reporter2
11-04-19, 18:19
More HDB flats in the CBD?
With the Draft Master Plan proposing more residential units in the pricey city centre, the question is whether these homes should all be private condos or include public housing
Should there be HDB blocks in the CBD? This question of whether new public housing flats will be built in the Central Business District (CBD) has emerged after the Urban Redevelopment Authority (URA)launched its Draft Master Plan last month. A key part of the plan were incentive schemes to nudge developers to turn ageing offices into homes and hotels.
The URA revealed plans to add 20,000 homes in the Central Area, which the CBD is a part of. This is almost 40 per cent more than the current 51,706 homes there, which also includes the Outram, River Valley and Orchard areas.
The CBD, meanwhile, is smaller, comprising the sub-zones of Clifford Pier, Raffles Place, Phillip, Bayfront, Cecil, Central, Maxwell, Tanjong Pagar and Anson.
But how many of the new additions would be subsidised Housing Board (HDB) flats is up in the air. This uncertainty will persist for several years as the authorities study their options.
Currently, there are 12,004 HDB flats, which form 23 per cent of the homes in the Central Area. These are in places such as Chinatown, Tanjong Pagar and Hong Lim.
In contrast, HDB flats make up more than 74 per cent of homes outside these perimeters.
It is also noteworthy that the number of HDB flats in the Central Area today is 607 units fewer than the 12,611 units six years ago - a fall of about 5 percentage points. This is due to several public housing blocks being torn down, such as the iconic, multi-hued Rochor Centre.
Should there be space for public housing in the new plans for the city core? One argument against public housing in these areas is that they will have to be priced very high, beyond the reach of young couples who typically buy such new subsidised HDB flats.
And as the issue of widening inequality comes to the fore, observers have warned of social stratification if some areas are priced out of reach of the average Singaporean.
If flats are priced lower, below their market value, however, there is a high opportunity cost to using taxpayers' money to subsidise a few hundred lucky families who ballot successfully for such flats - resulting in the so-called lottery effect.
Striking a balance between pricing flats according to market value and keeping them affordable is tough - a point National Development Minister Lawrence Wong made during the debate on his ministry's budget last month .
Responding to Nominated MP Walter Theseira, he said public housing must continue to integrate Singaporeans of all backgrounds. He added that the Government intends "to continue injecting public housing" in the central areas of Singapore.
"We have already been doing so in small pockets and we will plan to do so in a bigger way with long-term rejuvenation," he said.
But in a 2016 interview with The Straits Times, Mr Wong had hinted that a repeat of a Pinnacle@Duxton scenario - HDB flats in prized downtown areas - is unlikely to happen. "I think to do more (public) housing in the city under the same regime would not be plausible and we shouldn't do it... I have to sell it potentially with different parameters," he had said of the Cantonment Road flats.
These flats were the last tranche of public housing units so close to the heart of the business district core, completed around 2009. The flats were sold in 2004 at prices ranging from $289,200 to $439,400. In 2008, 111 five-room flats were relaunched at prices ranging from $545,000 to $645,800.
Buyers who moved in earlier started to sell their flats on the open market from about late 2014, after the statutory five-year minimum period of occupation.
From then to February this year, 328 flats have changed hands - almost one in five of the 1,848 flats in total. Of these, 51 were sold for $1 million and above, and the cheapest was a four-room flat that sold for $650,000 in 2015.
EXPENSIVE LAND VS SOCIAL BENEFITS
Under the Draft Master Plan, the Greater Southern Waterfront, which extends from Pasir Panjang to Marina East, will be transformed into a new major gateway and location for urban living along Singapore's southern coast.
To achieve that, city port operations, including those in Tanjong Pagar and Pasir Panjang, will move to Tuas - freeing up land for the Greater Southern Waterfront, which is three times the size of Marina Bay.
Can we - and should we - expect more HDB flats in such high-value areas, including the CBD, in the years to come?
National University of Singapore (NUS) sociologist Chua Beng Huat, who worked briefly as the HDB's director of research in the 1980s, says there is no compelling reason to put HDB flats in these areas.
"The simple economic reason is that the land cost is too high and will incur disproportionate subsidy for public housing relative to suburban areas," he says.
Any reason to do so is political. He explains: "If residential blocks to be built in the CBD are restricted to expensive condos, then it will intensify - visually and materially - the social and economic divisions and inequalities among Singaporeans.
"This might incur political costs in terms of votes at the election."
Another argument in favour of HDB flats in the CBD is that the homes could make for a livelier city core in a place that is currently too quiet at night and on the weekends. Indeed, injecting life into the city core is a key objective of the URA's new CBD Incentive Scheme.
As Singapore University of Social Sciences senior research fellow Rita Padawangi puts it: "If we want a more vibrant CBD, we should provide these residences to people who would make them their home, not just to own yet another property."
Indeed, many condominium units in the CBD are rented out, with places such as The Sail or Icon more than 55 per cent leased out. Other units are unoccupied, waiting for yet another transient tenant to move in.
