mr funny
29-11-10, 00:15
http://www.straitstimes.com/PrimeNews/Story/STIStory_607760.html
Nov 27, 2010
Commentary
Enduring value of HDB flats
Singaporeans put faith in govt enhancement and upgrading schemes
By Chua Mui Hoong, Deputy Review Editor
WINDOWS. The size of the windows in a Housing Board (HDB) flat tells you a lot about its vintage. Their position, size and design tell a veritable story of how Singapore's public housing has evolved.
And what a story it is of meeting the needs of a cross-section of Singapore society and keeping up with their aspirations.
Louvred windows opening onto common corridors were the norm in older HDB flats built in the 1960s and early 1970s. As people desired more privacy, HDB introduced adjustable louvred windows, so you could keep the lower panes closed to keep prying eyes out and open those on top for ventilation.
Sliding casement windows were the norm in estates that today are considered 'mature'. But they were sparse: good-sized four panels in living rooms, but a miserly two or three slim panels in bedrooms, keeping out the light.
Later designs featured taller and wider windows, to become nearly full-length like those at The Pinnacle@Duxton in Tanjong Pagar. The result: more light and air, and a more attractive home.
In the last few weeks, I have seen at first hand the improvements in HDB's designs as I accompanied a friend on multiple viewings of resale flats.
As Minister Mentor Lee Kuan Yew has noted on more than one occasion, an HDB flat is an asset one should not sell lightly. And as Prime Minister Lee Hsien Loong remarked in a book published recently to mark HDB's 50th anniversary, HDB living has defined Singapore in significant ways. This is particularly true in the way HDB has kept up with the aspirations of the broad swathe of Singaporeans, so that they remain happy with their HDB homes.
This has and is being done in three ways:
First, there is the conscious decision to pitch public housing as the housing of choice for the vast majority (now 85 per cent), and not just the bottom - say, 30 per cent.
The second flows from the first: quality is high enough to satisfy a wide range of customers. This means that at the top end, innovations like the HUDC developments and executive maisonettes of yore, keep upper-middle income earners within the HDB fold.
The third corollary flows from the first two: a mix of people from different socio-economic backgrounds live in public housing and share a common experience.
As PM Lee noted, HDB estates are designed so that flats of different sizes get 'all mixed together so that one can't tell if you are living in a particular district, whether you are up or down, or where you rank on the totem pole'.
Some foreign observers like scholar Richard Wilkinson, believe that Singapore's public housing programme not only provides shelter but also boosts social cohesion. The scholar has done work showing a link between income inequality and social dysfunctions like low trust, poor health and high crime rates. He noted in a talk here recently that Singapore had a high income inequality, but did not suffer these social dysfunctions - and postulated that HDB might be one reason for this, for it helped build a sense of community.
Recent studies in behavioural economics elucidate this. People seek aspirational goods that set them apart from others. If your neighbour's house is bigger and has a swimming pool, then you may also crave one. This results in the equivalent of a positional 'arms race' where each party strives to outdo the other - causing anxiety, stress and discontent all round.
But if the majority of Singaporeans are content to live in HDB flats, do their grocery shopping at wet markets nearby and eat at low-cost hawker centres in HDB estates, then there is less pressure to live it up and spend more - leading to more feelings of well-being and a greater sense of solidarity. HDB living thus helps keep not only different ethnic groups, but also socio-economic groups, together.
An important plank of this strategy is to maintain the value of an HDB flat as it ages so that HDB owners of all income groups enjoy financial security into their old age.
This is being done via HDB's aggressive policy of upgrading and 'asset enhancement' programmes. These can add tens of thousands to the value of an old flat. In Ang Mo Kio, the price difference of two nicely renovated flats I viewed in the same neighbourhood, one upgraded with a lift on every floor and an extra utility room and the other not, was $75,000.
So successful has the HDB's policy of preserving the value of ageing flats been, prices defy economics.
A rational way of calculating the value of an HDB flat is to look at its price per square foot, per annum of lease remaining - or what I have dubbed psf pa. Prices of 99-year private condos that are more than 20 years old, are significantly lower than newer condos in the same area, for they take into account the depreciation of the lease.
HDB flats by contrast show no signs of falling in value. A 600 sq ft three-room flat in Queenstown with 60 years left in its lease can fetch over $300,000 - which works out to $500 psf, or $8.33 psf pa.
According to HDB records, a three-room flat of 646 sq ft built in 2008 was sold in Tanglin Halt for $425,000 recently. This works out to $658 psf, but only $6.78 psf per year of remaining lease - lower than the $8.33 psf pa that a 40-year-old flat in the same estate can fetch.
Why old flats retain their value is one of the puzzles of the HDB market that an outsider will not be able to explain. The reason is actually very simple: because Singaporeans have every confidence that the Government will maintain the value of HDB flats, either by improving them, or by redeveloping them and paying owners market compensation. The 99-year lease is not a clock ticking away the value of an HDB flat, but a timer that can be reset.
Back in 17th century England, windows were a status symbol. Grand stately homes had multiple large windows. To boost state coffers, one monarch imposed a windows tax - the more windows your home had, the more you paid. This apparently explains the phrase 'daylight robbery' - referring to how some people boarded up windows to avoid the tax.
There is, mercifully, no windows tax these days. But those huge glass sheets in today's new HDB flats - 'condo-style windows' in local parlance - continue to be a status symbol, a visual announcement that public housing has kept up with aspirations, and indeed, arrived.
