Housing in Singapore

Housing in Singapore Done by: Benjamin Lim Isaac Kuan Song Ze Shi Yuan

Housing in the early years of Singapore In the 1950s and the early part of the 1960s, many people (in 1959, 300 000 were living in shanty huts) were still living in unhealthy, unsafe and overcrowded slums (some shophouses meant for two families ended up with up to 50 people living in them). Others lived in these were often cluttered and had very little utilities and no service facilities i.e. schools. These slums were also potential fire hazards,as illustrated by the Bukit Ho Swee fire in 1961, which destroyed 2200 shanty houses and made 16000 homeless.

Housing in the early years of Singapore Previously, the Singapore Improvement Trust (SIT) had been set up to help build houses to house the growing population. However, the SIT had limited powers,e.g. it had to go through a slow process to acquire land, and it only mangaged to build 23,000 flats in 32 years. To overcome these problems, the Housing Development Board (HDB)was set up. The aim of which was to provide quality yet affordable housing for Singaporeans.

Public Housing Today 46 years after HDB was established, 900,000 flats across Singapore, which house 85% of Singaporeans. One and two room flats for lower income families Studio Apartments for the elderly three and four room flats for the middle income five room and Executive flats for higher income households

Public Housing Today Nine in 10 Singaporeans own their own homes, compared to less than 10% 40 years ago probably the highest home ownership rate in the world.

Public Housing Today To keep pace with Singapore’s development, HDB has improved the quality of public housing over the years. New HDB precincts today are built with landscaped greenery, multi-storey car parks, playgrounds and fitness corners. There is easy access to MRT stations, neighbourhood shopping centres, schools, and recreational and entertainment facilities.

Public Housing Today Older estates are constantly upgraded so that residents in these estates are not left behind, and they too can enjoy facilities comparable to those in our newer estates. We are currently in the midst of a massive nation-wide programme to retrofit HDB blocks with lifts that stop on every floor. This is to serve the needs of a rapidly ageing population.

Solutions to the housing problem Housing Development Board (HDB) The Housing Development Board was set up in 1960 to tackle the housing problem, replacing the SIT. The HDB embarked on a massive building programme and within 5 years, had built 54,000 flats, exceeding its own target of 50,000 flats. After the HDB decided the housing shortage had eased, Singaporeans were encouraged to buy their flats, to give them a stake in the country and as a way to encourage them to take better care of their flats (since people are more likely to take better care of what the feel is their own).

Policies Funds for flats HDB is supported by public funds but also acts like a private developer so also earns money from selling its flats. Thus, it does not have to compete as much for its budget with other sectors of the government. Any deficit will be subsidized by the government. However, the prices for its flats are controlled so they are not out of the reach of the majority of the population. The HDB is also given extensive powers of land acquisition and resettlement. The HDB also plans new towns which are self contained and include social, religious and recreational facilities as well as transport to other areas via MRT and buses. The HDB also manages car parks and commercial premises, which help generate income for it to finance the construction of flats. The government can also make use of CPF to invest in government bonds which help finance public housing. Thus, the government does not need to borrow money from banks which charge higher interest rates.

Policies Let us analyse this part by part. HDB also profits from sales, means that it is more 'self-sustaining‘, and able to provide adequate housing for the public even when other government spending is high Controlled prices shows that the government is aware of the public's financial condition. Utilising CPF to finance public housing also allows for a more consistent flow of money into the HDB so they can meet the needs of people.

Policies Land Acquisition for flats The government has the power of compulsory land acquisition and at first, compensated according to a fixed rate based on the current land use (ignoring any future potential value of it). Thus, this curbs speculation and the government does not have to spend excessively to buy over land. In 1995, it started compensating based on the current market value as it already had enough land.

Policies By curbing speculation, the government can control the prices of the land (prevent it from becoming too high), and this ensures that it always has enough money to buy land to provide the general population with housing. The fact that this was eventually removed shows that the government was not doing this merely for its own profit.

Policies Cost-Effective Design HDB is also able to have a low production cost as the flats are of similar design and are on a large scale. The construction also uses the latest prefabrication techniques and the flats are designed to require minimal maintenance. The HDB also produces the building materials required ensuring there is always an adequate supply. In addition, the HDB even has facilities to provide training for workers.

Policies By using such techniques, the government is able to keep production prices down, meaning that the units are cheap, good for low income groups. This shows that the government is trying to take care of the people's welfare.

Policies Use of CPF for home ownership The government also encourages home ownership by allowing workers to use their CPF, providing loans, exempting the need for downpayment and even offering concessions to low income families. Allowing workers to use CPF to pay their installments means they can buy a flat and still suffer no reduction in take-home pay. This helps care for the welfare of the low income families.

Policies Reselling flats Home owners are also allowed to resell their flats once with no government interference. This allows them to upgrade and also means the flat can be seen as an investment. This allows people with small flats to upgrade easily.

Policies 99 Year Lease When buying a house, it is only a 99 year lease, meaning the government still retains control of the land and can redevelop and resettle if needed. Although this may not be very popular since it means that the house cannot be kept indefinitely, the government still does this so that they are able to keep redeveloping Singapore, if needed, to keep up with the competition.

