Mental Block of HDB?

Wasn’t quite sure if the journalist suffered a writers’ block when penning this poorly written coverage, which provided hardly any context for which the views he was trying to bring across was spoken. Which NUS forum, what was it for, where was it, slowly trickled in through the article and different terms were used (how did the ‘Tembusu Forum’ name suddenly got into this NUS forum?) And was it held in NUS – it mentioned participants watched it online, so were the speakers also speaking over some video conference or was it live – how did the photo of the speakers in mask get on the article?

Sorry for going a little off-tangent to lament the state of writing and journalism in Singapore but I was intending to comment on this bit of the article:

Prof Koh said that the issue of rented housing versus homeownership was a “mental block” for Singapore. He recounted how he had moderated a question-and-answer session with founding prime minister Lee Kuan Yew at the 50th anniversary of the Housing and Development Board in 2010, and had asked the veteran politician then to acknowledge whether there may be some young people in self-employment or in contractual jobs that face difficulties becoming a homeowner. “Mr Lee’s answer was no. (Home ownership) has become an ideology in Singapore that it is a mental block to building better rental housing for the poor, and good rental housing for the young middle class,” Prof Koh said.

Prof Koh just recounted a comment from then Minister Mentor Lee and it was 10 years ago. That was the pre-Grab era, where the gig economy was more on the fringe, where food delivery was primarily in the domain of fast food companies with their own delivery fleets or the logistics company dealing in the frozen variety. And MM Lee had good reasons to say ‘no’ – unemployment was a whooping 5.86% in 2009 and had come down to 4.12% in 2010. It would continue to fall over the next 3 years and continue to stay below 4% for the next 5 years. And I believe HDB itself would allow for financing facilities to support homeownership even for those self-employed or in contractual jobs.

The context of today is so completely different. The economy shifted and perhaps more importantly, home prices have increased perhaps by about 1.2-1.5 times (residential private property index now stands at 150% that of 2010; while that for HDB stands at 120%). Meanwhile, rental rates for both HDB (up 12% from 2010) and non-landed private property (up 3% from 2010) have not increased all that much. The culture and the economy co-evolves and influence each other.

In the past, the direction towards home-ownership was clear from the government perspective; and therefore home prices were kept low and affordable, criteria for allocation was stringent. The culture was aligned with the policy and reinforced by economic factors. In 2010, the attention of the government might be to create more stable jobs and to keep people employed so that they would eventually be able to become home owners. If you ‘deviate’ from the archetypical Singaporean that the government is seeking to serve, things might be a little harder for you.

10 years on, it would be unfair to use the words and perspective of MM Lee then to claim that the government has a mental block. The question is whether the government of the day is responsive in the right manner to the cultural context and the situation now. Is the leadership team overall working towards a general vision or having their own silo mission and stepping over the toes of one another? With the gig economy a reality and the willingness to keep ‘success stories’ like Grab in our economy, we must contend with the fact that transient sort of employment arrangements are here to stay. And if that is the case, where does the story about home-ownership really lie? Does it continue to fit into the economic realities of today? Are the prices in line with our goals and ideals (forget the nonsense about market setting the price – our market is small enough for the government to corner and control based on our policy objectives)? Is that still the story that HDB wants to continue perpetrating?

Note: The unemployment figures are from Statista while the property index figures cited here are obtained from SRX.