I'm an American who lives in Singapore and generally has great respect for the what the country has achieved in housing, transport, healthcare, etc. I think SG offers great inspiration for how to use public housing to guarantee a middle-class standard of living for all in a globalized / post-industrial world. I'm also in favor of more widespread social housing in any form. However, there are some important details to note before using SG as a model:
- Building out the HDB system required levelling entire historic villages in the 60s-80s. The reason the HDBs are so economically mixed today (hawkers live next to investment bankers) is that the majority of citizens were forcibly moved two generations ago. This is only possible with an authoritarian government, and we couldn't (and shouldn't) do the same. But without wide-scale destruction of existing housing, there will always be pressure for the small number of units to be given to those most in need --> concentration of poverty.
- HDB developments work because they are largely (a) mixed-use development, with lots of light retail; and (b) transit-oriented development, built in conjunction with new metro lines. Large HBD estates are structured as a stand-alone community, with a grocery store, medical clinic, primary school, hawker centre and MRT stop all within walking distance. This is total urban planning, not just building things.
- The HDB allocation system is baked into the entire Singaporean social contract: every citizen pays payroll taxes into an account called a CPF, which functions like a 401(k). This fund can be used for the down payment for your HBD. This in turn works because you can only get a HDB when you turn 35 or get married, whichever comes first. If you a buy a private property before then, you forfeit your right to public housing. Therefore, the vast majority of citizens live with their parents into their early thirties or beyond. I feel like we more individualistic Americans would object to this way of the government prescribing our life path, but copying just one element of the system without the set of complementary institutions is likely to be much less successful.
- One of the ways that SG keeps the cost of HDBs down is by building them using South Asian migrant laborers who are paid $300-500 a month and sleep 20 to a room. American society doesn't seem to be willing to countenance having such a system in agriculture, let alone building our biggest cities.
This conversation reminds me of the 'varieties of capitalism' political economy theories. Basically, there are multiple equilibria in the labor-industrial-capital institution space. One equilibrium may be more optimal than another, but complementarities between institutions mean that copying one policy without the others does not necessarily make you better.
We need to build affordable housing in high-demand cities whenever and however we get a good chance, but for strategy purposes I think it's better to look to the European models of social housing (I know the Netherlands and Austria are particularly good at this) than Singapore's.
How do you square the circle of a potential seller’s housing wealth being the same phenomenon as a potential buyer’s affordability crisis? It seems like it’s unsustainable to just keep transferring more and more wealth from late buyers to early buyers.
In that sense I kind of wonder if the 99-year lease is actually an important part of this, although one that could certainly be fine-tuned, and one that might work very differently on the ground than it does in theory
I think you underestimate NIMBYs ability to hate change. If building costs are a concern seems this could be a possible place where P3s could actually be useful. Government buys land and parcels out building to a variety of developers. Gets you different thinking on each project for variety and could allow bidding under private rules.
Why are 99-year leases a bad idea in your opinion? The official justification for them here seems to be to avoid entrenching wealth within those lucky enough to inherit a flat.
"The biggest reason NIMBYs fight so hard to avoid dense housing construction in their neighborhoods is that they don’t want to live next to poor people."
As a strong YIMBY, I have to disagree with this a bit. I'd say the main reason NIMBYs fight density and change in their neighborhoods is out of a desire to avoid instability/risk in the value of their largest asset.
2) demands that public housing use 'highly paid labor.'
BLS sez residential building during the '70s Bay Area housing boom was built union.
'70s Union carpenter base wage was $54.5/hr (2019 $) vs $50.5 in '19.
(BLS survey of 1973 wages in construction found 95+% unionization of SF-Oakland market and avg hourly earnings for residential carpenters of $8.17, which I inflated using the SF-Oak CPI-W)
Non-blue-collar labor prices have risen sharply, including college-educated construction employees' compensation, per BLS-BEA productivity (KLEMS) price indexes.
A pro-housing coalition that includes building trades unions could work in concert with others in the coalition to remove some of the most socially inefficient barriers & lower costs, IMHO.
it's an interesting idea but i feel it puts way too much pressure on the govt to manage building projects, which could lead to political backlash worse than the left-NIMBY coalition. and, as you say, acquisition is complicated in desirable metro areas
this could be greatly simplified if you had a program where property buyers could get the state to pay for the land under their new property, in exchange for accepting a 100% land value tax on it.
this would lower the barrier of entry for housing development a TON, but it would also create a strong incentive to build in order to share or defray the burden of the LVT. this could open the door for getting properties to smaller housing co-ops that dont have the capital to buy in expensive markets and could lead them to set up the kind of low-rises you mentioned. it also creates a nice new stream of revenue for the govt that should eventually pay for itself.
this is similar to the state acting as an intermediary and buying up properties for improvement, except they wouldn't have to be the ones scoping out and executing those projects. no imminent domain tricks needed, no extra costs associated with government construction.
downsides are that it still doesn't solve the NIMBY problem, but it hopefully makes the upfront costs that NIMBYs impose more bearable. another possible downside is that it doesn't build wealth as housing values appreciate because the LVT would keep pace. but that's not all a bad thing, as housing should be something you use. a home, not an investment.