HDB flats are, by nature, owner-occupied. Citizens who buy new flats have to live in them for at least five years. They can be resold only to Singapore citizens and permanent residents. However, they can be rented out after five years - to locals or foreigners. The ownership rules mean most HDB estates are filled by long-time residents, not transient tenants.
Another argument in favour of HDB flats in the city centre is that they will promote diversity. In a 2016 commentary for The Straits Times, researchers Wu Wei Neng and Louisa-May Khoo argued that "the city centre, as Singapore's historical and symbolic heart, must resonate in meaningful ways for everyone".
Having socio-economic diversity would have intangible but important impacts on a small nation, such as fostering trust between the different groups and not just token acceptance, they argued.
This is critical, given that an Institute of Policy Studies survey in 2017 found that someone who lives in public housing, on average, knows fewer than one person who lives in private housing.
But this vision is merely theoretical if people cannot afford HDB flats in the CBD, which will necessarily be priced higher than those in the suburbs.
At the Build-To-Order launch in February, a four-room flat in the non-mature town of Jurong West started at $257,000 without grants, less than half the $523,000 price tag of flats in Kallang/Whampoa on the city fringe.
A flat in the CBD would surely cost more, based on nearby property prices.
FINDING A BALANCE
Ultimately, having HDB flats in the CBD is a matter of choice on the Government's part and what goal it hopes to achieve.
"Why let the market alone dictate price?" says NUS urban sociologist Ho Kong Chong. "There's a reason public housing comes under the Government."
To minimise the lottery effect, some suggestions that have come up over the years include a longer minimum occupation period, shorter leases and a higher resale levy when the owner sells the subsidised city flat to buy another subsidised flat from the HDB.
But veteran urban planner Steven Choo says such differentiated schemes would complicate the public housing system, which may dilute its original mission of housing the nation over time if there are too many rules.
He believes that the CBD itself is too astronomically expensive to justify public housing, but having HDB homes in the central area and fringe districts is still possible, pointing to neighbourhoods such as Rochor, Spottiswoode Park and Little India as examples.
He also notes: "We're making an assumption that most people choose where to live primarily based on the value of their home.
"But in many cases, HDBs are the ones that value-add-with their schools, hawker centres and proximity to friends and family."
While it made sense that early HDB precincts were built in the city centre, such as Tanjong Pagar and Chinatown, to house people living in the overcrowded central urban core, today, many suburban towns boast modern amenities and, more importantly, access to transport. "Now, most of Singapore is actually well served," adds Dr Choo.
Navigating the path ahead will not be easy as the authorities have to weigh the various trade-offs.
But one thing is for sure: Public housing is more than just physical infrastructure - and the social goals are more important than ever.
Planners will have to weigh the consequences in making their decisions.
With the Draft Master Plan proposing more residential units in the pricey city centre, the question is whether these homes should all be private condos or include public housing
Should there be HDB blocks in the CBD? This question of whether new public housing flats will be built in the Central Business District (CBD) has emerged after the Urban Redevelopment Authority (URA)launched its Draft Master Plan last month. A key part of the plan were incentive schemes to nudge developers to turn ageing offices into homes and hotels.
The URA revealed plans to add 20,000 homes in the Central Area, which the CBD is a part of. This is almost 40 per cent more than the current 51,706 homes there, which also includes the Outram, River Valley and Orchard areas.
The CBD, meanwhile, is smaller, comprising the sub-zones of Clifford Pier, Raffles Place, Phillip, Bayfront, Cecil, Central, Maxwell, Tanjong Pagar and Anson.
But how many of the new additions would be subsidised Housing Board (HDB) flats is up in the air. This uncertainty will persist for several years as the authorities study their options.
Currently, there are 12,004 HDB flats, which form 23 per cent of the homes in the Central Area. These are in places such as Chinatown, Tanjong Pagar and Hong Lim.
In contrast, HDB flats make up more than 74 per cent of homes outside these perimeters.
It is also noteworthy that the number of HDB flats in the Central Area today is 607 units fewer than the 12,611 units six years ago - a fall of about 5 percentage points. This is due to several public housing blocks being torn down, such as the iconic, multi-hued Rochor Centre.
Should there be space for public housing in the new plans for the city core? One argument against public housing in these areas is that they will have to be priced very high, beyond the reach of young couples who typically buy such new subsidised HDB flats.
And as the issue of widening inequality comes to the fore, observers have warned of social stratification if some areas are priced out of reach of the average Singaporean.
If flats are priced lower, below their market value, however, there is a high opportunity cost to using taxpayers' money to subsidise a few hundred lucky families who ballot successfully for such flats - resulting in the so-called lottery effect.
Striking a balance between pricing flats according to market value and keeping them affordable is tough - a point National Development Minister Lawrence Wong made during the debate on his ministry's budget last month .
Responding to Nominated MP Walter Theseira, he said public housing must continue to integrate Singaporeans of all backgrounds. He added that the Government intends "to continue injecting public housing" in the central areas of Singapore.
"We have already been doing so in small pockets and we will plan to do so in a bigger way with long-term rejuvenation," he said.
