How the HDB’s Insistence on Home Ownership Quietly Burdens Singapore’s Poor

In 1960, the newly-established Singaporean state assembled the Housing and Development Board (HDB) as one of its first acts of self-governance[1], which today has managed to achieve a whopping 90% homeownership rate[2]. However, despite this world-renowned success, what remains hidden from the public eye is the significant minority of low-income Singaporeans who are pushed through the cracks by a system that prioritizes normative homeownership above a social safety net for those who need it most. In what follows, I will examine how Singapore’s housing system, as understood through the writings of Ronald Dworkin, is actually much less egalitarian than it appears.

Singapore: The Homeowner State

Over the decades, the importance of homeownership in Singapore has been emphasized through both overt and covert means. In its beginning years, Lee Kuan Yew constantly capitalized on the HDB’s rapid success as a way of sustaining political support, arguing that “no country in the world has given its citizens an asset as valuable[3].” Even as this propaganda cooled down over the years, the homeownership identity became ingrained in the Singaporean consciousness through the co-institutionalization of housing and family life – one marries their partner in order to qualify as a homeowner, and continues to accumulate various stipends over the years for having successfully fulfilled the state’s ideal of a heteronormative nuclear family[4].

In recent times, the HDB has also been phasing out the construction of one- and two-room rental flats in an attempt to quietly push Singaporeans towards ownership of three-, four-, or five-room flats instead. As it is, one’s household income must be extremely low, below S$1500, to even be permitted to live in public rental flats[5] – a threshold met by less than 10% of the population[6].

“The Average Citizen”

To onlookers, Singapore’s strong push for homeownership is perhaps justified by HDB’s widely-recognized success for making the practice relatively affordable, especially when most other major global cities have failed to do the same[7]. On the technical level, this mass affordability boils down to two main factors – government-subsidized housing prices and a mandatory national-savings scheme called the Central Provident Fund (CPF), into which all working Singaporeans must deposit 20% of their monthly salary (and employers a further 17%)[8]. In tandem, these factors work to ensure that the average citizen can use their CPF savings to pay for the cheap mortgages provided by the HDB without ever having to make a dent on their disposable income.

However, it is easy for us to skirt over what is meant by the average citizen, a buzz phrase that is so often thrown around in discussions of efficacy, as I have done so above. The median income of two-earner households in Singapore stands at around S$9400[9] – so when the HDB reports that most first-time homeowners have to spend no more than a quarter of their collective income on monthly mortgage[10], it is this very socio-economic stratum they are referring to. Thus, for such citizens (and those who are even more well-off), Singapore’s housing system works wonders – it is a minor payment that comes out of their CPF on a monthly-basis without their even noticing. But in looking at sheer statistics, what we often forget is the subclass of citizens who fall well below this average. In reality, low-income Singaporeans carry the invisible burden of Singapore’s insistence on homeownership, finding themselves financially crippled in attempts to fulfill this state ideal.

Low-Income Labor is Essential Labor, Too

As far as classic egalitarian thinkers are concerned, the logic of Singapore’s system of provisions is very similar to that outlined by Ronald Dworkin, who believed in establishing a society-wide equality of resources. The idea behind having an equality of resources, according to Dworkin, is to organize society in a manner that gives everyone sufficient and equal means to explore their own values and preferences[11]. Thereafter, it is each individual’s prerogative to expend these resources as they please.[12]

In the Singapore context, nowhere is this Dworkinian mindset more apparent than in the state’s attitude towards low-income earners. By setting up each and every Singaporean with CPF accounts and highly-subsidized housing prices (not to mention subsidized education and healthcare, too), the state views itself as having effectively established a robust equality of resources – after which all individuals are free to use these resources to carry out life decisions that are entirely their own. Thus, if a Singaporean were to (1) fall short of achieving a profitable life ambition[13] or (2) become permanently injured or terminally ill without having purchased the proper insurance to mitigate against this[14], the state would not assume responsibility for what they consider to be consequences of individual choice.

In reality, both of the above scenarios are relatively common – even in Singapore. After all, in every society, (1) someone has to perform the low-income jobs, (2) and not everyone is financially stable enough to insure themselves against bad luck without sacrificing a more immediate/pressing need (eg. putting food on the table, paying for one’s mortgage). Yet, despite the common understanding that scenarios (1) and (2) are rampant amongst low-income Singaporeans, the state’s equality of resources argument seems to hold firm. In other words, although low-income individuals serve essential productive functions within Singaporean society – as cleaners, maintenance workers, and service staff alike – any financial struggles they may face are their own responsibility, because the state has already done its job by providing them with an extensive baseline of provisions.

