Affordable homes for citizens
City state's successful system vastly differs from Hong Kong's, writes Tara Loader Wilkinson
Singapore has pioneered how public housing, or Housing and Development Board (HDB) flats, can benefit locals without creating a financial burden. The system is credited with clearing Singapore's slums of the 1960s, allowing low-paid workers a chance to live in state-built housing for a fraction of the cost. Today, Singapore's HDB flats house around 82 per cent of Singaporeans and are considered a model for modern government.
An HDB home helps young families to own their own home and provides a stepping stone to upgrade - after five years, they can sell the property to a permanent resident and pocket the profit. It's also another way to improve family formation - Singapore's fertility rate is below the global average at 1.29 births per woman, and the government hopes to push this figure to 2.1.
Could Hong Kong ever re-create Singapore's success with public housing to address these problems? Hong Kong and Singapore have many similarities - both are urban cities and globally competitive economies with high levels of foreign workers, an ageing demographic, low fertility rate, scarce land and an extreme wealth gap.
But Hong Kong took a different approach than Singapore on public housing, and now is paying the price, with images of low-paid workers forced to live in cramped "cage" homes that have horrified the world. Even though Hong Kong does provide some subsidised housing, there is a three-year waiting list, according to the city's Housing Authority, and residents have to be extremely poor to qualify. Subsidised units rent for around HK$1,500 per month, and are available for a household of two or more earning up to HK$10,000 per month.
"Hong Kong, contrary to Singapore, has chosen to optimise public-rental housing, which 30 per cent of the population uses," says Sean Tan, Singapore general manager and chief business development officer of iProperty Group. "Subsidised home ownership flats serve 17 per cent of the population. Prices for private homes are very high, considerably higher than a comparably sized property in Singapore. Despite measures to cool the Hong Kong residential property market, a huge portion of the middle class still cannot afford public housing."
The question is, could Hong Kong at this stage change its housing model to emulate its Asian neighbour?
