The lofty goals of the early days of self-government in which it
saw itself as being responsible to resolve the challenges posed by
the poor in Singapore, it organised itself to "ensure economic growth for
employment" and assumed "a
major role in determining the production and consumption of housing
that is to provide affordable and inclusive housing to the lowest
income residents".
Since the 1960s, land for development was continuously acquired
from squatters and private land owners - even from those with long
term or free hold lease - and given BELOW MARKET RATE
compensation.
Public Housing in the early 1960s had met with the social and
political objectives of providing cheap public housing to
accomodate the 'rootless' and 'homeless' Singapore population -
still having a 'migrant
mentality'.
Selling Prices of those early built HDB 2, 3 and 4-Rooms Units
built in the 1960s reflected close to their construction costs; and
one could probably input that at least 3 to 5 per cent margin were
added for cost of public funds used, and another 5 to 10 per cent
margin to cover administrative costs.
Can we ever figure how much is the cost of public housing ?
Yes, to a certain degree, if we look at the Government Gazette that
prints out the results of public tenders for the various phases of
contracted works to complete a township, or a block of flats.
This will still require a meticulous formula to apportion costs
from the various public tender prices that have been
gazetted.
Unfortunately, no one from the NUS has actually make any attempt to
publish such research efforts, or if any had been done - it will
probably be hushed to prevent any controversial outcry at the clear
and undeniable truth.
Based on actual events that had transpired, somehow and some
timelines along the road towards progress and wealth creation
during the 1980s to 1990s, Public Policies seems to have taken a
different direction with a new set of factors to be
considered.
During this period, after twenty years of successful public housing
program, it seems that more Singaporean HDB Dwellers were
upgrading, and buying privately developed condominiums built with
the same 99 year lease.
These HDB 'Upgraders' were
able to make a neat profit with the resale of their HDB units in
some 'choice townships' with mature amenities and social
infrastructure, and had the easy opportunity to increase their cash
holdings through resale.
It will seem that the Government realised the revenue making
potential and the resourcefulness of Singaporeans, and from the
early 1980s, Public Housing prices began an upward trend despite
the massive economies of
scale that the HDB had in the infrastructure and resources
that it created to meet its building program.
An extract of the research papers from the
Department of Real Estate, NUS reads as follows:
"In Singapore, the public resale
housing market is an active second-hand housing market, whereby
previously subsidised new public housing units were being
transacted at market prices. In contrast to the private housing
price determinants that have been identified in the international
literature, the
prices of public resale housing in Singapore are largely determined
by public policies rather than by economic variables. This
paper provides some empirical evidence on how and to what degree
public housing policies affected the price dynamics of public
resale housing in Singapore during the 1990s. The findings have
additional implications of the wider consequences of public
policies on the prices of private housing
units."
From the trends observed over the years, the Singapore Government
takes the view that if the Private Sector makes money from any item
that it has created, the Government is entitled to take an
immediate cut of the profit and not wait till the end of the
transaction when annual tax is collected.
This can be seen from the HDB resale policy, where the HDB demands
that a percentage of the sales price be returned to HDB if the
concluded sales price is above HDB valuation.
With large scale private projects, the Government will impose
Development Charge on the Private Developers, as they are seen to
make hefty profit from the piece of vacant land on which the
projects are built on - refusing to realise that the profit will
depend on the continuing favorable market conditions at the end of
the construction.
Are HDB prices today based on costs, on based on the benchmark of
similar private developments, and from the thresh-hold of pain that
Singaporeans can bear ?
Is it any surprise that we have a new problem created by the greedy
public policies, which leaves the retired Singaporeans to be
'asset rich, but cash
poor' ?