Low-Income Earners vis-a-vis Housing

This attitude is especially acute with regards to the housing system. The idea is that the state’s extensive provisions should make homeownership seamless and affordable – and for those who earn within the threshold of Singapore’s S$9400 median household income, it certainly is. After all, the average mortgage for a three-room HDB – the cheapest homeowner option – stands at just S$750-1000 per month[15],[16]. For the bottom 20% of two-earner households in Singapore, however, such a payment would constitute almost half their monthly income[17]. This is an alarming statistic that is perhaps indicative of a well-hidden housing struggle, much in contrast to the narrative of affordability perpetuated by the state.

What, then, becomes of low-income earners in a nation that expects all its citizens to become homeowners regardless of socio-economic circumstance? For one, many low-income Singaporeans have found themselves hustling their way through mortgage payments with the help of bank loans and what limited social support they can get from Voluntary Welfare Organisations and Family Service Centres. On top of their personal and professional obligations, such processes are emotionally-taxing, and the types of questions asked by social workers when appealing for extra aid can be humiliating[18],[19] – serving as a reminder that they are unable to afford what most citizens can. While most low-income households manage to make it through the month, a select few unfortunately fall through the cracks. In fact, in 2018, Singapore saw 156 mortgage defaults in total – more than double the 65 cases seen in 2015[20].

Another option low-income earners may resort to is renting, even though the Singapore government has been actively trying to transition away from it. As a result, not only are tenants restricted to one- or two-room flats, leaving large low-income families with no choice but to live in overcrowded conditions – but they are also subject to poor ventilation, run-down utilities, and outdated recreational facilities due to the government’s intentional neglect of rental living standards[21],[22],[23].

Lastly, low-income homeowners who at some point find themselves in a state of financial precarity may be forced to liquidate the value of their HDB flat[24] – for instance, by selling it off and moving in with their kids, or by opting for low-quality rental housing instead. However, to undergo a change as drastic as downgrading one’s shelter, especially during one’s retirement years, can be an anxiety-ridden experience – particularly for those who lack familial support and financial literacy.

What links the above scenarios together is the fact that they are all created by a system from which there is no escape. While other countries allow for a diversity of low-income housing options – from informal settlements and non-familial cohabitation to robust rental and private markets – low-income individuals in Singapore are confined to the norm of homeownership perpetuated by the HDB, which has a decisive monopoly on the housing market.

Thus, a system that at first glance appeared to be egalitarian is unraveled through the manner in which it oppresses the poorest of the poor. In fact, there is something rather insidious about this idea of holding all members of society to the same standard when a significant minority find themselves jumping through hoops just to meet it. As far as future policy is concerned, therefore, we should ask ourselves – is it a matter of Singapore loosening its insistence on homeownership, or should the state see to it that every citizen is paid wages that are high enough to achieve it?

The Way Forward?

Understandably, a question of such epic proportions is one that any government so secure in the résumé-like success of its existing ideologies would be reluctant to answer – which would explain why long-suggested policies like housing insurance and a progressive tax on capital are still outside the government’s realm of consideration. However, if Singapore claims to respect all its citizens as productive elements of society – whether they are skilled or not – then it is perhaps high-time that the nation’s basic policy foundations reflect this, too.

 

Works Cited

Chua, Beng Huat. “Financializing public housing as an asset for retirement in Singapore.” International Journal of Housing Policy 15 (1): 27-42, 2015.

Dworkin, Ronald. “What is Equality? Part 2: Equality of Resources,” Philosophy and Public Affairs, 10 (4): 283-345, 1981.

“Families’ Commitment, Courage to Become Self-Reliant Critical.” The Straits Times, 1 July 2018, www.straitstimes.com/forum/letters-in-print/families-commitment-courage-to-become-self-reliant-critical

“How to Pay off Your Mortgage without Stress.” DBS: Live More, Bank Less, www.dbs.com/livemore/life-hacks/how-to-pay-off-your-mortgage-without-stress.html.

“Key Household Income Trends, 2019.” Department of Statistics Singapore, 2019.

Khye, Chionh Chye. “Commentary: Many Ways to Make a House a Home but No Easy Fixes to Housing Vulnerable Families.” Channel News Asia, 19 Aug. 2018, www.channelnewsasia.com/news/commentary/99-year-hdb-flats-poor-families-poverty-inequality-singapore-10618224.

King, Yu Yen. “How Existing Social Welfare Policies Cater to the Needs of the Very Low Income.” Beyond Social Services, 2016.

Kok, Xinghui. “Singapore’s Worrying Trend of Homeowners Defaulting on Mortgages.” South China Morning Post, 24 Nov. 2019, www.scmp.com/week-asia/economics/article/3031626/singapores-worrying-trend-homeowners-defaulting-mortgages.

