Looking to another dragon: How does the expensive city of Singapore make housing so affordable?
Expensive housing is a familiar and pressing issue for many Seoulites, especially those who have just received their graduation scroll or landed their first job. According to a survey conducted by the Seoul Institute in 2021, 53% of 676 Seoul citizens in the age range of 18 to 34 responded that buying a house is impossible for them without support from their parents. Young Seoulites are evidently faced with a rather bleak situation. However, they are not alone, as their peers in Taiwan and Hong Kong are also struggling with this plight of housing unaffordability. The price-to-income ratio of these countries can be treated as a measure of the difficulty in affording a house. According to data from Numbeo, it would take approximately 24. 9 years of not spending a single dollar to afford a house in Seoul, 28. 8 years in Taipei, and 32. 1 years in Hong Kong. In fact, finding a place to stay even through renting is never a simple task. For example, in Seoul, though an expensive deposit and recurring payment for a weolse unit may be more manageable than what is required for a jeonse unit, an even larger deposit, both renting options pose a huge burden on young people. People from these three countries spend their entire lives managing high rental costs or paying off housing debt. Whether one rents or buys, one must compromise one’s quality of life just to try and secure the basic rights of living. However, it is interesting to note that in Singapore—one of the four Asian dragons alongside Korea, Taiwan, and Hong Kong—the number of years that one must go without spending to afford a house is 14. 9 years. At least a decade less than that of the other countries, it is apparent that Singapore has a much more friendly housing market. To provide further context, these four Asian economies were nicknamed “Four Asian Dragons” due to their rapid industrialization and development since the 1960s, which eventually led them to enter the list of developed economies that continue to have important roles in global technology and trade today. However, all these economies are now facing a similar phenomenon of a scarcity of land and a high density in population, leading to housing affordability being one of the largest challenges faced in the past few decades. Therefore, it is worth knowing what places Singapore in a different position than the other three dragons. Indeed, having one’s own place is not a large struggle for Singaporeans living in the so-called lion’s city, despite it being ranked as the world’s most expensive city to live in. This high affordability of housing is largely due to the public housing program of the Housing and Development Board (HDB). Through the program, the government owns 90% of the state’s land, effectively controlling the potentially unlimited increases in the price of land, resulting from transactions in private ownership. HDB public housing units were initially launched in 1960 to tackle the housing crisis emerging for low-income groups due to the growing population. The flats are currently allocated based on the mechanism of the built-to-order (BTO) system. BTO allows first-time home buyers to get an affordable housing option subsidized by the government, with the down payment and home loans being largely covered by the mandatory Central Provident Fund (CPF), which employers are required to contribute to for each of their employees. This makes owning a house much more feasible, and the citizens are barely required to compromise their quality of life to do so. Not only that, but a HDB unit is subject to a 99-year lease, meaning that it only needs to be returned to the HDB after a century, for the land to be recycled and reused. This design accommodates the needs of the house owners and their children. Up till now, more than 1 million HDB flats have been constructed and accommodate 80% of the Singaporean population, which is not a norm around the world. A successful and sustainable public housing scheme requires stable funding by the government, achieved through comprehensive policies. This is difficult to execute. In many places, public housing is often poorly maintained with incomplete amenities, giving society a bad impression of such a housing scheme. Hence, we consider high-rise, luxurious apartments as the opposite of the rows of aging public flats; the perception of public housing is that it is for low-income groups that have difficulty affording other, perhaps better options. Public housing aims to eradicate social inequalities to a certain extent by providing alternative options for house ownership. However, the failure of these schemes instead exacerbates social stratification. In contrast, in Singapore, people of all income levels live in public housing units, which the government continues to enhance for the benefit of residents. Owning an HDB unit means that a quality living space is safeguarded for generations, and any possible instability that arises from renting is also eliminated. In other words, the Singaporean government has achieved housing justice for its citizens. In conclusion, the initial establishment of a public housing scheme depends on many crucial factors, one being the government’s ability to acquire substantial land from the private sector. This process is both time and cost-consuming, and countries cannot enjoy the fruits of such labor until much later on, if at all. To ensure affordable housing for the people, far-sighted and stable policies are important, with sound planning of the financial system to support the expansion of public housing. The sustainability of such a scheme is a separate issue. It depends on ensuring the quality of public housing and encouraging people to choose that option. Singapore's success may not be achievable everywhere. However, what it does do is propose the possibility of addressing the widespread issue of housing injustice through a public housing scheme aimed at all income levels.