conservation: Concepts, Values, and Agendas for Research.” Economics and Heritage Conservation. A Meeting Organized by the Getty Conservation Institute. Los Angeles: The Getty Conservation Institute, 1999, pp.2-18. Also available: https://www.getty.edu/conservation/publications_resources/pdf_publications/pdf/econrpt.pdf Morris, Marya. Innovative Tools for Historic Preservation. Planning Advisory Service Report No. 438. Chicago: American Planning Association, 1993.

This Report looks at options for US states and local governments to encourage or enforce heritage preservation. It considers a variety of approaches (state and local tax relief.

Conservation districts, down-zoning and comprehensive plans) with example of various US cities.

Ng Jun Sen. “Conserving historic Singapore buildings raises value of nearby homes, but could also cause gentrification: Study,” Today: Singapore, 25 December 2019.

Peacock, Alan. “A Future for the Past: The Political Economy of Heritage.” Proceedings of the British Academy. 1995, pp.87:189–243.

Pickerill, Tracy and Pickard, R. “A review of fiscal measures to benefit heritage conservation,” RICS Research Paper Series, Vol. 7, No. 6, 2007.

Roddewig, R. J. Economic incentives for historic preservation. Washington, DC.: National Trust for Historic Preservation, Centre for Preservation Policy Studies, 1987.

Rypkema, Donovan, Caroline Cheong and Randall Mason. Measuring Economic Impacts of Historic Preservation: A Report to the Advisory Council on Historic Preservation.

PlaceEconomics: November 2011.

Also available: https://www.achp.gov/sites/default/files/guidance/201806/Economic%20Impacts%20v5-FINAL.pdf The article provides good discussion of the types of incentives needed, financing and costcutting incentives, and finance assistance.

Rypkema, Donovan. “Heritage Conservation and the Local Economy.” Global Urban Development Magazine: Volume 4, Issue 1, August 2008.

Also available: https://www.globalurban.org/GUDMag08Vol4Iss1/Rypkema.htm Salmon, Lester, ed., Beyond Privatization: The Tools of Government Action (Washington, D.C.: The Urban Institute Press, 1989; and Christopher C. Hood, The Tools of Government.

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mechanisms (such as administrative feasibility, effectiveness, political support, efficiency and equity).

Schuster, Mark J., “Inciting Preservation.” Paper presented at the Salzburg Seminar, December 1996, pp.49-80.

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Throsby, David. The Economics of Cultural Policy. Singapore: Cambridge University Press, 2015.

Throsby, David, “Seven Questions in the Economics of Cultural Heritage.” Michael Hutter and Ilde Rizzo eds. Economic Perspectives on Cultural Heritage. New York: Palgrave Macmillan, 1997.

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Yu, Michael, Built Heritage Conservation Policy in Selected Places. (Hong Kong: Research and Library Service, Division Legislative Council Secretariat, 18 July 2008. Also available: https://www.legco.gov.hk/yr07-08/english/sec/library/0708rp10-e.pdf This paper explores the various incentives for conservation efforts in Hong Kong, Macau and Australia. Importantly, it highlights how public opinions and actions have shifted the course of policy development on conservation; policies that are more consistent to public interests and engagement.

“Leon Perera on Land Betterment Charge Bill”. Channel News Asia: 10 May 2021.

Video available: https://www.channelnewsasia.com/news/parliament/videos/may/leonperera-on-land-betterment-charge-bill14781706?fbclid=IwAR1N51XsdswdG1NLFVMzV_2m5OGVDhhcIRzw6wDLv_2Kaui5gP 3apuGalbo Land Betterment Bill is to return a portion of economic benefits from land development to the community. In the video, Mr Perera -- a Singapore politician, a member of the Workers’ Party and Member of Parliament of Aljunied GRC in Singapore since July 2020 – queried how this would be achieved, how funds collected would be allocated. Aside 75

from infrastructural works, Mr Perera also sought clarifications on whether the concessionary relief would also benefit conservation works such as the Golden Mile Complex.

“Edwin Tong responds to clarifications sought on Land Betterment Charge Bill”. Channel News Asia: 10 May 2021.

Video available: https://www.channelnewsasia.com/news/parliament/videos/may/edwintong-responds-to-clarifications-sought-on-land-betterment-14781838 Mr Tong is the 2nd Minister of Law. The Bill was subsequently passed in Parliament.

“Making heritage happen Incentives and Policy Tools for Conserving Our Historic Heritage,” Adelaide, Australia: National Incentives Taskforce for the Environment Protection and Heritage Council, April 2004.

