Disclaimer: This article is not directly about the public housing situation in Singapore. Rather, it is about public housing in general, and can be applied to any small country.
Why is cheap public housing important to a small country (such as Singapore)?
In any economy, there will be an income divide. There will be high-income earners and low-income earners. In a small country, where land is scarce, land prices are naturally going to be high. Housing, if left to market forces, will thus be high and low-income earners will have challenges finding a place to stay.
In larger countries, this is not a serious problem. Low-income earners can live further away from city centres, where housing prices are lower and thus more affordable. Yes, it is more inconvenient since they will need to commute longer, but at least they can afford a place to stay.
Not so in land scarce countries. Low-income earners in such countries cannot simply stay further from city centres; such a place may not even exist if the country is small enough. Everyone will then need to share the small piece of land, and in order to give low-income earners a place to stay, cheap public housing is necessary.
In such small countries, the aim of public housing would then necessarily be to provide cheap housing to accommodate the low-income earners. It is about giving them a place to stay. It is not about investments, it is not about profits, and it is not about luxury. It is about keeping people off the streets. Distribution of income, in this case, comes about because high-income earners will be paying more tax, of which a portion would go towards subsidising the building of cheap public housing, benefiting the low-income earners.
A portion of the housing market would still be left to market forces, of course, to cater for those who can afford them. But strict measures will need to be in place to prevent people from profiteering from the cheap public housing. After all, the aim of public housing is to provide affordable housing to those who would otherwise not be able to afford it if prices are left to market forces.
Another article about public housing, though not directly related to this post:
ECs: Why so unfair?
Why is cheap public housing important to a small country (such as Singapore)?
In any economy, there will be an income divide. There will be high-income earners and low-income earners. In a small country, where land is scarce, land prices are naturally going to be high. Housing, if left to market forces, will thus be high and low-income earners will have challenges finding a place to stay.
In larger countries, this is not a serious problem. Low-income earners can live further away from city centres, where housing prices are lower and thus more affordable. Yes, it is more inconvenient since they will need to commute longer, but at least they can afford a place to stay.
Not so in land scarce countries. Low-income earners in such countries cannot simply stay further from city centres; such a place may not even exist if the country is small enough. Everyone will then need to share the small piece of land, and in order to give low-income earners a place to stay, cheap public housing is necessary.
In such small countries, the aim of public housing would then necessarily be to provide cheap housing to accommodate the low-income earners. It is about giving them a place to stay. It is not about investments, it is not about profits, and it is not about luxury. It is about keeping people off the streets. Distribution of income, in this case, comes about because high-income earners will be paying more tax, of which a portion would go towards subsidising the building of cheap public housing, benefiting the low-income earners.
A portion of the housing market would still be left to market forces, of course, to cater for those who can afford them. But strict measures will need to be in place to prevent people from profiteering from the cheap public housing. After all, the aim of public housing is to provide affordable housing to those who would otherwise not be able to afford it if prices are left to market forces.
Another article about public housing, though not directly related to this post:
ECs: Why so unfair?
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