singapore's housing policies

Singapore’s Housing Policies …

Housing a nation : Holistic policies for affordable homes

Presented by : Aliaa M. Shamallakh

5/6/2015 Aliaa M. Shamallakh | IUG | Faculty of Engineering | Architecture Department

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Outlines …

1 • Singapore's profile …

2 • Housing policies and history in Singapore …

3 • Goals and principles of housing policies …

4 • Housing policies outcomes …

5 • Problems and challenges …


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Singapore’s Profile …

Name: Republic of Singapore.

Capital City : Singapore.

Type: Parliamentary Republic.

Founding : 1819.

Self-government : 1959.

Independence from UK: 1963.

Merge with Malaysia: 1963.

Expulsion from Malaysia 1965


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Location: Southeast Asia, it is a city-state and island country between Malaysia

and Indonesia.

Area: 718.3 km2 (projected to grow by another 100 km2 by 2030).

Climate: equatorial, a tropical rainforest climate; hot and humid.

Natural resources: Fish, deepwater ports.

Industries: Electronics, chemicals, financial services, oil drilling equipment,

petroleum refining, rubber processing and rubber products, ship repair, offshore

platform construction, life sciences, entrepot trade.

Currency: Singapore Dollar (S$, SGD)


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1960s Today

The “miracle” transformation: from 3rd world to 1st in one life time !


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Population

5.4 million

61.12 % Citizen

23%

Foreign born

38.88 %

permanent residents

The average household

size is 3.47 persons

Population density is

7,615/km2


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Ethnic Groups Chinese 77 % Malay 14 % Indian 8 %

Religions Buddhist Muslim Christian Hindu Sikh Taoist Confucianist


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Singapore has a highly developed market economy, based historically on

extended entrepôt trade. The Singaporean economy is known as one of the

freest, most innovative, most competitive, and most business-friendly.

Singapore is the 14th largest exporter and the 15th largest importer in the

world.

There are more than 7,000 multinational corporations from the United States,

Japan, and Europe in Singapore.

Roughly 44 % of the Singaporean workforce is made up of non-Singaporeans.


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Singapore ranked 5th on the Tax Justice.

Unemployment rate has not exceeded 4% in the past decade.

Singapore has the world's highest percentage of millionaires, with one out of

every six households having at least one million US dollars in disposable wealth.

This excludes property, businesses, and luxury goods, which if included would

increase the number of millionaires.

Acute poverty is rare in Singapore. The government has rejected the idea of a

generous welfare system, stating that each generation must earn and save

enough for its entire life cycle.


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Housing Policies …

Slums and living in (Kampongs) 1920s


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Shortage of Housing:

- Rapidly increasing population.

- Singapore Improvement Trust

(SIT) in 1927 provided affordable

public housing. It built only 23,000

housing units in its 32 years of

existence .


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14-storey block - Queenstown – Downson estate in 1956/ by SIT.


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Key institutions in Singapore’s housing system

Housing and Development Board

(HDB) - 1960

HDB town planning. Build as many low-cost housing units . sells subsidized public housing (99 year leasehold). Offer mortgages loans

Central Provident Fund (CPF) - 1968

Collects employees’ and employer contributions. 20% Employees, 13 % employers. Members can withdraw funds for approves purposes, including housing finance.

Commercial Banks, Finance Housing

Provides market interest rate mortgages to buyers. Make loans to private sector developers for construction and investments.


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Selegie House & Bukit Ho Swee estate by HDB (1962 – 1964)


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CPF Mobilization of Savings for Housing


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Housing Stock

(2009)

Owner occupied

unit Rental Units

Public-sector

884,000 units

78% 95% 5%

Dominance of HDB in housing

HDB began offering housing units for sale at below market prices, on 99-year

leasehold basis, under its Home Ownership Scheme (HOS). The HDB was able to

price its units below market prices mainly because HDB flats are built on state

owned land.


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Government Land Acquisition (GLA) -1966

More than 90% of the land in Singapore belongs to the state.

Land Acquisition Act (LAA) which permitted the state and its agencies to

acquire land for any public purpose or for any work which is of public benefit.

Government Land Sales (GLS): the government amalgamates land, inserts

infrastructure, provides planning and urban design guidelines, and releases the

land for sale to private (including foreign) developers.


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Resale Market Deregulation (1979 - early 1990s)

In 1971, a resale market was created when the HDB allowed owners who had

resided in their flats for a minimum of three years to sell their flats at market prices

to buyers of their choice who satisfied the HDB eligibility requirements for

homeownership.

The minimum occupancy period before resale was increased to five years in

1973 and has remained in place since.

The debarment period was abolished in 1979 thereby greatly facilitating

exchanges within the public housing sector.


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Resale Market Deregulation (1979 - early 1990s)

Only citizens, non-owners of any other residential property, households with a

minimum size of two persons with household incomes below the income ceiling

set by the HDB were eligible to purchase new or resale HDB flats prior to 1989.

