Doing housing right

Just got back from spending the Christmas holidays with my son and his family in Singapore. Every time I visit this remarkable city state, their public housing program never ceases to amaze me. Yes, they have very expensive condo developments too but apparently, no Singaporean is left homeless. And Singapore’s public housing developments are clean, well built, well planned and with amenities for residents to have a life.

An academic in our Viber Group who lived in Singapore for many years observed that “the Singapore model works because 1) people have jobs; 2) there is mandatory savings scheme to pay for downpayment and loan repayment; 3) it is a public housing scheme and government controls cost of land and construction; the government being the land owner and monopsony buyer; 4) credit is made affordable (less than two percent); 5) government caps loan servicing to max 30 percent of household income; 6) housing is a political public good.

“More generally, the ruling party (PAP) has tied its fortunes to the provision of affordable, high-quality public goods - education, healthcare, transport, public safety, competent civil service and zero tolerance for corruption.  PAP is one of the longest reigning political parties in the world.”

All those factors make a difference. Back here, our public officials think of public housing more in terms of constructing cheap housing units that potential beneficiaries often reject. Look at those ugly public housing buildings along the railroad tracks near the Paco station on the South Superhighway. Terrible eyesores. I grew up in the Paco-Pandacan area where they built the Bagong Barangay Housing project, a high-rise slum. But that was 70 years ago and I haven’t been there since.

I read an article in The Architectural Review by Calvin Chua who “grew up in a three?room public housing apartment in a working?class neighborhood in Singapore… With more than five people living in a 65-square meter space, the communal corridor that connected apartments in the slab block became a natural extension of my family’s living room…

“Public housing is developed by the government through its statutory Housing & Development Board (HDB) and sold to citizens at prevailing land and market prices with the provision of government grants. With over 80 percent of its citizen population living in public housing, and around 90 percent of these residents owning their apartments, this ‘public housing home ownership’ model has been the cornerstone of Singapore’s nation?building efforts since its independence in 1965.

“In Singapore’s public housing, homeownership is preferred over renting. This is based on the assumption that tenants will not take interest in the long?term value of a rental property, while homeowners take responsibility for the maintenance of their homes. To help citizens buy a flat, the state has a mortgage system in place which is managed by the HDB and financed by the Central Provident Fund (CPF), a form of individual social security system. While it is possible to opt out of the state mortgage system, most homeowners use it as the default financing system…

“The public housing system is often considered the crowning achievement of Singapore’s socio-economic policy. During the first waves of construction, the objective of public housing was mainly to provide homes to citizens at affordable prices. However, asset appreciation policies made their way into government in the early 1990s, a part of the global neoliberal wave of that time.

“A slew of measures was implemented to liberalize the purchase of resale public housing flats. This had an impact on the price of new flats, as the prices are pegged to rising land costs and a percentage of the market value of the resale flats. In addition to this, the HDB design group was also privatized (though it is still owned by a state?run sovereign wealth fund).

“A general narrative around asset appreciation quickly formed and, along with it, an expectation that housing prices would continually rise, and that residents would have to liquidate their public housing properties as additional savings for retirement. As a result, today, the government is caught between a rock and a hard place. It has to ensure the value of property does not decrease for older homeowners, while ensuring affordability for young homeowners.”

Singapore’s public housing concept is based on the idea of providing affordable, high-quality housing in self-contained communities with essential services and amenities. Owing to its limited space, public housing in Singapore is typically high-rise, high-density, and located near public transportation routes.

I remember Gina Lopez getting her family to help provide the amenities including constructing school buildings in NHA’s relocation area in Calauan, Laguna. The squatters living along the Estero de Paco were moved there as part of a project to clean the Pasig River and its tributaries. It didn’t quite work because Calauan was far from employment or livelihood possibilities they are familiar with.

Our government has neglected public housing through the years. BBM announced an ambitious program to build one million housing units a year or six million during his term. But the goal has been trimmed down to half because as NEDA’s Arsi Balisacan said, there are other urgent uses of public funds. Like congressional pork barrel perhaps?

Squatter communities are all over Metro Manila and in other major urban centers. Housing was left to the tender mercies of the private developers who have proven themselves unimaginative and greedy. They concentrated on cookie-cutter condos and are now being punished. Colliers Philippines director for research Joey Bondoc told PNA it will take 5.8 years to fully dispose of the unsold inventory of condominium units.

Singapore’s experience showed a successful housing program must take care of all the details from construction to finance to sociological factors, not building substandard units in out-of-the-way places like we do. NHA can’t deliver because its corruption is legendary. Unfortunately, that’s our usual sad story.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco.