LECTURE BY MR MAH BOW TAN,
MINISTER FOR NATIONAL DEVELOPMENT AT THE LEE KUAN YEW SCHOOL OF
PUBLIC POLICY¡¯S SECOND ANNIVERSARY PUBLIC LECTURE ON THURSDAY, 17
AUGUST 2006 AT 12.00 PM
¡°Public Housing: Homes,
It is my honour and pleasure to be invited
here to speak to such a distinguished audience today. You are the
key policy makers and leaders in the public and private sectors from
about 30 different countries. You have come to the Lee Kuan Yew
School of Public Policy to learn with and from one another the art
and science of good governance, in order to make ¡°prudent, wise and
effective decisions that are in the public interest¡±. When Kishore
asked me to choose a topic for my talk, I asked myself: What would
be of interest to an audience like this? How do I add value to the
time we will spend together?
2 There is a Chinese phrase that says
there are four basic needs in our daily life: yi, shi, zhu, xing
(clothes to wear, food to eat, a roof over our heads, and some means
of transport). Even in today¡¯s world, satisfying these basic needs
remain a challenge for many governments. Indeed, this was so for
Singapore when we first became independent. Today, I would like to
tell you how we overcame one of these challenges, housing, how it
has played a major role in building communities and the nation, and
what lessons we can draw from it. In sharing our experience, I am
mindful that this is viewed from a Singapore perspective. You will
have to view it from your own perspective and unique circumstance.
3 For Singaporeans, public housing
provides more than just a roof over our heads. Our housing estates
are where eight out of 10 Singaporeans live and interact with their
fellow citizens. Public housing in Singapore is part of our
collective experience. By providing homes for our people and
ensuring that our communities grow cohesively, public housing plays
an important role in our efforts to build a nation.
The Beginning: History of
4 Let me start from the beginning.
Singapore gained self-government from Britain in 1959. Like all
young countries, we were faced with many problems.
5 One of the most pressing challenges
was an acute housing shortage. The majority of Singaporeans were
living in crowded squatter colonies, which lacked proper sanitation
and were fire hazards. The population was growing rapidly, with
immigration adding further stress on the housing shortage. The
squatter colonies expanded rapidly threatening to overcome the city
with each passing day.
6 The Government¡¯s immediate priority
was to build as many flats as possible in the quickest time possible
to solve this crisis. The Housing and Development Board or HDB as it
is affectionately called today, was set up in 1960 to tackle the
7 The first HDB Chairman was Mr Lim
Kim San. In the first five years of its existence, the HDB built
50,000 flats. This was a remarkable feat, considering that the
previous colonial Government had taken 30 years to build 23,000
flats. Within 10 years, the housing shortage was largely solved.
8 Mr Lim Kim San passed away last
month. Although he has many other contributions, Singaporeans will
best remember him as the architect of public housing, which is one
of the pillars of modern Singapore.
Public Housing Today
9 Today, 46 years after HDB was
established, there are almost 900,000 flats across Singapore, which
house 85% of Singaporeans. They come in different shapes and sizes
to suit the different income and lifestyle requirements of
Singaporeans. There are one and two room flats for lower income
families, Studio Apartments for the elderly, three and four room
flats for the middle income, and larger five room and Executive
flats for higher income households and extended families who want to
10 Today, nine in 10 Singaporeans own
their own homes, compared to less than 10% 40 years ago. We have
probably the highest home ownership rate in the world.
11 The flats are made affordable,
with generous government subsidies on both the selling price of the
flat as well as the loans to pay for it. Typically, a family needs
to pay less than 20% of their household income to service the loans.
12 To keep pace with Singapore¡¯s
development, HDB has improved the quality of public housing over the
years. New HDB precincts today are built with landscaped greenery,
multi-storey car parks, playgrounds and fitness corners. There is
easy access to MRT stations, neighbourhood shopping centres,
schools, and recreational and entertainment facilities.
13 Older estates are constantly
upgraded so that residents in these estates are not left behind, and
they too can enjoy facilities comparable to those in our newer
estates. We are currently in the midst of a massive nation-wide
programme to retrofit HDB blocks with lifts that stop on every
floor. This is to serve the needs of a rapidly ageing population.
