48 years of housing a nation

Source : Straits Times - 25 Oct 2008

From breaking the back of the housing problem in the 1960s, the HDB’s new challenge is meeting aspirations of dwellers in the new millennium

UNLIKE in many countries where public housing means ‘homes for the poor’, some 80 per cent of Singapore’s population live in a diverse range of 900,000 public homes islandwide today.

Of this 80 per cent, about 95 per cent own their abode, making Singapore a country with one of the highest home-ownership rates in the world.

It was a matter of time before the HDB’s 48-year achievement in housing and providing a quality living environment for Singaporeans caught international attention. This year, it was the only Asian country to clinch the prestigious United Nations Public Service Award.

Each decade has brought the HDB its own set of challenges since it was set up in 1960.

In the 1960s, poverty and poor housing conditions were rampant, with about 30 per cent of the population living in slums and squatter housing, said Associate Professor Tu Yong of the National University of Singapore’s department of real estate.

She said the organisation swung into action, building basic flats with sanitation and electricity with a ‘zeal akin to a crusade’.

The Home Ownership Programme - which encouraged Singaporeans to buy their homes - was launched in 1964, and became the cornerstone of Singapore’s public housing policy.

HDB chief executive Tay Kim Poh said in a recent interview that the board believed that ‘in providing homes to our people instead of renting them a home, they have a stake in the country’.

The result: 35 per cent of the population housed in 120,000 flats within the first decade.

The following decade was focused on creating new towns to meet booming demand.

The concept of a new town, complete with parks and commercial, industrial and recreational facilities was pioneered in Toa Payoh, then applied to Ang Mo Kio, Bedok and Clementi.

By the end of the decade, six more towns were developed: Yishun, Hougang, Jurong East and West, Tampines and Bukit Batok.

A series of deregulation policies, including raising the household income ceiling and enabling home-owners to re-sell their homes under certain conditions, further gave Singapore’s public housing a shot in the arm.

In the 1980s, the HDB’s emphasis started to lean towards quality, now that basic housing problems were solved.

Neighbourhood precincts which promoted social interaction and community development such as Pasir Ris and Bishan were born. Prof Tu said that in that decade, the public home ownership rate hit 79 per cent of the population.

In 1990, the public housing resale market was further deregulated and prices of HDB flats began their ascent.

The HDB then launched upgrading programmes to enhance and retain the value of public flats and their surrounding environment, such as the Main Upgrading Programme and Lift Upgrading Programme.

Older flats were replaced via the Selective En Bloc Redevelopment Scheme which relocated residents into new flats.

The current decade has been an exciting one for the HDB: It ushered in a new era for public housing which saw landmark projects such as the iconic 50-storey Pinnacle@Duxton (the result of an architectural competition), and the eco-friendly precinct Treelodge@Punggol (which boasts solar panels).

Upgrading programmes were also re-packaged into new initiatives such as the Neighbourhood Renewal Programme, which upgrades an estate with better facilities based on feedback from residents, and the Home Improvement Programme, which improves the interior of a flat.

This decade also saw the birth of new schemes such as the Design, Build and Sell Scheme (DBSS) where private developers build and sell condo-style HDB flats to meet rising aspirations.

Such homes are popular: DBSS projects were often launched to overwhelming numbers of applications.

But this did not necessarily reflect the take-up rate. Feedback revealed that home buyers found prices far too high - especially with the HDB’s $8,000 household income ceiling.

At one DBSS project, the 714-unit City View@Boon Keng, flats were priced from $536,000 to $727,000. At another, Park Central at Ang Mo Kio, flats were priced from $400,000 to just under $700,000.

A quick check with both developers showed that the flats are 85 and 75 per cent sold respectively.

Prof Tu said that higher-end housing could be taken care of by the private market. ‘If you’re pricing at the $600,000 to $700,000 range, it’s private home prices,’ she said. ‘Why go into this sector?’

Industry experts such as agency boss Albert Lu of C&H Realty agreed. ‘At such prices, many first-timers will not be able to afford these homes and will find themselves overstretched.’

However, others such as Mr Eugene Lim, assistant vice-president of property agency ERA Asia Pacific, felt that it was ‘only logical’ that the HDB evolved from providing basic housing to catering to diverse groups of buyers.

He said what was important was that it continued to offer the cheapest form of housing for Singaporeans.

Associate Professor Sing Tien Foo, deputy head of NUS’ real estate department, said the HDB’s biggest challenge, going forward, was balancing the need for affordable housing with providing high-quality flats.

Other issues to consider are the $8,000 income ceiling which many feel is due for a review, and the asset-rich, cash-poor phenomenon that Singapore home-owners face, as they use CPF monies to fund homes.

The HDB is implementing a new scheme called ‘lease buyback’, which allows the elderly to sell their HDB flats to the Government for cash while being able to stay in it.

But Prof Sing pointed out that this is available only to low-income households. ‘It would be good to extend it to other home-owners, too, as they also face being asset-rich and cash-poor.’

Meanwhile, first-time home buyers like Mr Liow Zhongfa, 24, has no complaints.

He bought a five-room premium flat in Jurong West for $250,000, which was ‘well within reach for someone who just entered the workforce’.

‘When I’ve got more savings, perhaps I can then upgrade to the next tier of HDB flats, maybe a DBSS condo-like flat.’