In 1989, residential mobility was enhanced when the income ceiling restriction

was removed for HDB resale flats; the resale market was opened to permanent

residents as well as private property owners who had to owner-occupy their HDB

flat.

From 1991, single citizens above the age of 35 have been allowed to purchase

HDB resale flats for owner-occupancy.


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Housing Price

Inflation

Financial Liberalization

Resale Transaction

The transaction volume of

resale HDB flats increased from

fewer than 800 units in 1979, to

13000 units in 1987, 60000 units in

1999, and 31000 in 2004.

Loan financing prior to 1993

was based on 80% of 1984 HDB

new flat (posted) prices. In 1993

granting loan financing of up to

80% of current valuation or the

declared resale price of the flat


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transaction volume of resale HDB flats increased from

CBF Housing Grants Executive

Condominiums

Anti-speculation

measures

Shift from total reliance on

subsidies tied partial reliance

on subsidies tied to resale

flats.

$30000 to purchase a HDB

resale flat close to either

parents' or married child's

residence. And $40000 for

eligible households does not

need to satisfy this criterion.

a hybrid public-private

house type in 1995.

The government auctioned

the land off for the

development of EC units to

housing developers who are

responsible for design,

construction, pricing,

arrangements for financing

and estate management.

housing prices continued

to soar.

anti-speculation measures

included capital gains taxes

on the sale of any property

within three years of

purchase, stamp duty on

every sale and sub-sale of

property, limitation of

housing loans to 80 % of

property value, and limiting

foreigners to non S$

denominated housing loans.


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Goals & Principles …

1.Developing Vibrant Towns

Comprehensive Town Planning Rejuvenation/Upgrading

-Planning for Self-Sufficiency.

- Neighbourhood Concept .

- Concept of Hierarchy.

- Planning for Connectivity.

- Checkerboard Concept .

- Continually ensure that old

towns and developments do

not lag behind newer towns.

- Facilities are added, existing

ones being upgraded.

- Some areas would be re-

planned and redeveloped to

optimize land use.


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2. Providing Affordable Homes

Promoting Home Ownership in Singapore

Wide Range of Housing Choices

- Assisting Lower-Income Families.

-Promoting Family Ties .

- Giving Incentives to Singles

Living with Parents.

- Providing more Options for the

Elderly .

- Helping Singles.

- For All Pockets.

- For Different Life Stages.

- New Typologies


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New Typologies / Central Horizon in Toa Payoh


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New Typologies / Pinnacle@Duxton


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New Typologies / The Interlace (Private housing for upper-midieum income


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3. Cohesive Communities

Hardware Software Heartware

- Integrate the communities. - varying types of flats for households of different income and social profiles. - Open/void ground floor. - The Residents’ Committees (RCs) Centre. - Playgrounds, fitness corners and precinct pavilions. - Commercial and recreational facilities.

- Promoting extended family living. - Multi-Tier Family Housing Scheme. - Married Child Priority Scheme. - Third Child Priority Scheme . - Ethnic Integration Policy (EIP). This creates a balanced mix of residents from various ethnic groups.

- enhance the sense of belonging in HDB towns . - Instilling a stronger sense of ownership in residents. - Involve residents in the management of HDB estates. - participate in the decision making process. - Involved in shaping the physical environment. - forums, consultation, and regular surveys.


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Void Spaces’ activities (elderly care, meeting, parties, ..est.


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Policies’ Outcomes…

1. UNDER THE LEE KUAN YEW GOVERNMENT, 1959 – 1990:

Improvements in the urban environment and the standards of housing in

Singapore .

success of the economic development and housing strategy .

squatter settlements were cleared and entire neighborhoods and villages

were resettled in HDB new towns.

Increase in Savings Rate.

Increase in Quantity and Quality of Housing Stock.

Increase in Homeownership Rate.


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Development of Mortgage Market

Racial Integration

Impact on Economic Distribution

2. The Goh Chok Tong Government, 1990 – 2004:

The housing shortage problem was solved.

Housing policies under Goh Chok Tong’s term as the Prime Minister were

marked as market deregulation, “asset enhancement” and “upgrading” policies.


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3. The Lee Hsien Loong Government, from 2004:

Hold off increasing housing supply which subsequently led to a housing

shortage in 2010.

Elderly Households: Monetizing Housing Assets: the Lease Buyback Scheme

(LBS) in 2009 to allow the low income elderly (age 63 or older) living in 3-room or

smaller flats to unlock the equity in their homes.

Lower Income Households: Additional and Special Housing Grants.

Property Investors: Curbing Housing Investment Demand.


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Problems & Challenges …

1. Crowding out.

2. Housing sector impacts.

3. Consumption inefficiencies.

4. Retirement financing.

5. Lack of unemployment insurance.

6. Financial Sector development.

7. Governance issues.

8. Un-equitable social engineering.

9. Speculative gains eroding work ethic.

10. Policies impeding talent attraction.

11. Politicization of HDB.

For Listening …..

5/6/2015 38 Aliaa M. Shamallakh | IUG | Faculty of Engineering | Architecture Department