What the world can learn from Singapore’s safe and squeaky-clean high-rise housing projects

November 22, 2012
November 22, 2012

SINGAPORE— American cities such as Chicago and Washington, DC have razed high-rise public housing projects in the belief—supported by studies—that they encourage crime. In Singapore, the government thinks they’re a good thing. The Asian city-state’s Housing Development Board, which plans and develops municipal housing, keeps building new ones.

And indeed, Singapore’s tower block estates seem clean, peaceful and crime free.  It’s not a question of architecture. Aside from the palm trees in the communal gardens and lining the main road outside, the Chin Swee Estate in Singapore’s Chinatown looks like most housing projects built across the US and Europe in the 1960s. It is a collection of tall towers built around a recreational area with shops on the ground floor.

But there is a key difference. Not only are the pavements sparkling clean. The childrens’ playground is spotless and brightly painted, and looks brand new. There is no sign of gangs, crime or graffiti. Some residents have leaned their bikes up against trees, unlocked.  Old people clearly feel safe. A number of them are lounging on benches in the communal patio area. A couple of old men  are fast asleep, with their bags next to them on the benches, unguarded.

“Oh yes, we have some crime,” says a middle-aged Chin Swee resident who declines to provide her age or occupation and only gives her surname, Liong. (The Singaporean government censors the media and residents are often fearful of speaking with journalists.)

“About two months ago, a boy stood on the balcony and threw an open can of beer down onto the ground,” Liong says. “Terrible, just terrible.”

Ownership, policing, mixing

One reason things are so orderly is home ownership. More than 90% of Singaporeans in public housing own the apartment they live in. (People earning less than SG$1,500 (US$1,230) a month are allowed to rent instead.) The government subsidises the cost of new homes, and buyers can get loans from the Housing Development Board, along with a 10% down payment. At the moment, Singaporeans with family income of less than SG$10,000 a month qualify for an apartment. Vincent Tan, a 55 -year-old living in Chin Swee, who works on a ship repair crew, says, “because we own our homes, we look after them.”

Another is probably the city-state’s social controls. Singapore is a heavily policed society. One political party, the People’s Action Party, has been in power since 1959. The media is censored and the law permits “arrest and virtually unlimited detention of suspects without charge or judicial review,” according to Human Rights Watch. Various crimes command a caning as a mandatory additional punishment. At Chin Swee on the Tuesday evening I was there, two uniformed policemen patrolled the estate’s communal areas all night. They did not have much to do. At one point, they told an elderly man who had fallen asleep outside the supermarket with an empty bottle of the local Tiger beer next to him to get up and return to his flat. He dutifully shuffled home.

Also, Singapore’s public housing estates are mixed-income developments. This is something the US is now tilting towards. Chicago has torn down crime ridden projects and moved residents into mixed-income developments. The plan is to get the poor and the well-off living cheek by jowl in a mixture of market-rate and subsidised homes.

Singapore’s public housing has always been mixed-income. Around 80% of the city-state’s population lives in Housing Development Board apartments, commonly known as “HDB  flats”. (They use British English here.) A British stockbroker who said he did not want to be named discussing Singaporean affairs, says “most of my team live in an HDB.” An income of SG$10,000 a month is considered middle class. Chin Swee houses people with a range of incomes too. One of the shops on the estate is a branch of Merida, a Taiwanese chain selling upmarket bicycles.

A delicate balance…

However, not all the residents like where they live.  “We Singaporeans all aim not to live in an HDB,” says a man drinking Tiger with friends at a makeshift bar comprising trestle tables and low plastic stools at a food court opposite Chin Swee. The man, who gives him name as Daniel and says he is 54, adds, “Of course we all want to live in a high class condo.” Another middle aged man in the group, who does not give his name, interjects, “we live here because we have no choice.”

Singapore’s public housing scheme is carefully calibrated to ensure home loans are affordable. Vincent Tan says he paid off his mortgage when he was 43. “I bought my flat when I was 23,” he says. “The first loan repayments were SG$200 a month, and my income at that time was $SG800 a month, so I never had problems paying.” As this table of prices, subsidies and monthly payment rates for a new public housing development shows, the payments on a 30-year loan are likely to be around a fifth to a quarter of gross household income.

And not just anyone can get a loan. Only Singapore citizens qualify for the subsidised housing. They often have to wait three or four years for a home. And there are ethnic quotas to be met. The government carefully engineers a mix of ethnicities in housing estates. Some say it’s to prevent enclaves of Malay-origin Muslims becoming ghettoised and radicalising. To try and keep housing affordable, the Housing Development Board is rapidly building new projects and says on its website that 2012 has been a record year for new home sales.

As a result, the price gap between subsidized housing and the open market is getting very wide. Foreigners, who can’t get a subsidy, and Singaporeans who don’t want to wait the three to four years for a subsidized home, must buy public housing on the resale market. These are older flats that their owners have decided to sell, and they have become popular investments for wealthy residents.

Boosted by low interest rates and demand from mainland Chinese buyers, who have been parking cash in Singapore real estate even though they are not officially allowed to take it out of their home country, the city’s private home prices are soaring (paywall). In September a 17-year-old, 1,615 sq ft (150 sq m) HDB flat went for a record SG$1 million (paywall)—cheap by the standards of some big cities, perhaps, but new, subsidized flats in Singapore sell for SG$40,000 to SG$500,000. It’s so severe that some banks have started offering Singaporeans 50-year mortgage loans; the maximum term from the housing board, as with mortgages in most countries, is 30 years.

And it’s particularly tough for Singapore’s low-paid immigrants. Many cannot get a subsidy, since to become Singaporean, they would have to renounce their home citizenship. Some choose not to so they can retire where they were born. But it’s also increasingly hard for them to afford a resale flat. A Malaysian cleaner in her early 60s who has been in Singapore for 38 years, and does not want to give her name, illustrates this. Speaking in heavily accented Mandarin, she says she and her husband live in a single room rented from a private landlord in Chinatown.”I have only ever lived in one room and I have two children,” she adds. “Now the kids are grown up we have more space.”

…but a good example

Despite its problems, the Singapore housing model is one world governments can learn from. Singapore has achieved widespread low-income home ownership without having to resort to dangerous lending practices. As this 2008 research paper details, low-income home ownership did increase dramatically in America between 1994 and 2006 as a result of “legislation enabling financial institutions to make loans to applicants they previously would have denied.” That, of course, resulted in a credit crisis. The pattern was repeated in the UK. Having avoided crime-ridden housing projects and rapacious sub-prime lending, Singapore’s model may offer a third way.

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