Available online at: https://sg01.l.antigena.com/l/ESaz7kIUvmI64mtnFpbk6Y2fi3ktIqDTaqeqQ5g1lChqLzFkCP EkR8Dim~94bI0uuDDDwNoNsH6zCnA4RNfXwhwlCrruUiAL0Vvn0iCBgFKnflpAOnhMR3~xgAwYWNBNmLwlBZhYznYbeQCXuSCKLwt14sCyMGWvcGgRICOKEcGE8ehT5T9ImzOY99U6DupijSsRvKrmopOQRMsMcvA-gKNMuRa8s5uCRsc-NM0PJq265ly

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LIST OF ILLUSTRATIONS

Conserve and Revitalize Hong Kong Heritage Department of City Planning: City of New York devb.gov.hk DP Architects Pte Ltd Archive Heritagefund.org.uk National Incentives Taskforce for the Environment Protection and Heritage Council nbh.gov.sg Ricemedia.co South China Post ScienceDirect.com Square Foot Research taikwun.hk/en/visit/map_directory timeout.com URA Archive zolimacitymag.com

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APPENDICES

CASE STUDY 1 GOLDEN MILE COMPLEX - DIFFERIENTIAL PREMIUM TABULATION

Assumptions: 1. No Change in Site Area, GPR = 5.6 2. DP Payable of existing GFA on enhancement of usage based on prevailing D.C. Rates 3. DP exemption is based on 10% of DP Payable.

Existing Value (48 years)

Residential/Serviced Apartments Retail/Office

Existing GFA (99 years) 21,965.0 34,686.0 56,651.0

DC Rate (Sept 2020) (in SG$) 9,100 9,800

31,180.0 22,006.0 22,201.0 75,387.0

9,100 10,430 9,800

In SG$

199,881,500.00 339,922,800.00 397,295,964.80

Existing Value (48 years, 73.6%) OPTION 1 Residential/Serviced Apartments Hotel Retail/Office DP (48 years/73.6%) DP Payable (Remaining 48 years) Topping up of Lease Residential/Serviced Apartments Hotel Retail/Office

537,891,159.68 140,595,194.88 31,180.0 22,006.0 22,201.0 75,387.0

Land Value 13,000 14,900 14,000

Total Land Value Topping up of Lease (51 years) Total DP 10% D.C. Exemption DP Payable OPTION 2 Residential/Serviced Apartments

283,738,000.00 229,522,580.00 217,569,800.00

405,340,000.00 327,889,400.00 310,814,000.00 1,044,043,400.

00 233,865,721.60 374,460,916.38 37,446,091.65 337,014,824.83

26,444.00

9,100

240,640,400.00 79

Hotel Retail/Office DP (48 years, 73.6%) DP Payable (48 years) Topping up of Lease Residential/Serviced Apartments Hotel Retail/Office

26,742.00 22,201.00 75,387.00

10,430 9,800

542,527,135.36 231,713,135.36 26,444.00 26,742.00 22,201.00 75,387.00

Land Value 13,000 14,900 14,000

Total DP Topping up of Lease (51 years) Total DP 10% D.C. Exemption DP Payable OPTION 3 Residential/Serviced Apartments Retail/Office DP (48 years, 73.6%) DP Payable (Remaining 48 years) Topping up of Lease Residential/Serviced Apartments Retail/Office

278,919,060.00 217,569,800.00

343,772,000.00 398,455,800.00 310,814,000.00 1,053,041,800.

00 235,881,363.20 467,594,498.56 46,759,449.86 420,835,048.70

34,450.00 40,937.00 75,387.00

9,100 9,800

313,495,000.00 401,182,600.00 526,002,713.00 215,188,713.60

34,450.00 40,937.00 75,387.00

Total Land Value Topping up of Lease (51 years) Total DP 10% D.C. Exemption DP Payable

Land Value 13,000 14,000

447,850,000.00 573,118,000.00 1,020,968,000.

00 228,696,832.00 443,885,545.60 44,388,554.56 399,496,991.04

Assumptions subjected to site constraints, authority approval, further verification and coordination.

Structure, Layout, Area and Efficiency are subjected to site verification by certified surveyor. {Planning parameters are subjected to URA’s confirmation and approval Proposal is subjected to FSSD consultation and based on the demolition/removal of the petrol station (lease due 2020).

Figure 17 | Differential Premium Tabulation Simulation

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CASE STUDY 2 SDI SCHEME | SINGAPORE POWER BUILDING/111 SOMERSET, SINGAPORE

The winner of an architectural competition in 1971, the SP Building was the headquarters of the Public Utilities Board (PUB). Situated between Somerset Road and Devonshire Road, the H-shaped development consists of 2 different blocks with the central service core and a naturally ventilated lift. The overall building tapers from cantilevered upper floors to deeply recessed lower floors with extensive vertical fins serving as a vital part of the building articulation as well as sun-shading devices.

Its structural framework utilizes a simple system of reinforced concrete beams and slabs. The wall and the columns of the façade were covered with mosaic and ceramic tiles.

The columns with ventilated public lobby areas distinctly expressed at the base of the building, providing a lofty and airy feel.

On its own, the building’s brutalism-style “stands as a testament to the confidence of institutional clients towards local talent…” 44 The Public Utilities Board continued to occupy this building as its offices with several renovation exercises whereby the façade was cladded over with aluminum panels, the latter due largely to growing concern by the Building Construction Authority (BCA) that in other developments, some of the ceramic tiles on the façade were showing sign of debonding and falling onto the streets below.

