Towards Housing, A Gracious Society - An Experiment with Social Housing?
Shelter is seen as a basic human right across the world, but this has been interpreted differently according to the various policies respective governments have chosen to take. Owing to an urgent need for housing in the 1960s to house the people previously living in villages and slums, the Singapore government pertinently and rightly took over the responsibility for creating quick but respectable public housing under the Housing Development Board. As time evolved, and the private housing market developed in strength, we retained this dichotomy between the public housing and private housing market, which formalized spatially through the separation of ‘walled private condominiums’ from ‘road access, concrete-paved public housing’.
Other parts of the world have adopted a variety of different approaches, but I will like to bring to attention the ‘social housing’ concept as practiced in Scandinavia. To start with, I should clarify that social housing does not contain any developer implications, that is, it can be either public or private developed, or a combination of both. In Scandinavia, the model chosen is the primarily private developed one. This means that for every residential project a private developer undertakes, they are required by law to set aside 40-60% of units within that project for social houses, which can only sell at 40-60% of the market value of the remainder of the normal units within the estate. The developer is only allowed minimal differentiation between the social and normal units in terms of unit size and detailed façade. It is important to note though, that fully exclusive private developments continue to exist as well. Thinking aloud, what are the implications of such a model for Singapore?
Firstly, what will be the direct impact on Housing Development Board? The state subsidizes public housing using taxpayers’ money; the passing on of this responsibility to the private developers will mean a lifting of the burden on the state and indirectly the taxpayer. HDB’s remit will undergo a fundamental change from a housing developer, into a masterplanner/regulator which crafts regulations for the private developers and also work with them to develop the new ‘housing estates’.
Next, what are the implications on the private developers? Will they want to take over such a responsibility? The first reaction will be: why will they want to take over the responsibility of social housing, when they do not stand to make any profit from it? However, the possible economies of scales they obtain by having larger land parcels and increased units, yet still able to charge 40% of the units at normal market price, may actually offset the reduced prices they can sell the social houses for. This is something the HDB is currently not able to do, as it does not develop private housing. The state can also further entice private developers through passing on a portion of the original subsidies, PR allowances, more freedom of use on site. Indeed, this might give way to more mixed-used and well-integrated estates which can have both social and environmental benefits. Hopefully, this can also appeal to the civic-mindedness of our local private developers as they get a chance to improve our nation on a scale beyond the present. However, we are also of course not limited to local private developers; overseas private developers would still be welcome to tender their bids too.
Thirdly and most critically, what will be the impact of such a change on the ground? How will these new ‘housing estates’ look? For one, there will no longer be any concrete-paved void decks, as these will not be deemed marketable to the non-social market. The obvious direction will therefore be that these ‘housing estates’ will look and feel better than any ‘public or even private developments’, as the private developers will need to raise the bar to attract people to the normal units. I daresay that the majority of Singapore’s population on the whole, would be living in better-off conditions than ever before. HDB’s new found role will also be to work with the private developers to achieve this, and master planning will take foremost precedence. I will also hazard a guess, that these new estates will bring about a greater sense of social cohesion and etiquette, evoked by a greater sense of belonging; ‘unglamorous’ attitudes and behaviours may also thus, gradually disappear.
Finally, what will be the implications for the state in general? Again, the first reaction will be that the new ‘housing estates’ will raise land value over and above what any ‘public housing estate’ now can achieve. And the state stands to benefit through the imposition of Development Charge to cream off these increases in land value. A closer understanding will however render this unnecessarily true, as the increase in land value of these new housing estates, may be offset by a fall in land value in other land parcels in the country. However, as it stands, there can be no evidence that supports either the former or the latter. In all eventualities, this would be a fundamental issue that the Urban Redevelopment Authority as overall master planner of Singapore can address and work on, especially as it has effective regulatory and enforcement tools it has utilized well since its formation. This by itself cannot therefore be a reason for not experimenting with such ‘new housing estates’.
This brings me therefore back to what I see as the main obstacle for such a model from succeeding here in Singapore: The reception of the population towards the notion of paying more than your neighbour for an almost similar house, and a completely similar public environment. If Singaporeans refuse to buy the normal units in such developments, no private developer will be able to market the entire project. Similarly, it would be foolhardy as well, for the government to try to initiate such a change if it is not in line with the demands of the people.
Are we then, as Singaporeans willing to forgo our desire for individual distinction in terms of housing, if it means that almost everyone may actually benefits? If so, it might be worth experimentation starting with a regeneration of an older estate. Beyond just a roof over everyone's head, housing may be the best tangible avenue which the society can moves towards graciousness. After all, the house and the environment is where we spend most of our time.
2 Comments:
What happened to my comments? I don't have them anymore.
As far as I understand, no private developer cares about civic-mindedness unless it contributes to the bottom line, eventually. Let’s just consider the highly unlikely scenario that private developers do not earn more in your social housing proposal (why would they tender in the first place?) Anyway, in order for your social housing proposal to see an increase in quality over HDBs, there will be an increase in development costs.
Who is going to bear the costs? Taxpayers? Or residents paying the full fees in your social development project? As you rightly pointed out, unless you are sure that there are unusually altruistic residents willing to subsidize those paying less, private developers that are afraid of recovering the costs won't even bother to tender. In addition, how is it possible that a private developer can realize economies of scale and HDB can’t? Especially when the scale of HDB development extends over the whole island?
I don't really think the question is about whether Singaporeans are willing to forgo individual distinction in terms of housing. It is not just distinction at stake here; it is the market value of the apartment. Why should I pay $30,000 more for the same market value compared to the neighbor next to me? I might as well just give him $28,000 for him to do whatever he wants. He may opt for a cheaper apartment and we will both be personally better off since I get to save that $2000. You are essentially trying to get the state to tax its citizens to pay more for a public good based on the assumption that the state knows what the individual wants. Why get the state to do the redistribution for me? Big state= more inefficiency, more waste. Ultimately, your proposal boils down to whether society as a whole is willing to fork out more subsidizes for improvement in the quality of basic, mass housing. But it is supposed to be basic housing.
A much simpler way to improve the quality of mass housing in Singapore can be achieved if the Government spends more money through tax revenue or future streams of income flows from our reserves. Having private developers doesn't change the substance of your proposal.
I guess you really like the egalitarian utopia where the rich doctor can stay next to the presumably poor taxi driver. A cheaper and easier way would be to have quotas by occupation rather than by race :) If Singapore is a homogenous population where everyone has roughly the same education, same income, same religion etc, your plan may conceivably work. The more multiracial a country, the less likely you will see income redistribution policies. People are just less willing to subsidize others that seem different from them. Sad, but unfortunately, this is likely to be true.
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