Affordability and inclusivity in housing policy are key issues for young Singaporeans

The young are increasingly vocal against parts of the housing policy outside of the traditional family nucleus, such as only allowing singles to buy a Build-To-Order flat at 35.

HDB flat prices in the resale market have risen to record highs this year, throwing up questions of home affordability for the younger generation, said property experts. ST PHOTO: KEVIN LIM

Housing has not been one of the most politically-charged issues in Singapore for the past decade, but the twin factors of rising prices and accessibility of home ownership means it could return as the topic du jour by the next general election.

Pandemic-related construction delays meant that young home owners have had to put off getting their keys and starting families.

Those who have instead looked to the resale market have seen Housing Board or HDB flat prices rise to record highs this year, throwing up questions of home affordability for the younger generation, said property experts.

Chief executive officer of real estate agency OrangeTee & Tie Steven Tan noted that the demand for Built-To-Order flats has increased significantly since 2019, with the ratio of first-timer applicants rising from two to three times between 2016 to 2018, to between four and five times from 2019 to date.

Should home prices continue to creep up and perceptions form that people are getting priced out, there may yet be echoes of the 2011 general election, when housing affordability dented the People’s Action Party’s electoral performance, said NUS sociologist Tan Ern Ser.

Agreeing, Lee Kuan Yew School of Public Policy senior research fellow Ng Kok Hoe said: “Singaporeans have always been sensitive to cost of living issues… We should expect housing costs to continue to weigh on people’s minds – and on electoral behaviour.”

What is different this time, however, is a growing emphasis on fairness in access to home ownership, over even that of affordability, said Dr Leong Chan Hoong, associate professor at the Singapore University of Social Sciences’ Centre for Applied Research.

The pandemic and shift to working from home means people now think of home as not just a roof over their heads, but also as an office and an essential own space, he said.

To millennials, “the root of it is whether they feel they have been given a fair chance at home ownership and what used to maybe be a privilege is now considered a right”.

The political compact has always been that if you are a family and legally married, you deserve an apartment, he said.

“But now this is where you can find tension – on one hand we want to maintain the sanctity of marriage and want to give priority to these families but on the other hand how can the Government not support or be perceived to not support millennials who want to achieve their housing aspirations,” he added.

The young are increasingly vocal against parts of the housing policy outside of the traditional family nucleus, such as only allowing singles to buy a BTO flat at 35, experts noted.

The Housing Board’s control over who gets to buy subsidised BTO flats through its eligibility criteria is likely to come under increased scrutiny, said Professor Chua Beng Huat, a sociologist with the National University of Singapore (NUS).

“The criteria are effectively rules of exclusion, such as (of) unmarried single mothers,” he said.

“In a society that is increasingly concerned with ‘fairness’ and ‘justice’, exclusions will be seen as ‘unfair’ and ‘unjust’. ”

One example is the exorbitant capital gains made by those who sold their units at [email protected], who are already among higher wage earners, noted Prof Chua. This has been seen as undeserving and unfair.

The “unfairness” has generated public outcry which has caused the government to respond with the new Prime Location Public Housing model, he said.

Flats launched under the new model come with a subsidy clawback clause upon resale and owners will be subject to a 10-year minimum occupation period, up from the five years for other flats, before they can sell their flats on the open market.

The new model is meant to ensure that new public housing in prime, central locations will remain affordable, accessible and inclusive for Singaporeans and discourage those looking to flip for a substantial windfall.

Dr Ng noted that housing policy has, in the past, shown responsiveness to the public’s cost concerns.

He added: “Over time, the position of singles in the public housing system has also improved, albeit slowly. But the treatment of single ‘never married’ parents and lower-income families remains problematic.

“The narrow definition of “nuclear family” disadvantages single parents in terms of housing access and cost. Limiting subsidised rental flats to one- and two-room flat types means that lower-income families’ space needs are often not met.”

This, of course, does not take away the reality that housing remains a limited resource, said Dr Leong.

Public policy must then ensure that housing as a basic need is met, all the more so for families with the least resources, said Dr Ng. This will provide a secure and conducive environment for family life and child development, especially for the most vulnerable in the community.

The Government has made efforts to address this – for example through the Enhanced CPF Housing Grant of up to $80,000 that was announced in 2019. Under the grant, close to $500 million has been disbursed to 15,600 first-time flat buyers as at end-2020.

Another example is the Proximity Housing Grant of up to $30,000 which was rolled out in August 2015. It has doled out $748 million to about 40,200 households as at end-2020.

Impact on future elections

Housing has played a critical role in past elections, in particular the 2011 General Election. Cost of living, including housing affordability, was one of the hot-button issues that affected the PAP’s popular vote, said experts. ST PHOTO: ARIFFIN JAMAR

NUS sociologist Tan Ern Ser said housing issues could affect the incumbent People’s Action Party’s electoral performance in the near future if familiar gripes persist.

Past elections have seen housing play a critical role, in particular the 2011 general election which was deemed a watershed election.

Then, immigration and cost of living, including housing affordability, were hot-button issues that affected the popular vote garnered by the PAP, said experts.

Subsequently, Mr Khaw Boon Wan, the new Minister for National Development then who took over Mr Mah Bow Tan, introduced a whole slew of policy changes.

These included delinking the pricing of new flats from the 20 per cent market discount from equivalent resale flats, increasing the supply of new flats sharply as supply had been stagnant before, and increasing housing grants to low-income first time buyers and lower- or middle-class families who needed to upgrade, said Prof Chua.

“All the changes caused prices to decline gradually. The pay-off to the government was a resounding increase in popular votes in (the 2015 general election) and almost knocked off WP from Aljunied GRC,” he added.

Housing has not played as significant a role in elections since then. For example in 2020, the hot button issues were jobs, competition from foreign professionals and the need for diverse views in Parliament, noted Dr Tan.

“Though some of the opposition parties did press for policy changes in regard to Sers, housing for singles and single-parent families, lowering the prices of public flats, expanding rental housing eligibility, and doing away with the Ethnic Integration Policy,” he added.

Under the Selective En bloc Redevelopment Scheme (Sers), residents are compensated for their existing homes and given discounts on brand new flats.

Dr Leong said that going forward, with the increase in population size and the current restrictions from the Covid-19 pandemic, labour shortages and skyrocketing cost of materials, the supply side of housing could be another angle for housing to take the stage again at the general election.

On the topic of Sers and lease decay, these are currently less relevant to Singaporeans than rising HDB prices and the lack of supply, said Mr Tan. These topics could become more pressing further down the road as certain precincts or estates grow older, he added.

Dr Ng noted that problems may arise then as the current range of measures, such as the Home Improvement Programme, Sers and Voluntary Early Redevelopment Scheme, cannot entirely address concerns.

He said: “A possible response is to introduce more tenure options by expanding and diversifying the public rental sector. Compared to the traditional ownership model premised on incomes from long, continuous and stable careers, this may allow people more capacity and flexibility to deal with economic volatility.”

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