How Singapore Solved Housing - YouTube

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For most of the world, the term ‘public housing’ conjures a clear mental picture:

At best, it means uninspired rows of the same drab concrete boxes.

The Soviet-era, copy-and-pasted ‘Urban Hell’.

That, or the poor, run-down, crime-infested ‘bad’ neighborhood - the place those with

no other options end up.

For most of the world.

And then there’s Singapore.

There, public housing looks like this, this, and this.

Because 80% of the population lives in one of its one million public apartments, they

carry no social stigma and are enjoyed by the rich and poor alike.

The small island city-state has adopted such a unique set of policies that the usual measures

fail to accurately capture just how far ahead it is.

The ratio of median house price to income, for example, is the most common simple way

of comparing affordability.

It reveals how many years the average person would need to work to afford the average house

in their area.

Unfortunately, it’s based only on privately-sold properties - a reasonable standard for most

countries, but meaningless in Singapore.

It also neglects factors like the availability of loans, government subsidies, and national

savings funds - all of which help make public housing the obvious choice for most all Singaporeans.

Another misleading statistic is the homeownership rate - which would seem to make it only one

of many countries where ownership is near-universal.

Confusingly, this number is calculated based not on the number of adults who own a home,

but rather the share of homes occupied by their owner.

In other words, a hypothetical city where prices have risen to such completely unaffordable

levels that all adult children are forced to live with their parents would technically

have a 100% home ownership rate, seeing as every home would still be occupied by its

legal owner.

So, while Singapore does have a 90% home ownership rate, its true accomplishment is 90% flat,

neighborhood, and estate satisfaction while, at the same time, remaining affordable for

everyone.

Somehow, its leaders seem to have “solved” the problem of housing: That it can be affordable,

high-quality, or plentiful - but not all three.

The question, then, is: Can these policies be exported elsewhere?

Public housing was first introduced on the island with the creation of the Singapore

Improvement Trust under British rule in 1927.

The SIT was an attempt to solve the city’s growing problem of overcrowding.

The poor, at the time, mainly lived in unsanitary slums and high-density shophouses, where they

readily spread disease.

The situation was made even worse by Japan’s World War II invasion and occupation - during

which thousands of homes were destroyed and thousands more were haphazardly constructed.

When Singapore finally gained self-governance in 1959, just 9% lived in public apartments.

While the population had grown rapidly - from 250,000 in 1907, to 567,000 in 1931, and nearly

a million by 1947, housing had lagged behind.

An already-dense 9.7 people per building had become 18 in that same period.

By almost every measure, the SIT had failed.

Major changes were needed, and fast.

Just weeks after assuming power, the newly formed People’s Action Party began replacing

it with the current Housing and Development Board.

While the new department clearly had its work cut out for it, in hindsight, this regulatory

‘blank slate’ was probably its biggest strength - allowing it to envision utopia

unhindered by the past.

It was also highly motivated.

Lee Kuan Yew, the nation’s first Prime Minister, considered the Founder of Singapore, wrote

that home ownership was the key to giving its population of immigrants a stake in the

country.

Because of this, the HDB was given an extraordinary degree of freedom - including a personal guarantee

that money would not be a problem.

It was exempted from building ordinance laws and mostly allowed to operate without approval

from other departments.

Immediately, it got to work.

The first priority was existential - solving the acute housing shortage by building as

much and as fast as possible.

Early flats were designed as emergency single-room units with the most barebones of amenities.

At the same time, using its almost infinitely-long leash, it began aggressively acquiring land.

In 1961, a massive fire broke out in a squatter settlement - prompting the government to pass

the Fire-Site Provision, which allowed it to acquire any land occupied by squatters

which was cleared by fire or natural disaster.

The fire and the government’s success in relocating the victims was held up as proof

of its efficacy, paving the way for future legislation.

3 Years later, another law was amended which enabled the state to reclaim land without

needing to compensate the affected seafront landowners.

Then, in 1966, the Land Acquisition Act took this trend to the extreme - authorizing the

acquisition of land by quote “any person, corporation, or statutory board for any work

or an undertaking which, in the opinion of the Minister, is of public benefit or of public

utility or in the public interest for any residential, commercial, or industrial purpose.”

Landowners could not object and compensation was then provided at below-market prices.

When it ran out of land to take, the state began reclaiming the sea - which makes up

about one-fifth of the country today, including the famous Marina Bay.

From 1960 to 2005, the percent of government-owned land grew from 44 to 90%.

And by the mid-1960s, hundreds of thousands had moved into government housing under the

leadership of the prolific Lim Kim San.

Naturally, there were a few snags along the transition from slums to high-rises.

Many residents had no idea how to budget for rent or electricity, while others simply found

life that high up unnatural.

Overall, though, the process was remarkably smooth and when Lim died in 2006, he was remembered

as the mastermind behind Singapore’s residential revolution.

In 1964, the HDB introduced the Home Ownership Scheme which today attracts international

attention and envy.

As of 2020, there are over one million public flats - mostly situated in 24 ‘new towns’

around the island.

