Singapore’s housing model, often lauded for its high homeownership rates, is not without its challenges. Economist Sock-Yong Phang argues that the unique approach of state ownership of land and long-term leases, which has been instrumental in achieving high homeownership rates, is now facing significant drawbacks as housing affordability becomes a pressing issue.
Phang, a leading expert on Singapore’s housing policies, highlights the profound influence of the 19th-century American economist Henry George on the city-state’s approach. George’s advocacy for communal land ownership, where individuals own the value they create but land belongs to everyone, has deeply shaped Singapore’s housing policies.
The Singaporean government has implemented George’s idea by maintaining state ownership of land and offering long-term leases to its citizens. The government’s Housing and Development Board (HDB), a key player in this system, provides public housing at subsidised rates, which has been instrumental in achieving high homeownership rates.
However, Phang notes that while the HDB system has been effective in the past, it is now facing challenges. Rising housing costs make it harder for young Singaporeans to afford homes, even with government subsidies. This has led to growing inequality, as those who own property see their wealth increase while younger generations struggle to enter the market.
Phang argues that Singapore’s housing system, once a model of affordable homeownership, is now contributing to a widening wealth gap. The reliance on property as a means of wealth accumulation has also created a culture where housing is seen more as an investment than a basic need.
To address these issues, Phang suggests revisiting George’s ideas on land ownership. She advocates for policies that would focus more on housing as a public good rather than an investment. This could involve increasing property taxes or implementing measures to curb speculative buying, ensuring that housing remains affordable and accessible to all Singaporeans.
Phang’s critique is particularly relevant as other countries look to Singapore’s housing model for inspiration. While the city-state’s success in achieving high homeownership rates is undeniable, Phang’s analysis suggests that the model has challenges, particularly in an era of rising property values and growing economic inequality.
While Singapore’s housing policies have historically been successful in promoting homeownership, they now face significant challenges.
Rising costs and a growing wealth gap are putting pressure on the system, and new policies that prioritise using housing as a public good are needed.
Phang’s insights highlight the importance of reevaluating housing strategies to ensure that they continue to serve the needs of all citizens, not just those who can afford to buy property.