Singapore, a country which is known for its excellence, in healthcare, education, recreation, public transportation and is also one of the safest countries in the world.
And moreover, Singapore’s homeownership rate of 89.7% is one of the highest in the world.
And what makes this feat all the more surprising, is that Singapore isn’t a big country but only a small island nation with a size of 728 Square kilometers which roughly equates to 0.9 times the size of New York City.
making it the 3rd most densely populated country in the world with a population density of 8952 people per square km and despite this Singapore is able to provide housing to almost all of its residents.
But this was not always the case, In the mid-20th century Singapore was going through a lot.
From overcrowding, poor sanitation to unemployment and extreme levels of poverty.
Majority of Singaporeans lived in slums at the time and diseases like tuberculosis was a common scenario.
So, How did Singapore achieve one of the highest homeownership rates in the world?
Table of Contents
- Singapore’s Struggle for Housing
- How was HDB (Housing Development Board) Established?
- How HDB Transformed Singapore Housing?
Singapore’s Struggle for Housing
Pre-Colonial Era (Before 1819):
Before 1819, Singapore was a modest trading outpost inhabited by a mix of different ethnic communities. Housing during this period consisted mainly of simple wooden structures built by these communities. While not that great, these dwellings served the needs of the relatively small population.
Colonial Era (1819-1965):
From 1819 onwards, when the British colonised Singapore, it grew into a busy trading hub and because of its strategic location many people from China, India, and nearby islands moved there, causing the population to explode.
However, the influx of migrants far outpaced the development of housing infrastructure, resulting in overcrowded and unsanitary living conditions which contributed to the spread of diseases like cholera and tuberculosis.
Despite the urgent need for housing, the colonial administration prioritized the development of commercial areas and port facilities.
Post-World War II (1945-1960):
After the world war in 1945, things got even worse. The war had damaged many buildings, and soldiers returning home couldn’t find decent places to live. So, they started building temporary wooden houses on vacant land which lacked even the basic sanitation and clean water facilities and even these houses were overcrowded.
How was HDB (Housing Development Board) Established?
In 1927, Singapore Improvement Trust was established by the British Administration but it proved to be a massive failure as it did not really have financial resources and political will from the government to undertake large scale housing projects.
The SIT’s power was also very limited, making it difficult to acquire land for development and on the other hand Singapore’s Population was rising rapidly post World War 2, creating much greater demand for housing.
So, by the late 1950s, Singapore’s housing crisis had reached a tipping point.
Internal Self-Government:
around this time although Singapore was still a British colony, it enjoyed a greater degree of internal self-government.
And this local government, which consisted of elected representatives, possessed the power to address the urgent issues which the island faced, including the critical issue of housing.
So, in 1960, Singapore’s first prime minister, Lee Kuan Yew, and his party replaced SIT with the Housing and Development Board (HDB).
How HDB Transformed Singapore Housing?
The HDB had to perform 3 primary functions:
- First, it had to identify and acquire land from various sources, including private landowners as well as the government agencies.
- Second, it had to construct residential buildings on the land so acquired that caters to people with different income groups.
- And finally, the HDB had to manage and maintain these residential buildings.
What Made HDB a Success?
Today, over 80 percent of Singaporeans live in a HDB flat, of which about 90 percent own them but what makes HDB such a groundbreaking success?
First, the HDB adopted a approach to maximize the use of the land by constructing high-rise buildings to effectively utilize the limited land Singapore has and today the High Rise Building in Singapore has become synonymous with Public Housing.
But what was really revolutionary about HDB was its emphasis on creating “Self-contained Towns” also referred as “HDB Towns”.
Schools, healthcare facilities, shopping malls and markets were among the many things found within the walking distance of the residential areas in these HDB towns.
Additionally, these HDB towns are well-connected to bus and MRT networks, making it easier for residents to travel to and from work, school, and other parts of Singapore without relying on private cars.
These independent towns also have communal areas like parks, playgrounds, and other gathering places where residents can interact, socialize, and develop relationships with one another. In addition, the HDB organizes community events, programs, and activities to foster community bonds and social integration.
The HDB also ensures that the flats in these Towns are made in such a way that individuals and families with different financial means could find suitable housing options ranging from one room apartment to 5-room flats, as well as executive condos that are similar to private condos.
Now a Singaporean can buy a HDB flat in two ways:
First is BTO flats and second is from the Resale market.
BTO flats or Build-to-order flats, is a concept where homebuyers can choose from a selection of upcoming housing projects and apply for units that best suit their preferences and budget.
Under this, the flats are directly purchased from the government at subsidized prices but to be eligible the person has to fulfil certain income and citizenship requirements and waiting time for these flats can vary from 2 to 7 years.
Young couples or families looking to buy their first home are generally preferred for BTO flats by the government.
And once a homebuyer receives the possession of a BTO flat, there is a minimum occupation period of 5 years which means you cannot sell or rent out your flat before 5 years.
Another option which is available to a homebuyer is buying the flat from the resale market but this can be a bit expensive as price depends on several factors like flat size, location, floor level and market trends.
However, restrictions to buy these flats are few and even Permanent Residents are eligible to buy these flats from the resale market and there is no minimum occupation period for these flats in case you want to resell or rent out.
However, it is important to note that Singapore operates under a long-term ownership model, wherein HDB flat buyers acquire a lease from the government for a period of 99 years.
While technically residents do not own these houses but they still enjoy exclusive rights to occupy and utilise their flats for the duration of the lease.
When the 99-year lease expires, the property is returned to the state, which will then recreate it for Singapore’s new social and economic needs.
The flats will then be recycled and rebuilt into newer HDB flats for future Singaporeans.
And since the land is so scarce in Singapore the lease keeps the prices of properties in check for future homebuyers.
Conclusion:
Singapore’s housing model offers valuable lessons for countries seeking to address housing challenges and improve the well-being of their populations. By prioritizing government intervention, long-term planning, and collaboration, we can create a future where housing is not just a basic need, but a fundamental human right for people everywhere.
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