Each is designed to self-contain around 1 to 200,000 people - with their own schools,

grocery stores, hospitals, gyms, and malls.

Most residents only need to leave for work - which is made easy by the attached MRT train

stations.

And although their coverage is extensive, areas without them are connected by smaller

light rail stations.

While this is functionally similar to estates in Hong Kong, where rows of high-rise apartments

surround a common area, mall, and train station, there’s one critical difference: Instead

of “walling-in” residents and preventing air circulation, new towns in Singapore are

arranged in a somewhat checkerboard-manner, with alternating tall and short buildings.

It’s not hard to guess in which estate residents feel happier, are less likely to vandalize,

and are prouder of their communities.

Another important feature of its apartment buildings are known as ‘Void Decks’ - One

floor, usually the first, is reserved as a communal space - for Malay weddings, Chinese

funeral wakes, polling stations, and other events.

The units themselves come in many shapes and sizes - from 1 to 5-room flats and everything

in-between.

There are even Executive Condos designed, built, and priced by private developers but

subsidized by the government at below-market prices, subject to the HDB’s restrictions.

The best apartments are nice enough to evade the usual ‘public housing’ connotation,

while the low-end is made affordable by a variety of government programs.

First, and most importantly, Singaporeans have no choice but to save their money.

All workers under 55 are required by law to contribute 20% of their wages, and their employers,

another 17%, to a social savings fund that can be withdrawn from only for a few specific

reasons - of which, buying a house is the most common.

In this way, and countless others, Singapore has completely removed housing from the free

market.

Prices are set based on one’s ability to pay, individuals can’t own more than one

public flat at a time, and although foreigners are not banned from buying, they’re required

to pay significant stamp duties.

The nature of housing is thus a place to live, not an investment.

Which is not to say homes aren’t assets - they do serve that role, just secondarily:

Owners of new subsidized flats are allowed to sell them at market rates after 5 years

of occupancy, usually to buyers who don’t want to wait the 3-4 years for new projects

to be completed.

Likewise, the elderly are encouraged to sell their flats and down-size.

One catch underlying all of this is hidden in the definition of ‘ownership’.

Here, that means 99-year leases.

For the most part, residents are free to buy, sell, and inherit property - with a few exceptions

- but the government is always and only the true ‘owner’.

None have yet expired, but as that date steadily approaches, the question of what happens next

looms large and could present a heated political challenge.

In the meantime, there’s a bright side to government ownership: it’s responsible for

maintaining, renovating, and even upgrading public apartments free of charge.

Of course, no system is without flaws.

There is always a concern that the same heavy-handed policies which make housing so effective will

be taken for granted by younger generations, or, worse, perceived as a form of social control.

Indeed, from the very beginning, Singapore has designed flats with the explicit intent

of shaping society.

A mild example is the arranging of different size units next to each other to create cohesion

between income-levels - 2-room units next to 3-room, 3, next to 4, and so on, while

1 and 3 room or 2 and 5 room mixing was said to create more division than unity.

More radically, to prevent earlier racial tension created by separate and disconnected

communities, public housing follows strict ethnic quotas.

As of 2016, its majority 74% Chinese residents could occupy no more than 84% of a neighborhood,

its 13% of Malays could occupy at most 22%, and its 12% of Indians could occupy, 12%.

Once an ethnicity has reached its quota, no more are allowed to buy a flat in that neighborhood

or block level.

In theory, this encourages a sense of unity and ensures different groups have close contact

by going to the same schools and shopping together.

Controversially, though, it also means, as a byproduct, buying or selling a flat may

be easier or harder based on your ethnicity.

Finally, subsidies heavily favor married families with children - so much so that locals joke

“Will you marry me?” has been replaced by “Can we buy a house together?”

In truth, housing policy was always just as much a means of modernizing - some would say

erasing - the culture of Singapore as it was about giving people a place to live.

Supporters argue the People’s Action Party has maintained its seven-decade monopoly on

power for obvious reasons - by all measures, HDB policies have had a monumental impact

on Singapore, and there is perhaps no issue more personally significant than where, with

who, and how well your family lives.

Cynics, in turn, counter that it’s no coincidence the party which meticulously designed Singapore

receives the vast majority of its votes.

To the extent that demographics, family structure, and geography determine voting preferences,

one could say, the People’s Action Party has a built-in advantage.

Naturally, this raises questions about transferability.

Setting aside the environment which enabled its housing to thrive - like its disproportionate

number of smart, charismatic leaders and its world-class transit system, Singapore’s

public housing is also inseparably linked to its unique brand of authoritarianism.

Where else, after all, would constituencies trust their government to acquire nearly all

land and to exert near-total control over where and how they live?

Even in other autocratic states with similarly absolute powers to the HDB, how could these

powers possibly be utilized for the benefit of the people, not merely hijacked for political

gain?

So, while there are certainly lessons to be learned, and, indeed some of its State-Owned

companies have been contracted abroad, it should be clear that its public housing is

more an idea than a method.

That despite how tempting it may be to selectively copy-and-paste from what appears to be a model

nation, doing so without the foundation of a strong, powerful, technocratic state, would

produce only a weak house soon to fall.

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