I'm an American who lives in Singapore and generally has great respect for the what the country has achieved in housing, transport, healthcare, etc. I think SG offers great inspiration for how to use public housing to guarantee a middle-class standard of living for all in a globalized / post-industrial world. I'm also in favor of more widespread social housing in any form. However, there are some important details to note before using SG as a model:
- Building out the HDB system required levelling entire historic villages in the 60s-80s. The reason the HDBs are so economically mixed today (hawkers live next to investment bankers) is that the majority of citizens were forcibly moved two generations ago. This is only possible with an authoritarian government, and we couldn't (and shouldn't) do the same. But without wide-scale destruction of existing housing, there will always be pressure for the small number of units to be given to those most in need --> concentration of poverty.
- HDB developments work because they are largely (a) mixed-use development, with lots of light retail; and (b) transit-oriented development, built in conjunction with new metro lines. Large HBD estates are structured as a stand-alone community, with a grocery store, medical clinic, primary school, hawker centre and MRT stop all within walking distance. This is total urban planning, not just building things.
- The HDB allocation system is baked into the entire Singaporean social contract: every citizen pays payroll taxes into an account called a CPF, which functions like a 401(k). This fund can be used for the down payment for your HBD. This in turn works because you can only get a HDB when you turn 35 or get married, whichever comes first. If you a buy a private property before then, you forfeit your right to public housing. Therefore, the vast majority of citizens live with their parents into their early thirties or beyond. I feel like we more individualistic Americans would object to this way of the government prescribing our life path, but copying just one element of the system without the set of complementary institutions is likely to be much less successful.
- One of the ways that SG keeps the cost of HDBs down is by building them using South Asian migrant laborers who are paid $300-500 a month and sleep 20 to a room. American society doesn't seem to be willing to countenance having such a system in agriculture, let alone building our biggest cities.
This conversation reminds me of the 'varieties of capitalism' political economy theories. Basically, there are multiple equilibria in the labor-industrial-capital institution space. One equilibrium may be more optimal than another, but complementarities between institutions mean that copying one policy without the others does not necessarily make you better.
We need to build affordable housing in high-demand cities whenever and however we get a good chance, but for strategy purposes I think it's better to look to the European models of social housing (I know the Netherlands and Austria are particularly good at this) than Singapore's.
Would an expansion of the housing voucher program be a good start?
How do you square the circle of a potential seller’s housing wealth being the same phenomenon as a potential buyer’s affordability crisis? It seems like it’s unsustainable to just keep transferring more and more wealth from late buyers to early buyers.
In that sense I kind of wonder if the 99-year lease is actually an important part of this, although one that could certainly be fine-tuned, and one that might work very differently on the ground than it does in theory
I think you underestimate NIMBYs ability to hate change. If building costs are a concern seems this could be a possible place where P3s could actually be useful. Government buys land and parcels out building to a variety of developers. Gets you different thinking on each project for variety and could allow bidding under private rules.
Why are 99-year leases a bad idea in your opinion? The official justification for them here seems to be to avoid entrenching wealth within those lucky enough to inherit a flat.
Thoughts on the Red Vienna model?
Let's do Modified Singapore Model and a greatly expanded Section 8 program. Why not a "beer & tacos" approach instead of "beer or tacos"?
"The biggest reason NIMBYs fight so hard to avoid dense housing construction in their neighborhoods is that they don’t want to live next to poor people."
As a strong YIMBY, I have to disagree with this a bit. I'd say the main reason NIMBYs fight density and change in their neighborhoods is out of a desire to avoid instability/risk in the value of their largest asset.
You cite two sources of costs:
1) NIMBYism & related regs
2) demands that public housing use 'highly paid labor.'
BLS sez residential building during the '70s Bay Area housing boom was built union.
'70s Union carpenter base wage was $54.5/hr (2019 $) vs $50.5 in '19.
(BLS survey of 1973 wages in construction found 95+% unionization of SF-Oakland market and avg hourly earnings for residential carpenters of $8.17, which I inflated using the SF-Oak CPI-W)
Non-blue-collar labor prices have risen sharply, including college-educated construction employees' compensation, per BLS-BEA productivity (KLEMS) price indexes.
A pro-housing coalition that includes building trades unions could work in concert with others in the coalition to remove some of the most socially inefficient barriers & lower costs, IMHO.
it's an interesting idea but i feel it puts way too much pressure on the govt to manage building projects, which could lead to political backlash worse than the left-NIMBY coalition. and, as you say, acquisition is complicated in desirable metro areas
this could be greatly simplified if you had a program where property buyers could get the state to pay for the land under their new property, in exchange for accepting a 100% land value tax on it.
this would lower the barrier of entry for housing development a TON, but it would also create a strong incentive to build in order to share or defray the burden of the LVT. this could open the door for getting properties to smaller housing co-ops that dont have the capital to buy in expensive markets and could lead them to set up the kind of low-rises you mentioned. it also creates a nice new stream of revenue for the govt that should eventually pay for itself.
this is similar to the state acting as an intermediary and buying up properties for improvement, except they wouldn't have to be the ones scoping out and executing those projects. no imminent domain tricks needed, no extra costs associated with government construction.
downsides are that it still doesn't solve the NIMBY problem, but it hopefully makes the upfront costs that NIMBYs impose more bearable. another possible downside is that it doesn't build wealth as housing values appreciate because the LVT would keep pace. but that's not all a bad thing, as housing should be something you use. a home, not an investment.