[email protected]
Nov 27, 2010
Commentary
Enduring value of HDB flats
Singaporeans put faith in govt enhancement and upgrading schemes
By Chua Mui Hoong, Deputy Review Editor
WINDOWS. The size of the windows in a Housing Board (HDB) flat tells you a lot about its vintage. Their position, size and design tell a veritable story of how Singapore's public housing has evolved.
And what a story it is of meeting the needs of a cross-section of Singapore society and keeping up with their aspirations.
Louvred windows opening onto common corridors were the norm in older HDB flats built in the 1960s and early 1970s. As people desired more privacy, HDB introduced adjustable louvred windows, so you could keep the lower panes closed to keep prying eyes out and open those on top for ventilation.
Sliding casement windows were the norm in estates that today are considered 'mature'. But they were sparse: good-sized four panels in living rooms, but a miserly two or three slim panels in bedrooms, keeping out the light.
Later designs featured taller and wider windows, to become nearly full-length like those at The Pinnacle@Duxton in Tanjong Pagar. The result: more light and air, and a more attractive home.
In the last few weeks, I have seen at first hand the improvements in HDB's designs as I accompanied a friend on multiple viewings of resale flats.
As Minister Mentor Lee Kuan Yew has noted on more than one occasion, an HDB flat is an asset one should not sell lightly. And as Prime Minister Lee Hsien Loong remarked in a book published recently to mark HDB's 50th anniversary, HDB living has defined Singapore in significant ways. This is particularly true in the way HDB has kept up with the aspirations of the broad swathe of Singaporeans, so that they remain happy with their HDB homes.
This has and is being done in three ways:
First, there is the conscious decision to pitch public housing as the housing of choice for the vast majority (now 85 per cent), and not just the bottom - say, 30 per cent.
The second flows from the first: quality is high enough to satisfy a wide range of customers. This means that at the top end, innovations like the HUDC developments and executive maisonettes of yore, keep upper-middle income earners within the HDB fold.
The third corollary flows from the first two: a mix of people from different socio-economic backgrounds live in public housing and share a common experience.
As PM Lee noted, HDB estates are designed so that flats of different sizes get 'all mixed together so that one can't tell if you are living in a particular district, whether you are up or down, or where you rank on the totem pole'.
Some foreign observers like scholar Richard Wilkinson, believe that Singapore's public housing programme not only provides shelter but also boosts social cohesion. The scholar has done work showing a link between income inequality and social dysfunctions like low trust, poor health and high crime rates. He noted in a talk here recently that Singapore had a high income inequality, but did not suffer these social dysfunctions - and postulated that HDB might be one reason for this, for it helped build a sense of community.
Recent studies in behavioural economics elucidate this. People seek aspirational goods that set them apart from others. If your neighbour's house is bigger and has a swimming pool, then you may also crave one. This results in the equivalent of a positional 'arms race' where each party strives to outdo the other - causing anxiety, stress and discontent all round.
But if the majority of Singaporeans are content to live in HDB flats, do their grocery shopping at wet markets nearby and eat at low-cost hawker centres in HDB estates, then there is less pressure to live it up and spend more - leading to more feelings of well-being and a greater sense of solidarity. HDB living thus helps keep not only different ethnic groups, but also socio-economic groups, together.
An important plank of this strategy is to maintain the value of an HDB flat as it ages so that HDB owners of all income groups enjoy financial security into their old age.
This is being done via HDB's aggressive policy of upgrading and 'asset enhancement' programmes. These can add tens of thousands to the value of an old flat. In Ang Mo Kio, the price difference of two nicely renovated flats I viewed in the same neighbourhood, one upgraded with a lift on every floor and an extra utility room and the other not, was $75,000.
So successful has the HDB's policy of preserving the value of ageing flats been, prices defy economics.
A rational way of calculating the value of an HDB flat is to look at its price per square foot, per annum of lease remaining - or what I have dubbed psf pa. Prices of 99-year private condos that are more than 20 years old, are significantly lower than newer condos in the same area, for they take into account the depreciation of the lease.
HDB flats by contrast show no signs of falling in value. A 600 sq ft three-room flat in Queenstown with 60 years left in its lease can fetch over $300,000 - which works out to $500 psf, or $8.33 psf pa.
According to HDB records, a three-room flat of 646 sq ft built in 2008 was sold in Tanglin Halt for $425,000 recently. This works out to $658 psf, but only $6.78 psf per year of remaining lease - lower than the $8.33 psf pa that a 40-year-old flat in the same estate can fetch.
Why old flats retain their value is one of the puzzles of the HDB market that an outsider will not be able to explain. The reason is actually very simple: because Singaporeans have every confidence that the Government will maintain the value of HDB flats, either by improving them, or by redeveloping them and paying owners market compensation. The 99-year lease is not a clock ticking away the value of an HDB flat, but a timer that can be reset.
Back in 17th century England, windows were a status symbol. Grand stately homes had multiple large windows. To boost state coffers, one monarch imposed a windows tax - the more windows your home had, the more you paid. This apparently explains the phrase 'daylight robbery' - referring to how some people boarded up windows to avoid the tax.
There is, mercifully, no windows tax these days. But those huge glass sheets in today's new HDB flats - 'condo-style windows' in local parlance - continue to be a status symbol, a visual announcement that public housing has kept up with aspirations, and indeed, arrived.
[email protected]