Building Homes, Communities,
14 But right from the beginning, we
realised that public housing was not just about providing a physical
roof over our head. Singapore was a young nation, with people coming
from many lands to settle here. We had to get them to sink roots
here, and to develop a sense of belonging to the community and to
the nation. Our nation building and community bonding objectives
have shaped the design and development of our public housing
programme over the years.
Home Ownership: Creating a
Nation of Stakeholders
15 The cornerstone of Singapore¡¯s
public housing programme is our home ownership policy. Started in
1964, the Home Ownership for the People Scheme aimed to give
Singaporeans a tangible stake in the country and its future.
16 Minister Mentor Lee Kuan Yew gave
the rationale for this policy in his memoirs: ¡°I had seen the
contrast between low-cost rental flats, badly misused and poorly
maintained, and those of house-proud owners, and was convinced that
if every family owned its home, the country would be more stable¡ I
believe this sense of ownership was vital for our new society which
had no deep roots in a common historical experience.¡±
17 The home ownership flat provides
the incentive for Singaporeans to work hard to own a flat, and to
defend it. National Service (NS), the conscription of able-bodied
male citizens to serve in Singapore¡¯s military defence, would not be
possible if Singaporeans did not feel that they had such a tangible
stake to defend.
18 To help Singaporean families own
their flats, each household is eligible for various public housing
subsidies. Those buying a flat for the first time can choose to buy
a new flat from HDB at a subsidised price, or buy a resale flat and
enjoy a government subsidy of up to $40,000. Lower income families
are given an Additional Housing Grant of up to $20,000. This offsets
up to 30% of the cost of a two-room flat (approx. $65,000). To
finance their flat purchase, the Government also offers a mortgage
loan at a subsidised interest rate. To facilitate social mobility,
flat owners who are buying a bigger flat from their current flat can
get a second subsidised loan.
19 Besides contributing to the
stability of the country, home ownership has provided Singaporeans
with an asset and a store of value. In a recent survey, each HDB
household was estimated to have an average housing equity worth
20 This asset is closely linked to
the economic development of Singapore. It motivates Singaporeans to
work hard so that their flat can grow in value, and they can upgrade
to a better home. Most importantly, the possibility of upward social
mobility provides hope to people. Anyone who works hard can, with
some help, improve his life and that of his family.
Building Communities & the
21 Public housing also plays an
important role in building up the Singaporean identity and social
cohesion. HDB policies promote the mixing of households of different
races and income groups in our estates. There are racial quotas to
ensure a balanced mix of households of different ethnic groups in
each HDB block. Each precinct is built with flats of different sizes
so that households of different income and social profiles live
together. Common spaces and shared facilities such as playgrounds
and fitness corners facilitate interaction among neighbours.
Residents participate in managing their own HDB estate through local
Town Councils, Citizens¡¯ Consultative Committees or Residents¡¯
22 As the vast majority of
Singaporeans live in HDB flats, the common experience of HDB living
has become an emotional reference point. We are able to identify
with one another through the shared experience of eating in the
neighbourhood hawker centres, shopping at the neighbourhood shops
and wet markets, or schooling at the neighbourhood kindergartens and
schools. Each HDB town is in a way, a microcosm of Singapore, our
people and our way of life.
Strong Government & People¡¯s
Support for Public Housing
23 With the support of the people,
the Government has invested heavily in the public housing programme.
Today, close to 3% of the Government¡¯s annual budget, or about S$900
million in FY 2006, goes into public housing.
24 The success of the public housing
programme can be attributed to two important policies. One: the land
acquisition policy; and two: Central Provident Fund (CPF), the
compulsory savings scheme.
25 In the early years, in order to
assemble sufficient land at a reasonable cost, the Government had to
acquire private land for the development of new public housing.
Landowners were understandably aggrieved, but came to accept it when
they saw that their land was being put to good use, in the national
26 The CPF, a compulsory savings
scheme whereby up to 33% of a worker¡¯s salary is set aside by the
employer and employee, has enabled Singaporeans to fund the purchase
of their homes. Over 70% of Singaporean HDB flat owners today are
able to service their housing loans from their CPF account without
the need for cash top-up. The Government also borrows funds from the
CPF Board to offer housing loans to flat-buyers at concessionary
Lessons from the Singapore¡¯s
27 I have sketched the outline of
Singapore¡¯s public housing programme. Let me now summarise what I
believe are the key lessons from our experience. There are five
a. Importance of home ownership
b. Comprehensive town planning and design
c. Continuous renewal and rejuvenation of towns
d. Focus on building communities
e. Forward-looking and responsive housing policies
Lesson 1: Importance of Home
28 When HDB was formed in 1960, the
original intention was to build flats for rental. However, soon
after, the Government decided to help residents to buy over their
29 By owning their flats, HDB
residents are more likely to take care of their property and their
environment. This in turn helps to preserve their asset value. More
importantly, owning a home has given the vast majority of
Singaporeans a tangible stake in the country, something to protect
and defend. The home ownership scheme has therefore contributed
significantly to our nation-building effort.
