My thoughts on YouthQuake 7 - Can Young Singaporeans Afford Public Housing in Singapore

Some thoughts from YouthQuake 7 - CAN YOUNG SINGAPOREANS AFFORD PUBLIC HOUSING IN SINGAPORE TODAY?

Speakers:
Mr Leong Sze Hian
Mr Gerald Giam
Mr Pang Eng Huat
 
Mr Pang started the discussion off by sharing his experiences and thoughts on the current state of HDB housing and why it shouldn't be considered as an asset enchancing class. I didn't take notes so I probably have missed out quite abit of his points but the most memorable takeaway I got from him was how he reminded us that while the government encourages us to sell our property and upgrade to a more expensive flat-type, a home is more than just numbers but a accumulation of memories and experiences that is priceless.
 
Mr Giam came onto the podium to discuss his proposals to help make public housing more affordable for Singaporeans. I'll talk more about his proposal shortly below. I thought it was really friendly of Mr. Giam to approach every member of the audience personally to chat with them before the forum started formally. I look forward to being able to interact with you more some day.

Mr Leong, ever the statistician and analyst, shared with his thoughts on the statistical impact of some of the policies made in the recent years, as well as to discuss on the topic of the lack of transparency which prevents political parties from being able to come out with better proposals/solutions. You can read some of the articles he penned recently which he mentioned and quoted from the forum. (I have linked it at the bottom of the page)

I'm going to backtrack a little to point out Mr. Giam's proposals as I think that it is something that we should think about.


Mr Giam made a couple of proposals, namely for:

1) HDB to refocus back on its mission to provide affordable housing for Singaporeans, rather than on increasing value of their homes.
2) The creation of a new class of HDB flats that is pegged to the annual median household income of the relevant flat type (ie. 2 room, 5 room etc.) by 3 times.


He calls this new type of HDB flats as 'Affordable Class' and he proposes that this scheme of flats will run along side with the existing flats.

This will be done by selling AC flats at prices pegged to three times the relevant median annual household income. For example, if the median annual household income of all current 3-room flat owners is $32,000, the median price of a 3-room AC flat should be $96,000, with up to 25 per cent adjustment made for location, orientation and storey height.

He acknowledges that with the introduction of the AC flats, property value for existing flats (not under this scheme) may dip slightly but he maintains that this is for the better in the long run.

As for the cost of this scheme, without transparency from HDB about the cost of building each flat, it is hard to compute the exact cost. However, based on HDB’s current selling price of new 3-room flats, each AC flat will be at least $45,000 cheaper. Depending on the number of such flats that may be sold each year, we could be looking at the government spending a few hundred million more per year to implement this scheme. In my opinion, this is a worthwhile expense—and definitely affordable for the government!

During the Q&A session, many interesting new suggestions came from the floor.

Donaldson Tan from New Asia Republic suggested that there should be the creating new segments in the private housing market by allowing communities to pool together resources and form a housing association to build homes collectively like in the United Kingdom.

Housing Associations in the UK are independent and non-profit social organizations that build low-cost houses for the poorer segment of society, giving them an option to either rent a unit or opt to join a shared equity scheme where they can purchase a share of their home even though they cannot afford the mortgage.

I agree with the principal of having communities pool resources to build housing although I'm not too sure if it would be feasible in urban and land-scarce Singapore.

Another member of the public suggested that another alternative is to look at HK's public housing schemes which heavily subsidizes the poor for rental apartments.

 
There were also many suggestions and questions from others in the audience but unfortunately as I didn't have my notepad with me to write notes on, I couldn't remember most of it.
 
All in all, I thought this forum was extremely engaging and I liked how the audience were very participative with their ideas on how we can improve public housing in Singapore. I really like Mr. Giam's proposal as it seems to be something that can be implemented easily within our system although I do have a couple of questions like how the figure of pegging 3x the annual median household income was determined whether a more detailed analysis of the financial impact of such a scheme can be obtained.

I enjoyed myself and I look forward to attending the next YouthQuake. Thanks WPYW Exco!

[1] WP Forum Speech: We can make public housing affordable again - Gerald Giam
[2] Singaporeans' rights to social security and public housing - Leong Sze Hian