Lim, Jun Jie Gabriel, et al. National University of Singapore Lee Kuan Yew School of Public Policy, 2019, “Public Rental Housing in Singapore – A Last Resort?”

Low, Augustine. “When the HDB Story Comes Undone, What Is the Collateral Damage to the PAP Story?” The Online Citizen, 25 Aug. 2018, www.onlinecitizenasia.com/2018/08/25/when-the-hdb-story-comes-undone-what-is-the-collateral-damage-to-the-pap-story/.

Phang, Sock Yong. “Home Prices and Inequality: Singapore versus Other ‘Global Superstar Cities’.” The Straits Times, 19 Jan. 2016, www.straitstimes.com/opinion/home-prices-and-inequality-singapore-versus-other-global-superstar-cities.

“Resident Households By Tenancy, Annual.” Department of Statistics, 31 July 2019.

Teo, Youyenn. “Let’s Talk about Meeting Needs, Not Just Equality of Opportunity.” The Straits Times, 29 May 2018, www.straitstimes.com/opinion/lets-talk-about-meeting-needs-not-just-equality-of-opportunity.

“‘Typically Singaporean:” Producing Singaporean Society.” Neoliberal Morality in Singapore, by Youyenn Teo, Taylor and Francis, 2010, pp. 41–75.

“Up to $9,910/Month for the Cost of Living in SG? Time to Ask for a Raise.” Better Trade Off, 30 Oct. 2018, www.bettertradeoff.com/up-to-9910-month-for-the-cost-of-living-in-sg-time-to-ask-for-a-raise-2/.

“Why 80% of Singaporeans Live in Government-Built Flats.” The Economist, The Economist Newspaper, 6 July 2017, www.economist.com/asia/2017/07/06/why-80-of-singaporeans-live-in-government-built-flats.

[1] “Why 80% of Singaporeans Live in Government-Built Flats.” The Economist.

[2] “Resident Households By Tenancy, Annual.” Department of Statistics Singapore.

[3] Low, Augustine. “When the HDB Story Comes Undone, What Is the Collateral Damage to the PAP Story?” The Online Citizen.

[4] “‘Typically Singaporean:” Producing Singaporean Society.” Neoliberal Morality in Singapore, by Youyenn Teo, p.65

[5] Lim, Jun Jie Gabriel, et al. “Public Rental Housing in Singapore – A Last Resort?” Global-Is-Asian 2019, p.8

[6] “Key Household Income Trends, 2019.” Department of Statistics Singapore, p.38

[7] Phang, Sock Yong. “Home Prices and Inequality: Singapore versus Other ‘Global Superstar Cities’.” The Straits Times.

[8] “Why 80% of Singaporeans Live in Government-Built Flats.” The Economist.

[9] “Key Household Income Trends, 2019.” Department of Statistics Singapore, p.1

[10] “Why 80% of Singaporeans Live in Government-Built Flats.” The Economist.

[11] Dworkin, Ronald. “What is Equality? Part 2: Equality of Resources,” Philosophy and Public Affairs, p.284-5, 289

[12] Ibid, p.288

[13] Ibid, p. 290-1, 322

[14] Ibid, p.294, 296-8, 322

[15] “How to Pay off Your Mortgage without Stress.” DBS: Live More, Bank Less.

[16] “Up to $9,910/Month for the Cost of Living in SG? Time to Ask for a Raise.” Better Trade-Off.

[17] “Key Household Income Trends, 2019.” Department of Statistics Singapore, p.38

[18] “Families’ Commitment, Courage to Become Self-Reliant Critical.” The Straits Times.

[19] King, Yu Yen. “How Existing Social Welfare Policies Cater to the Needs of the Very Low Income.” Beyond Social Services, p.6-7

[20] Kok, Xinghui. “Singapore’s Worrying Trend of Homeowners Defaulting on Mortgages.” South China Morning Post.

[21] Lim, Jun Jie Gabriel, et al. “Public Rental Housing in Singapore – A Last Resort?” Global-Is-Asian 2019, p.10-13

[22] Khye, Chionh Chye. “Commentary: Many Ways to Make a House a Home but No Easy Fixes to Housing Vulnerable Families.” Channel News Asia.

[23] Teo, Youyenn. “Let’s Talk about Meeting Needs, Not Just Equality of Opportunity.” The Straits Times.

[24] Chua, Beng Huat. “Financializing public housing as an asset for retirement in Singapore.” International Journal of Housing Policy, p.30

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Articles were originally submitted as course papers for Professor Sandra Field’s classes Contemporary Egalitarianism and Democratic Theory.

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