Lesson 2: Comprehensive Town
Planning and Design
30 HDB estates are fully integrated
and self-contained towns with the full range of commercial,
educational, recreational, transport and other communal facilities.
These facilities and infrastructure are planned for way in advance.
31 HDB residents not only live in
their HDB flats. Their children also go to schools in the
neighbourhood. They can catch up with friends at nearby coffee shops
or stroll with their families in the neighbourhood parks. This
encourages residents to interact and live as active communities.
32 HDB towns are also connected to
other parts of the island, by mass transit rail services,
complemented by ready access to bus services and major highways.
Lesson 3: Continuous Renewal
& Rejuvenation of Towns
33 Public housing has often been
associated with slums and poor social conditions. This in turn
breeds neglect, fear and despondency. That is why we have taken a
lot of trouble to maintain our HDB estates in good condition, to
prevent them from degenerating into slums. There are various
programmes to renew and rejuvenate existing towns to bring the
physical environments of older HDB precincts and flats to the
standards of new estates e.g. providing lifts on every floor, and
building new facilities like playgrounds, parks and fitness corners.
Old blocks are also replaced by new developments where possible.
This helps to slow down the outflow of younger residents from older
estates, and sometimes even reverses the flow. Such physical
upgrading policies also help to preserve and enhance the value of
older HDB flats.
Lesson 4: Focus on Building
34 The fourth lesson from Singapore¡¯s
public housing is our focus on building communities. When you walk
around our HDB estates, you will notice that each one is like a
¡°mini-Singapore¡±, with people from various socio-economic
backgrounds, different races, religions and cultures, all living
together . This did not happen by chance, but was the result of a
conscious effort, through the way we design our public housing and
formulate our policies.
35 At the physical level, we design
HDB blocks to provide many opportunities for residents to meet and
interact, such as at the void deck, fitness corners or children¡¯s
playground. We also have a mix of different flat types within each
block and on each floor to minimise social stratification.
Landmarks, landscaping and special architectural features help to
demarcate boundaries and create a stronger sense of identity for
each neighbourhood and town.
36 At a social level, our public
housing policies foster family ties. For example, those buying a new
flat to stay near their parents or children enjoy priority
allocation over other applicants.
37 We also carefully manage the
ethnic balance in our housing estates through the Ethnic Integration
Policy (EIP). The EIP was implemented in 1989 to promote racial
harmony in HDB estates by preventing the formation of racial
enclaves. Under the EIP, the ethnic proportions in each
neighbourhood and block are subject to quotas, to ensure a balanced
mix of residents of different races.
38 Although the EIP has caused some
difficulties for those who wish to sell their flats in the secondary
market, Singaporeans accept that it is for the greater good. There
are too many examples around the world today of racial tensions and
conflicts which had their roots in the racially segregated ghettoes
and slums of their cities. Once racial enclaves are formed, people
of different races do not have opportunities to interact, and
mistrust and misunderstandings flare up easily.
39 A recent article in the New York
Times talked about how British Muslims are feeling a sense of
alienation, of being torn between competing identities. This problem
of non-integration is also experienced in other European countries,
sometimes with dire consequences. According to some reports, the
riots in Paris last year was due to the frustration felt by African
immigrants, who had settled down in large numbers in certain
low-cost public housing areas of Paris. They felt disconnected,
physically and emotionally from the mainstream. We have followed a
deliberate policy of integration, to build a multi-racial framework,
in our HDB estates, our schools and our work places. Our conscious
shaping of public housing programme has enabled us to maintain
racial harmony and social cohesion, despite the diversity of our
population. This has been critical to Singapore¡¯s national
Lesson 5: Forward-looking &
Responsive Housing Policies
40 Lesson 5 for Singapore is the need
for public housing policies to never be stagnant, but to always be
forward-looking. For example, allowing CPF funds to be used to
service their housing loans, as well as pay for rejuvenating older
HDB estates, has created a virtuous cycle and sustained the success
of our public housing programme.