In 2008, the building was eventually sold to YTL Pacific Star and underwent another extensive renovation exercise for the lower floors where the lobby areas were converted into retail spaces. It was at that time that the open-to-the sky basement carpark was covered over and converted into a pedestrian mall. Many of the existing tileworks were also permanently removed as the building was structurally strengthened to meet code requirements at that time.

In 2018, the usage of the building was further enhanced with the addition of medical offices (on the upper floors) and the retail spaces (on the lower podium floors). Along Somerset 44

Wong Yunn Chii, Singapore 1:1 City A Gallery of Architecture & Urban Design, Singapore: Urban Redevelopment Authority, 2005, p.59.

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Road, the public foyer is today completely internalized into retail spaces and much of the coffered ceiling have been covered over.

In 2019/2020, the building was purchased by the Hong Kong-based developer, the Shun Tak Group. When URA was approached for the redevelopment of the property under the SDI scheme, URA requested the facade fronting Somerset Road to be reverted to as close as possible to its original design intent including the lofty and airy foyer space, the iconic cofferdam ceiling, etc.

Figure 18 | Aerial Views

Source: URA Archive Source: URA Archive

After further negotiations and recognizing some of the limitations, URA was willing to waive the requirement of reopening the basement car park (as the current situation allows for a wider pedestrian network) as well as the putting the mosaic tiles back on the façade of the building that have deboned or removed due to structural strengthening exercise completed many years ago.

In additional to paying for the conservation cost, the developer has also agreed to provide a landscape public garden to the community which will strengthen the pedestrian link between the popular SkateSports @Somerset Skate Park and the MRT station and SCAPE. In return for these efforts, URA offered an incentive of up to 30% in additional gross floor area, the site to re-zone for partial residential use and an increase in building height of up to 10-

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storey which the developer intends to use for a new residential tower along Devonshire Road.

FORMER PUB BUILDING | 111 SOMERSET ROAD Airy Foyer space and integrated art work, different floor levels and geometric spaces framing views

Figure 19 | Various Photos

Source: DP Architects Pte Ltd

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CASE STUDY 3 PPP | THE CENTRAL POLICE STATION COMPOUND, HONG KONG

Figure 20 | The Central Police Station (CPS) compound

Source: https://www.devb.gov.hk/

The Central Police Station (CPS) compound comprises the former Central Police Station, Central Magistracy and Victoria Prison. They were declared as monuments in 1995. The oldest structure within the CPS compound was built in 1864; a three-storey barrack block constructed adjacent to Victoria Prison. A storey was later added to the block in 1905. Other blocks were added between 1910 and 1925. In 1919, Headquarters Block facing Hollywood Road was constructed. Subsequently, in 1925, the two-storey Stable Block was constructed at the north-west end of the parade ground and later used as an armoury.

In the afternoon of December 15, 1941, during the Battle of Hong Kong, Japanese bombs destroyed the ground floor and the basement offices of the Police Headquarters with casualties. This would mark the beginning of a systematic bombardment of the Hong Kong by the Japanese that followed. After World War II, the importance of the CPS compound declined when a new police headquarters was built in Wan Chai but it continued to function as a police station, dormitory, and prison until the 2000s.

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In April 2007, the Hong Kong Jockey Club (HKJC) submitted a conceptual proposal of revitalising the CPS Compound to Government. The HKJC also proposed a donation to support the capital cost for renovation and development of the CPS Compound as well as meeting the management and maintenance cost and the operational deficits.

Government's acceptance in principle of the HKJC's proposal for revitalising the CPS Compound was announced in the 2007-08 Policy Address in October 2007. Subsequently, the HKJC conducted a six-month public engagement exercise from October 2007 to April 2008 to engage stakeholders through various channels and activities. During the public engagement exercise, the proposed new structure to house various performance and arts venues as well as its height and design attracted considerable discussion and quite diverse views. While some welcomed the conceptual design, others considered it too overwhelming and not in harmony with the surrounding environment.

In July 2008, the Hong Kong Government entered into a partnership with the HKJC to take forward the project with the objective of achieving both conservation and revitalisation of this highly important heritage site and taking the opportunity to showcase in Hong Kong how new and sustainable uses can be integrated creatively into a historic site whilst preserving its overall historic and architectural significance.

In October 2010, the HKJC announced the revised design of the project. This revised design includes preservation of 16 historic buildings in the CPS Compound, and the addition of two new buildings, namely the JC Cube and JC Contemporary which would be used as an auditorium and an art gallery respectively. Construction works commenced in November 2011. The revitalised CPS Compound operates as Tai Kwun – Centre for Heritage and Arts, and is open to the public in phases starting from May 2018.

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Figure 21 | The Central Police Station (CPS) compound Source: www.taikwun.hk/en/visit/map_directory

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