Three Core Failings

Last Friday, National Development Minister Mah Bow Tan kicked off a series of articles in TODAY with which he planned to discuss his concept of public housing. His maiden contribution highlighted his 3 "core commitments", which ironically demonstrated that he got it all wrong, all along.

1. "Homes for ownership:
Rather than making people pay "dead rent" with no returns for a roof over their heads, the Government decided early on that prudent mortgages can be a "good debt" that allows every citizen, every family, to have a concrete stake in this country."

If outright purchase is the only way to go, why is rental or lease still an attractive financial option? There are many situations where renting makes more sense than buying. Young couples can start a family almost immediately, and address the declining birthrate, without waiting to save up for the downpayment. Renting also means not having to worry about a leaking roof, a bum-faucet, or pest control. With job uncertainty exacerbated by foreign talent imports, renting allows you the flexibility of moving at the drop of a hat. Or voting with your feet. Stakeholding makes no sense if it can be diluted with foreigners at the Minister's whim and fancy.

2. "Homes for the masses:
Second, public housing in Singapore is not just about putting roofs over people's heads, but also about building an inclusive home for all Singaporeans."

Poor Mr Lim Kim San must be rolling in his grave over this one. The recent measures speak for themselves - let each market have their own dynamics. These are not new rules, just old ones which worked in the past. Public housing is not meant for speculators, within or without the country. Those who can afford private properties should not be allowed to deprive the needy of affordable accommodation. Period. Remember the ugly Mercedes owner who fought over free text books?

3. "Homes for life:
Third, our housing commitment to Singaporeans is a long-term one, HDB not only sells you a flat but comes back to upgrade it from time to time, budget permitting."

No one should have to service a mortgage the whole duration of his working life, with or without a retirement respite. Housing payments should just be another temporal financial allocation, like education, healthcare, travel and hobbies. Mah was the one who made you pay to change out the window rivets installed by HDB in the first place, or face a stiff fine with potential jail time. The upgrading he talks about comes with an additional cost, but not an itemised bill. As a seller, HDB acts more like a difficult landlord, always threatening to withhold maintenance services during electioneering periods.

Dense as the Minister may appear to be, he should pay heed to the words of the head of research and consultancy at Chesterton Suntec International: "If you cannot afford to live in a private property and invest in another in the first place, but want to live in an HDB flat and invest in one, you are probably the most vulnerable to a sudden and sharp downward price correction. It may not be immediately obviously to you, but like a gambling addict, you need protection from yourself."
Then again, Mah's from the same crowd that built, not one, but two casinos, that celebrate the social evil of gambling.