Overview of Singapore Public Housing Story

A division of Overview of Singapore’s Public Housing Mr Chionh Chye Khye CLC Fellow OVERVIEW • Introduction & A Bit of History • Key Success Factors Singapore:A City-State’s Challenges 5.40 Million • Population of 5.535 mil • Land area of 719 km2 • 7,698 persons/km2 density • Hi-rise hi-density living Structure of Real Estate Market in Singapore Housing Market <ul style="display: flex;"><li style="flex:1">Public </li><li style="flex:1">Private </li></ul>Home Ownership Rental Home Ownership Rental Landed property, Condominium & ECs 1R / 2R / 3R / 4R / 5R / EF / Studio Apts Primary Market (HDB) Secondary Market (Resale) Primary Market Secondary Market HISTORY: TURNING A CITY OF SQUATTERS TO A HOME OWNING SOCIETY Housing Landscape: 1950s City Fringe Squatters Inner City Shophouse-cubicles •Rapid Population Growth •Poor Housing Conditions •Severe Housing Shortage Rural Villages/Farms SIT 1927 to 1959 The Vision “ My primary occupation was to give every citizen a stake in the country and its future… if every family owned its home, the country would be more stable… I believe this sense of ownership was vital for our new society… ” Mr. Lee Kuan Yew, Prime Minister of Singapore Housing & Development Board Established in Feb 1960 9“Home Ownership for the People” Scheme 1964: Home Ownership for the People Scheme • Targeted at lower-middle and middle-income households • Intended to give Singaporeans a stake in the country • Public Balloting conducted to allocate flats to applicants • Low-interest government loans available to those who were not able to afford outright purchase © 2016 Housing & Development Board Residents in Public Housing Population (‘000) 4,500 3.9 million 3.2 million 4,000 3,500 Estimated 3,000 2,500 2,000 1,500 1,000 500 Resident Population Resident population in Public Housing  82% (2015)  23% (1964) Estimated Resident Population living in HDB Flats 01960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 © 2016 Housing & Development Board Public Housing Today • Over 80% of Singapore’s resident population lives in HDB flats • 95% own their homes Social Class Integration: Variety of Housing Options within a neighbourhood High Private Property Exec Condo 3Gen/ Executive/ 5-room Financial Ability 4-room 3-room 2-room Flexi HDB Flats Rental flats Low © 2016 Housing & Development Board The Transformation 1980s 1960s 2000s 1950s The Pinnacle@Duxton Punggol Waterway Terrace Key Success Factors • Land allocation for HDB housing through Land Acquisition Act • Government funding to HDB for development and for mortgage loans to purchasers • Government’s emphasis on home ownership & affordability • Emphasis on community building • Focus on estate maintenance and upgrading • Favourable economic environment: high growth, low unemployment, longterm appreciation of housing values Land AcquisitionAct • The Land Acquisition Act allowed the government to acquire 17,692 hectares of land between 1959 and 1984 • This represented 30% of Singapore’s total land area (excluding reclaimed land) • Half of this land was given to HDB for public housing • Land acquisition was done relatively cheaply and quickly which in turn allowed Public Housing to be developed with low land costs and at a very fast pace Central Provident Fund (CPF) • The CPF was set up in 1955 as a retirement scheme with contributions from both the employer and employee • Government sells bonds to CPF Board and uses fund to finance development of public housing and infrastructures • In 1968 CPF savings was allowed to be used for the purchase of HDB flats • In 1981 CPF savings was: allowed for the purchase of private residential properties in Singapore Why Home Ownership? Provides an asset & a store of Provides a stake in the country value Key Benefits Encourages better maintenance Promotes rootedness & belonging Builds strong work ethics © 2016 Housing & Development Board Current Range of Housing Subsidies Income up to $12,000 Income up to $14,000 Resale Flats (market value) Executive Condominiums New Flat (market discount) Family Grant ($10k - $30k) Proximity Housing Grant ($20k)* Family Grant ($30k) Additional CPF Housing Grant ($5k to $40k) Special CPF Housing Grant +($5k to $40k) Concessionary Concessionary loan loan * There is no income ceiling © 2016 Housing & Development Board Keeping Development Costs Low Land Cost - Land Acquisition Act (LAA) • 1966 LAA – enabled state to compulsorily acquire land for public purpose at a reasonable price Construction Cost • HDB cut red tape, broke cartels, ended payment delays & corruption, ended over-specification, raised productivity, instituted open tender and fair contract practices • HDB built brick, sand and granite quarries, award bulk contracts for steel bars and cement

Overview of Singapore Public Housing Story

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