Singapore went from one of the worst housing shortages in the world to 90% home ownership. UK politicians can learn from its forceful approach
“The rapacity of the landlords surely cannot be exceeded anywhere in the world. Some dilapidated buildings resembled human warrens.” This is what politician and writer Edith Sommerskill said of her 1954 trip to Singapore in her memoirs – but it is not a description visitors would recognise today.
How did Singapore go from one of the worst housing crises in the world to a country where 90% of its citizens own their own home and homelessness is virtually eliminated – despite its population tripling in that time? And how is it that house building in the UK has regularly fallen short, leaving it with a housing shortage of one million and falling home ownership?
While the UK’s housing crisis may not quite have reached the lows of 1950s Singapore, there’s a lot we can learn from the strength of the Asian city-state’s response. Following independence, Singapore needed an effective housing policy to solve the housing shortage and accelerate economic development. Government bodies were set up, and equipped with the legal powers to implement policies. Expenditure on housing was about 8% of GDP in the 1970s and rose to as much as 15% in the 1980s and 1990s.
In his book, the late Lee Kuan Yew, former prime minister of Singapore, gives insight into how the country’s housing policy has been developed and implemented. In the 1960s, the government ensured it had enough land to build homes by enforcing compulsory purchase orders and capping land purchase prices which prevented landowners profiteering from sales. By the end of 1965 Singapore had exceeded its target for housebuilding.
It tried two approaches to encourage home ownership. The first, low interest rates, didn’t work because borrowers could not afford the 20% deposit – but a compulsory pension scheme for workers forced everyone to save money that the government decided should be used for a down-payment on a new home. Four years after purchase, homeowners could sell their property at the open market price. And for those who still cannot afford a home, there are subsidised rents and grants.
Meanwhile, in 21st-century Britain, all major national political parties have identified housing as a key issue for the 2015 election. Labour and the Conservatives promise to deliver 200,000 new homes a year by 2020 and the Liberal Democrats pledge 300,000 homes. The party manifestos contain some good ideas for reaching these targets, the best being Labour’s pledge to give local authorities “use it or lose it” powers to encourage developers to build. Also good are the Conservatives’ subsidised deposits and the Conservative, Liberal Democrat and Ukip focus on freeing up brownfield and public sector sites.
But none go far enough. While the various levers proposed should help towards their objectives, the mechanisms that can ensure delivery are lacking. These manifesto housebuilding targets are merely aspirational, and there is little evidence to suggest they will be delivered. UK politicians, if they are serious about solving the shortage of good quality homes, should adopt the forceful approach of Singapore.
Source: theguardian.com
