With the introduction of a liberal immigration policy since the 90’s, public housing has become less and less affordable. The HDB continued slumbering at the wheel and this has caused irreparable damage to Singaporeans’ retirement planning. The prices of public housing have spiraled out of control to the extent that the government has only managed to control the prices of new HDB flats. But wasn’t public housing supposed to be affordable, regardless of resale or new HDB flats?
A number of reasons why the HDB’s control of public housing is detrimental for Singaporeans:
1 HDB rules were arbitrarily written by a single political party decades ago and does not reflect current reality. Real parliamentary representation of the people has been almost non existent. Even till today, PAP’s 90 per cent dominance in parliament ensures Singaporeans’ voices and concerns are not heard despite its 60 per cent support. This makes a mockery of democracy.
2 Singapore’s land belongs to all Singaporeans. HDB’s thousand and one rules were conceived by politicians and top civil servants who do not live in public housing. Worse, grassroots do not represent Singaporeans due to their political affiliation. How could citizens’ rights to public housing be accorded to permanent residents on a silver platter? 50,700 HDB flats owned by PRs simply means 50,700 Singaporeans were deprived of their rights to public housing. To add insult to injury, 2700 PR households were allowed to sublet their whole flats link while needy Singaporeans are required to beg for a rental unit from the HDB. The luckier ones waited months/years. The not-so-lucky thousands have been rejected because they did not fulfil HDB’s criteria. Is one expected not to believe Lee Kuan Yew when he said “Never mind what the people think”.
3 HDB’s planning, if any, is haphazard at best. The unbelievable shortage of public housing units is testament to its inefficiency. This led to runaway prices which translated into high rentals. How could any highest-paid civil servant in the world not have understood Economics 101 i.e. demand and supply dictate prices? For those rejected by the HDB, high rental forms a large chunk of income and cripples a family’s finances. With a basic 3 room unit rental unit going for more than $2,000 per month, any median income earner ($3000 less CFP) MOM Stats will likely make his temporary home at the beach.
4 HDB’s politics of control, courtesy of the PAP, is not to ensure housing, including rental, remains affordable. If the HDB had been able to ensure public housing was affordable, thousands of Singaporeans would then not need to hobble with crutches to the HDB office and their MPs to appeal public housing related cases. (Ex PAP MP, Tan Soo Khoon, put it succinctly:”Why break a man’s leg and then give him crutches to wobble on”?)
5 Groups which were arbitrarily deprived of purchasing a public housing unit have suffered for decades. While the government continues to build up its reserves to the tune of almost $1 trillion, this is of no benefit these groups. Housing is a necessity needed here and now whereas our reserves are meant for a rainy day for who-knows-when.
6 For major screw ups, HDB planners have never been held accountable. Without addressing the issue of accountability, the same officers with an F9 grading is allowed to continue performing the same role. Is it logical to expect their performance to even improve marginally when there are no consequences for failure?
7 Frequent policy flip-flops have caused untold misery for both buyers and sellers:
a When property prices were already in the stratosphere and still heading skywards, 30/35 year loans were commonplace. That much stress resulted from a high loan quantum even for a 3 room resale flat did not matter to the HDB. ‘Affordability’ was justified with long loan tenures. Buyers suffer.
b Belatedly, it has realised property prices have not been reflecting fundamentals for some time. ‘Reverse’ measures have been taken to bring prices to a sane level i.e. reduced mortgage servicing ratio, reduced loan tenure, etc..Buyers and sellers suffer.
8 Since the government has repeatedly trumpeted our success as evidenced by a skyrocketing GDP, housing needs of most should have been met. Instead, even those who could not afford and needed to rent one are placed months/years on the waiting list. Due to HDB’s thousand and one conditions, thousands are also not eligible for rental. But the land rightly belongs to all Singaporeans.
9 In third world countries, even the poor could own land and their own homes. During the recent once in fifty years Bangkok floodings, Thais working in the capital returned to their hometown to wait out the flood. Because they own their homes, the day to day living expenses did not cripple their finances. Should a similar a crisis occur in Singapore, Singaporeans who do not own their homes (fully paid but we are just lessees) will be in deep trouble.
10 Despite repeated calls to reveal HDB’s construction costs, the HDB continues to act in an opaque manner as if Singaporeans’ queries were inaudible. Has the HDB forgotten taxpayers’ are their paymasters?
11 As the largest property developer housing 85 per cent of the population, HDB’s action could impact property prices singlehandedly. The absence of an elastic housing supply is not healthy for any economy.
12 Because the government has vested interests in property related companies and REITS, its policies might be skewed towards higher prices for higher investment returns. This will be detrimental to citizens.
13 HDB has to release its control of land and concentrate on looking after low income Singaporeans and vulnerable groups. Instead, its role has been upgraded to looking after even the middle income. Every additional role it takes on dilutes the quality of its service.
14 Increasing its roles and continuous tweaking serve only its political masters and places an unnecessary strain on its administration. The objective of making public housing affordable was lost because the HDB was focused on much less significant issues.
15 Citizens in every part of the world aspire to own a roof over their head. Owning a condominium was made possible through the initial purchase of an EC (privatised after 10 years). A better scheme would have been a no frills (except car park and security) private property similar to the EC scheme. This is more affordable for the ‘sandwiched’ class.
With a total of 924,729 public housing units to manage, the HDB has now lost sight of ‘affordability’. Coupled with policy flip flops due to poor planning (granted some situation cannot be predicted), succumbing to populist pressure, perpetually tweaking to appease different groups, etc. trying to control almost a million units has proven to be an administration nightmare. This is detriment to the interests of citizens. As a politicised statutory board, the HDB has failed Singaporeans.
In controlling less, the government has more time to look at the bigger picture of affordability. The government could help Singaporeans realise our aspirations of owning a roof over our head. This could be done by reducing HDB’s stake in public housing and sharing the pie with private property developers with more options other than ECs.