Public housing is affordable, accessible & sustainable for Singaporeans

By February 8, 2023Current

TL;DR: Since day one of nation-building, the PAP government has been committed to ensuring public housing is affordable, accessible and sustainable for Singaporeans.

PAP government underestimated public housing demand ❌

PAP government kept public housing affordable and accessible ✔️

On the second day of the two-day public housing debate (6-7 Feb), Mr Pritam Singh of the Workers’ Party (WP) said the PAP government had under-built the supply of HDB flats. However, in its 2019 working paper, WP indicated that HDB should build only 9,000 units annually.

The pandemic caused a major upset in HDB’s building programme, making our housing supply tight. But, HDB is committed to catching up on lost time by launching 23,000 new flats this year and 100,000 new flats, if needed, by 2025.

In his rebuttal to Mr Singh during Parliament, Minister of National Development Mr Desmond Lee said, “Had we tapered down our supply to the Workers’ Party’s levels in 2019 or listened to you and your experts, I think our BTO shortage would be even greater today.”

Since day one of nation-building, the PAP government has been committed to providing affordable homes for Singaporeans.  On 1 February 1960, the government established the HDB to address Singapore’s housing crisis.

Toa Payoh would be the first acid test of their ability.

An aerial view of Toa Payoh, 1967.

Photo Credit: Ministry of Culture Collection, image courtesy of National Archives of Singapore

Designed to be a self-contained town, Toa Payoh was the second satellite town built entirely by the HDB. Construction began in 1964, and tenants and homeowners moved in by 1966.

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Toa Payoh was also the site of many firsts- the first MRT station, the first co-operative supermarket (NTUC Welcome) and the first neighbourhood police post!

In 1973, Toa Payoh was selected to proudly play host to 1,500 athletes competing in the sixth Southeast Asian Peninsular Games.

NTUC Welcome Supermarket in Toa Payoh, 1973

Photo credit: Perjuangan NTUC Magazine, 1973



The Home Ownership for the People Scheme

Balloting ceremony for the sale of flats in Toa Payoh in the 1960s.

Photo Credit: Ministry of Information and the Arts Collection, courtesy of National Archives of Singapore

In 1964, HDB began selling flats, the first 1,872 units in 10 blocks of nine-storey flats in Toa Payoh under The Home Ownership for the People Scheme.

Mr Lee Kuan Yew, the Prime Minister then, rationalised that ownership would provide Singaporeans with the stability to build families and raise children allowing us to have a stake in our country’s progress.

In 1968, the Central Provident Fund (Amendment) Act was passed to allow citizens to use their Central Provident Fund (CPF) to pay for HDB flats. This enabled Singaporeans to pay down payments and monthly loans with their take-home income and CPF savings.

The Home Ownership for the People Scheme underwent several changes over the following decades. The early years of the scheme promoted home ownership over rental, with HDB allowing families to make monthly payments lower than the market prices of rentals. HDB flats were also sold below market rates to ensure affordability.

While the scheme has undergone several changes over the following decades, however, the values behind our housing policies remain the same – to keep housing affordable and accessible for our people.

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The government’s approach to BTO pricing, which includes various subsidies and grants, ensures that BTO flats are affordable to flat buyers across different income levels. to buyers across different income levels.

BTO flats in NMEs are priced around the Mortgage Servicing Ratio (MSR) of 25% or less, so buyers can use less than a quarter of their household income to pay the mortgage instalment.

For example, using the average price of $342,000 for a 4-room BTO flat in a non-mature estate in 2022, a family with a household income of $5,000 can receive $45,000 in housing grants and affordably purchase the BTO flat at an MSR of 21%.

And with most Singaporeans servicing mortgages from their monthly CPF contributions, with little to no cash outlay, it gives a sense that BTO flats are broadly affordable, said Mr Lee.

Mr Lee added that the government would continue to offer various housing options, considering the needs of our flat buyers such as different sizes, locations and price points.

Beyond ensuring we have a roof over our heads, the PAP government provides its people with a better living environment through continuously innovating and continuously upgrading.

A responsible and forward-looking government will always strive to ensure public housing remains sustainable for Singaporeans. Not just for now but for generations and generations of Singaporeans after that.


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Author Hannah

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