But in a 2016 interview with The Straits Times, Mr Wong had hinted that a repeat of a Pinnacle@Duxton scenario - HDB flats in prized downtown areas - is unlikely to happen. "I think to do more (public) housing in the city under the same regime would not be plausible and we shouldn't do it... I have to sell it potentially with different parameters," he had said of the Cantonment Road flats.
These flats were the last tranche of public housing units so close to the heart of the business district core, completed around 2009. The flats were sold in 2004 at prices ranging from $289,200 to $439,400. In 2008, 111 five-room flats were relaunched at prices ranging from $545,000 to $645,800.
Buyers who moved in earlier started to sell their flats on the open market from about late 2014, after the statutory five-year minimum period of occupation.
From then to February this year, 328 flats have changed hands - almost one in five of the 1,848 flats in total. Of these, 51 were sold for $1 million and above, and the cheapest was a four-room flat that sold for $650,000 in 2015.
EXPENSIVE LAND VS SOCIAL BENEFITS
Under the Draft Master Plan, the Greater Southern Waterfront, which extends from Pasir Panjang to Marina East, will be transformed into a new major gateway and location for urban living along Singapore's southern coast.
To achieve that, city port operations, including those in Tanjong Pagar and Pasir Panjang, will move to Tuas - freeing up land for the Greater Southern Waterfront, which is three times the size of Marina Bay.
Can we - and should we - expect more HDB flats in such high-value areas, including the CBD, in the years to come?
National University of Singapore (NUS) sociologist Chua Beng Huat, who worked briefly as the HDB's director of research in the 1980s, says there is no compelling reason to put HDB flats in these areas.
"The simple economic reason is that the land cost is too high and will incur disproportionate subsidy for public housing relative to suburban areas," he says.
Any reason to do so is political. He explains: "If residential blocks to be built in the CBD are restricted to expensive condos, then it will intensify - visually and materially - the social and economic divisions and inequalities among Singaporeans.
"This might incur political costs in terms of votes at the election."
Another argument in favour of HDB flats in the CBD is that the homes could make for a livelier city core in a place that is currently too quiet at night and on the weekends. Indeed, injecting life into the city core is a key objective of the URA's new CBD Incentive Scheme.
As Singapore University of Social Sciences senior research fellow Rita Padawangi puts it: "If we want a more vibrant CBD, we should provide these residences to people who would make them their home, not just to own yet another property."
Indeed, many condominium units in the CBD are rented out, with places such as The Sail or Icon more than 55 per cent leased out. Other units are unoccupied, waiting for yet another transient tenant to move in.
HDB flats are, by nature, owner-occupied. Citizens who buy new flats have to live in them for at least five years. They can be resold only to Singapore citizens and permanent residents. However, they can be rented out after five years - to locals or foreigners. The ownership rules mean most HDB estates are filled by long-time residents, not transient tenants.
Another argument in favour of HDB flats in the city centre is that they will promote diversity. In a 2016 commentary for The Straits Times, researchers Wu Wei Neng and Louisa-May Khoo argued that "the city centre, as Singapore's historical and symbolic heart, must resonate in meaningful ways for everyone".
Having socio-economic diversity would have intangible but important impacts on a small nation, such as fostering trust between the different groups and not just token acceptance, they argued.
This is critical, given that an Institute of Policy Studies survey in 2017 found that someone who lives in public housing, on average, knows fewer than one person who lives in private housing.
But this vision is merely theoretical if people cannot afford HDB flats in the CBD, which will necessarily be priced higher than those in the suburbs.
At the Build-To-Order launch in February, a four-room flat in the non-mature town of Jurong West started at $257,000 without grants, less than half the $523,000 price tag of flats in Kallang/Whampoa on the city fringe.
A flat in the CBD would surely cost more, based on nearby property prices.
FINDING A BALANCE
Ultimately, having HDB flats in the CBD is a matter of choice on the Government's part and what goal it hopes to achieve.
"Why let the market alone dictate price?" says NUS urban sociologist Ho Kong Chong. "There's a reason public housing comes under the Government."
To minimise the lottery effect, some suggestions that have come up over the years include a longer minimum occupation period, shorter leases and a higher resale levy when the owner sells the subsidised city flat to buy another subsidised flat from the HDB.
But veteran urban planner Steven Choo says such differentiated schemes would complicate the public housing system, which may dilute its original mission of housing the nation over time if there are too many rules.
He believes that the CBD itself is too astronomically expensive to justify public housing, but having HDB homes in the central area and fringe districts is still possible, pointing to neighbourhoods such as Rochor, Spottiswoode Park and Little India as examples.
He also notes: "We're making an assumption that most people choose where to live primarily based on the value of their home.
"But in many cases, HDBs are the ones that value-add-with their schools, hawker centres and proximity to friends and family."
While it made sense that early HDB precincts were built in the city centre, such as Tanjong Pagar and Chinatown, to house people living in the overcrowded central urban core, today, many suburban towns boast modern amenities and, more importantly, access to transport. "Now, most of Singapore is actually well served," adds Dr Choo.
Navigating the path ahead will not be easy as the authorities have to weigh the various trade-offs.
But one thing is for sure: Public housing is more than just physical infrastructure - and the social goals are more important than ever.
Planners will have to weigh the consequences in making their decisions.