41 In addition, our policies need to
move with the times, even as our population changes and its
expectations shoot up. HDB started off building functional basic
low-cost flats for the masses. After meeting the basic housing
needs, it concentrated on building higher quality flats with more
varied designs and better finishes. Today, HDB is challenging itself
to create homes that will appeal to a new generation of better
educated and more sophisticated Singaporeans.
Key Challenges for the Future
42 Let me now discuss the key
challenges for Singapore¡¯s public housing programme moving forward,
a. Ageing population
b. Widening income gap
c. More diverse population
Challenge 1: Ageing
43 The first challenge is the
demographic shift brought about by our ageing population. Between
now and 2030, the number of elderly aged 65 years or older will
increase dramatically, from 300,000 to 900,000. 1 in 5 Singaporeans
will be aged 65 and above by 2030.
44 We will need to provide a wide
range of housing options to meet the different financial needs and
lifestyle preferences of the elderly, from smaller HDB flats like
studio apartments, to private retirement housing with dedicated care
45 One key concern of the elderly
will be retirement adequacy. We have put in place various options to
help retirees who are asset-rich but cash-poor monetise their assets
for retirement. These include allowing them to sublet their flats to
earn extra income or to cash out of their existing flats and move to
smaller ones. Banks and financial institutions can also offer
reverse mortgage schemes for HDB flats. HDB must continue to look
into other options to provide our elderly residents with sufficient
financial means to lead fulfilling lives in their retirement years.
We will also have to make adjustments to our physical environment,
so that it is elder-friendly. Massive investments will be made to
provide lift access on every floor of HDB blocks and to make the
environment barrier-free to facilitate mobility. We have also
redesigned all new HDB flats to make it easier for the elderly and
wheelchair-bound residents to move about.
Challenge 2: Income Divide
46 With globalisation and competition
from lower cost countries, the wages of lower-skilled Singaporeans
is under pressure. Our second major challenge is keeping public
housing affordable to the vast majority of Singaporeans, so that we
can continue to bring people of different socio-economic groups
47 The Government has committed that
up to 90% of Singaporeans can afford to buy a basic HDB flat. To
fulfil this promise, HDB has resumed the building of smaller flats
to provide more affordable housing options for the lower-income
group. It has also introduced additional housing subsidies to help
them to buy a flat.
48 However, there will always be some
lower-income households who cannot afford to buy a flat. For this
group, HDB will provide rental flats at a subsidised rate to provide
them with a roof over their heads.
Challenge 3: More Diverse
49 The last challenge is how to
strengthen our social and community ties. As our population becomes
more diverse and cosmopolitan, as more Singaporeans live, work or
travel overseas, it will become even more important to leverage on
public housing to broaden the common space between Singaporeans and
promote rootedness to Singapore.
We need to engender a greater sense of ownership among the
residents. Over the years, we have relaxed our policies to make
public housing more akin to private housing, through the relaxation
of some of the rules on sub-letting of flats, loans etc. We need to
find ways to deepen this sense of ownership.
50 Singaporeans are also becoming
more affluent and better educated. To meet rising aspirations, we
have involved private sector architects to design and build HDB
projects. This has given rise to several innovations in public
housing design. A premium design project, the Pinnacle@ Duxton, with
sky bridges on the 26th and 50th stories connecting the 7 blocks of
the development, is currently under construction. This project will
bring many new and younger residents into Chinatown, and rejuvenate
an old part of Singapore.
51 We are also piloting another
scheme to allow private developers not only to design and build, but
also price and sell the flats to HDB buyers. With additional
flexibility to design and price the flats, I hope developers will
introduce further innovations in public housing design and
52 Over the last 46 years, Singapore
has successfully created a home-owning society under our public
housing programme. This basis of home ownership, buttressed by
strong political commitment, careful planning and community-focused
policies, has played an important part in Singapore¡¯s nation
53 Looking ahead, I expect public
housing will continue to play an important role in shaping
Singapore¡¯s social fabric. Our public housing policies will have to
evolve, not only to respond to the changing needs of the people, but
also in support of national strategies.
1. Source: Home Ownership
and Equity of HDB Households 2003, published by DOS in Oct 05.
www.mnd.gov.sg News 17 Aug 2006