A REVISIT ON THE ROLES OF SINGAPORE DEVELOPMENT CHARGE SYSTEM

Abstract

This study intends to revisit the roles of the Development Charge (DC) system in Singapore. Development charge is levied on developments that obtain planning permission above the existing permitted use and intensity. It is a form of betterment levy to recover the unearned increment from the land owners, to redistribute the benefits in the form of improvements for infrastructure or other community developments. With particular focus on recent redevelopment activities and the 18th July 2007 DC hike in quantum of enhanced value to be creamed off, the author uses a two pronged approach in re-assessing the roles of development charge as a policy instrument of development control. Through conducting interviews to read market sentiments and perceptions of the development system and statistical studies to quantify the congruency of the fixed rates development charges to market conditions, the study provided deeper understanding on the efficacy of development charge system in reflecting market value for land and at the same time serve its role in development control. There are notable evidence that the development charge system is lacking in providing a stronger impact on development control. The inadequacy of the charges in recovering the betterments in land value during the buoyant market in the recent years is also highlighted in the study.