In the colonial period, Singapore Island was used as a base for distribution, financial, transportation and communication functions, with mainland Malaysia as the production base for agricultural and mineral products. The area developed into a highly congested mixed land use, fuelled by rapid population growth and the inattention of the colonial authorities.
After the Malaysian Federation gained independence, Singapore was expelled from this federation in the aftermath of a series of racial riots that left a lot of casualties. As a new country that had not actively sought independence, it was immediately faced with the challenges of overcrowded urban slums, and squatter settlements without sanitation, lighting and ventilation – which posed fire hazards and were breeding grounds for diseases, crime and drugs.
According to UN-Habitat (2020), 82% of the residents in Singapore live in housing provided by the Housing and Development Board (HDB) of Singapore; having succeeded in its measures to address housing shortages, unaffordability and universal provision of public housing.
The success of this programme was partly a result of the government stimulating housing development by providing the necessary supporting infrastructure such as water, gas, electricity, waste management lines, roads, sewers lines, bridges and proper physical and development planning.
The following are some of the noteworthy characteristics of the Singaporean public housing system:
- Financing is driven by a combination of individual savings, public grants, and the influence of property market dynamics,
- Social housing is owned and operated centrally as a unitary national programme, with the Housing and Development Board (HDB) responsible for developing, allocating, and managing all the social housing,
- Housing units are provided directly instead of housing allowances or benefits,
- Rents are lower than market rates, but they rise steadily in line with incomes and families with much improved earnings are urged towards home ownership,
- Tenancies are kept short to signal that social housing is not a permanent arrangement and households should seek home ownership in the long run, but in practice, these tenancies are routinely renewed.
Further, public housing in Singapore deliberately promotes home ownership over public renting. Consequently, the Housing and Development Board flats are made available for purchase on a 99-year leasehold basis.
The rationale behind this arrangement is that commitment to a mortgage obliges individuals to remain employed, hence creating a disciplined workforce that is attractive to foreign investment and advantageous for the nation’s sustained economic growth.
Also, as part of the country’s policies, there is established a mandatory contribution pension system based on individual earnings. 20% of the employee’s income is contributed by an employee from their monthly income while 17% is contributed by the employer.
An individual is allowed to withdraw some of the savings from these contributions to pay for housing before retirement, making house ownership a realisable dream for many Singaporeans.
Low-income people who cannot afford commercial loans from banks are supported by cheap mortgages from the Housing and Development Board.
Rents charged are graduated according to an individual’s level of income, thereby helping to reduce the burden on low-income people. This practice is a way of eradicating the barriers to homeownership brought about by the imbalances in the distribution of income and financial resources amongst the country’s population.
The housing development plan changes as the demand and supply forces in the market change, including adjusting to cover the needs, tastes and preferences of the growing national population.
Dynamics such as stagnating incomes at the bottom end, increasing number of divorces and elderly households willing to live in smaller households are accommodated in this plan. The versatility of this programme in response to these market dynamics is a very positive trend that can be borrowed and properly integrated into the Kenya Affordable Housing Programme, and other public housing initiatives globally.
However, some of Singapore’s success such as universal public housing provision may not be directly imported to Kenya as the populations are different, and there’s a larger population of Kenyans living in rural areas compared to Singapore which is a city-state.
Nevertheless, subsidies and compulsory pension contributions for the working population to support their dream towards home ownership are progressive policies that can be borrowed.
Further Reading:
The following key documents form the source of the information presented in this article. For more insights, please obtain a copy and read through it.
- Di Mauro, B.W. (2018). Building a Cohesive Society: The Case of Singapore’s Housing Policies. Policy Brief No. 128; Centre for International Governance Innovation.
- UN-Habitat. (2020). Housing Practice Series – Singapore. United Nations Human Settlements Programme (UN-Habitat), Nairobi.