Policies Home Protection Scheme People paying loans through CPF have to be insured so that if they suffer a premature death before the age of 65, there wouldn't be a huge burden on the family to pay back the loan, especially if he was the sole breadwinner. This puts less stress on families, especially on low income families, showing the government’s concern for the people’s welfare.

Policies Conditions to be eligible to buy HDB flats The government however, has strict conditions for buying a HDB flat. These are that the buyer must be a Singapore citizen, over 21 and be in what it terns a family nucleus i.e. married/ divorced with children in legal custody/ applying with parents. In addition, you cannot apply for too small a flat if you are above a certain income e.g. a buyer's gross monthly household income must not be more than $2,000 if he is buying a two room flat. The buyer or the people in his family nucleus also cannot own property within 30 months before the application.

Policies Let us look at this in parts: The buyer must be a Singaporean, this is so that the government ensure that the Singapore Citizens are the ones getting the houses, not foreigners. The buyer must have a family nucleus, so that the ratio of people to the number of flats is high enough, i.e. the government is trying to house more people per apartment, and is encouraging formation of nuclear families which are more stable. Also, the restriction on the type of apartment if you are above a certain income is because the government wants to keep the cheapest apartments for the poorer people, so that they can afford it. The last is probably so that people do not have several houses, since they already have places to stay, so the HDB flat can be given to those who are more in need of it.

Recent HDB policies Home Improvement Programme (HIP) Flats which are built up to 1986 can be upgraded to fix maintenance problems associated with aging flats. These include replacing waste pipes, pipe sockets etc. Optional items are also available such as replacing toilets and entrance doors etc. but the residents must bear the cost of these. Clearly, this is to help improve the living conditions of the aging flats, showing that the government is concerned about the public welfare. The optional items are designated as such since they are non-essential, and the money saved by the government could go into other developmental projects.

Recent HDB policies Neighbourhood Renewal Programme (NRP) In contrast to the HIP, the NRP upgrades the common areas of HDB estates such as letterboxes, repainting, playgrounds, drop-off porches etc. Residents can chose which items they do not want. Selective En bloc Redevelopment Scheme Older flats built up to 1989 and which have not undergone upgrading can, if majority of residents agree to, be demolished and rebuilt. The residents are given priority to nearby flats at subsidised rates and compensated.

Recent HDB policies Both of these help with improving general living conditions in the HDB flats as well, as well as the public facilities around it. It also gives the residents more of a say in things, hence also encouraging more community involvement, which is somewhat lacking in Singapore. However the en bloc does have some problems, since a minority of people who would not want their flats to be demolished may not be happy with the arrangements.

Recent HDB policies Ethnic Integration Policy (EIP) The EIP was implemented in 1989 to promote racial harmony in HDB estates by preventing the formation of racial enclaves. Under the EIP, Chinese, Malays, Indians and Eurasians in Singapore each have a representative quota of homes for them in a housing block or neighbourhood. Once that limit has been reached, no further sale of HDB flats to that ethnic group will be allowed. By providing HDB residents of different races with more opportunities to interact, the EIP fosters ethnic tolerance and understanding, and strengthens our social cohesion and national unity.

Recent HDB policies Ethnic IntegrationPolicy (EIP) for HDB estates This policy has been quite heavily debated especially because it can be said to be racial discrimination. Because of the racial quota, a person of a minority race has to sell to a member of a similar race. (Take note that there is no restriction on the sale as long as the overall quota is not exceeded). Thus, this may make it hard to find a buyer as being a minority, there will be less eligible buyers. This can repress the property price. However, it is true that the colonial style of housing with each race given its designated area would lead to very minimal contact between races and thus increase the likelihood of misunderstanding. While a person living close to members of other races may not lead to him being friends with them (he may just ignore them), there is at least more chance for interaction. Given a history of racial unrest, it may be neccessary for some to suffer for the benefit of national stability.

HDB policies There have also been questions raised as to why this policy does not apply to private property. Firstly, it would be quite unfair since the government is the land owner of HDB flats so has a say in what the tenants (HDB flats are after all 99-year leases) of that land should be. The same cannot be aid of private property. Secondly, a large percentage of the population live in HDB flats anyway so there is no neccessity to apply the rule to private property.

Video http://www.youtube.com/watch?v=-VosvrTlw7c

Acknowledgements • http://en.wikipedia.org/wiki/Housing_and_Development_Board • http://www.hdb.gov.sg • http://www.housingbbs.com/sg/f80/40-years-History-of-Singapore-HDB-40-t-2556-1-1.html • http://en.wikipedia.org/wiki/Bukit_Ho_Swee_Fire • http://tcdc.undp.org/Sie/experiences/vol4/Public%20housing.pdf • http://www.cpf.gov.sg/cpf_info/benefits/famiprot/HomeProt.asp • http://www.mnd.gov.sg/newsroom/Speeches/speeches_2006_M_17082006.htm • http://www.mnd.gov.sg/newsroom/newsreleases/2009/news19012009_2.htm • http://74.125.153.132/search?q=cache:F-7zjtmd1XsJ:www.pl.sg/ShowBinary/BEA%2520Repository/Docs/doc_RH_Ethnic%2520Integration%2520Policy.doc+Ethnic+Integration+Policy+(EIP)&cd=3&hl=en&ct=clnk&gl=sg&client=firefox-a

Thank You! Any questions?

Housing in Singapore