Singapore housing, socialist living, and 91% home ownership

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kingdragonfly

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Topic # 240355 3-Sep-2018 19:03

I don't pretend to know how to fix NZ's housing problem. But I know NZ society is in an uncomfortable position, of haves and have nots. The young often can't buy homes without parents gifting a deposit of tens of thousands.

I accidently came across the video talking about Singapore, and how they solved their housing problems.

"Public housing is often considered low in quality and high in crime, but it's a totally different story in Singapore.

Government built apartments in Singapore are clean, safe and well-maintained, and about 80% of Singapore residents live in them.

Singapore is also one of the few countries in the world to change almost full home ownership status (# 2 in the world at 90.9%) But it wasn't always this way..."

How Singapore Fixed Its Housing Problem

tdgeek

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Reply # 2083454 3-Sep-2018 20:48

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Nice article.

What I take form this is, that you cannot trust people, as you mix profit with housing. Profit is for profit, the house is just a conduit. So, remove housing from the private sector, and build what I assume are near to cost housing. There are lots of ways to make a profit, but if housing is not one of them, that seems a good thing. The ethnic requirement is a good idea as well, that removes the low value, undesirable areas that inevitably occur.

How in NZ?

Set up a Govt dept to build houses. Its run by professional managers, its a building company. Except its near non profit, and if demand grows it just gets bigger. It might command damn good raw material prices. It would be national, so employees become more mobile, as in can relocate more easily if desired. It may build on one section, or a subdivision, ideally, it would acquire land in bulk on outskirts to expand the town. The private sector will still be there. Rents would stabilise. Privately built homes would have to compete with Govt built homes.

Now, the first reply will be that SOE's suck. Businesses are run by people, SOE's are run by people, so make sure the SOE is run by the same level of skilled people as private business, and not career public servants.

In short, left to our own devices, people will use the property market in a way that does not include adding housing for a growing population, so you take that away and do it.

elpenguino

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Reply # 2083485 3-Sep-2018 22:14

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tdgeek:

Nice article.

<SNIP>

Now, the first reply will be that SOE's suck. Businesses are run by people, SOE's are run by people, so make sure the SOE is run by the same level of skilled people as private business, and not career public servants.

I generally agree with your reply but I wanted to catch your comment about public servants.

I think you're guilty of a sweeping and outdated generalisation there. I live in Wellington and have some public servants in my family and social circles, some of them at moderately high levels of responsibility. I would say based on my observations of these public servants types and the others that I've met that career public servants are actually intelligent, well educated, hard working, dedicated people who want the best outcomes for New Zealand.

What can happen tho, is that their recommendations and advice are ignored or overridden by politicians.

Back to the topic, can you see this happening in NZ? We've spent decades basing our economy on selling houses to each other instead of something productive.

it would have been easier to start the country that way rather than change from where we are - I see that Singapore has only had 3 leaders since 1959 so low cost housing is one benefit of the authoritarian government style.

tdgeek

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Reply # 2083513 4-Sep-2018 07:17

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elpenguino:

tdgeek:

Nice article.

<SNIP>

Now, the first reply will be that SOE's suck. Businesses are run by people, SOE's are run by people, so make sure the SOE is run by the same level of skilled people as private business, and not career public servants.

I generally agree with your reply but I wanted to catch your comment about public servants.

I think you're guilty of a sweeping and outdated generalisation there. I live in Wellington and have some public servants in my family and social circles, some of them at moderately high levels of responsibility. I would say based on my observations of these public servants types and the others that I've met that career public servants are actually intelligent, well educated, hard working, dedicated people who want the best outcomes for New Zealand.

What can happen tho, is that their recommendations and advice are ignored or overridden by politicians.

Back to the topic, can you see this happening in NZ? We've spent decades basing our economy on selling houses to each other instead of something productive.

it would have been easier to start the country that way rather than change from where we are - I see that Singapore has only had 3 leaders since 1959 so low cost housing is one benefit of the authoritarian government style.

I agree re public servants, but there is a general perception that they are school leavers who over time moved up the ladder, and while more than capable, have not experienced the real world in private enterprise. Doesnt mean that there are not highly capable ones there though, I know a few myself. Plus the perception Govt cannot run an enterprise.

NZ. Politics here are rarely bipartisan, if one party says this, the other disagrees. And a housing reform would be a biggie. A party would need to bring it in, maybe as a vote catcher, and by the time they are voted out, its in place. But, many citizens would vote against it, as it will affect my property value in the future, same with my rentals, same with my mortgage business, same with my builder business and so on. Its a quantum leap to make houses JUST for living in. Even though it would work as supply would match demand. No doubt there care many other factors that would need to be taken into account, but Singapore shows it works, 90%+ home ownership. Here it is plummeting

elpenguino

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Reply # 2083549 4-Sep-2018 09:07

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tdgeek:

I agree re public servants, but there is a general perception that they are school leavers who over time moved up the ladder, and while more than capable, have not experienced the real world in private enterprise.

Great you agree with me - but to summarise, you feel there is a perception:

A some of them earn their places by attrition

B don't have a background in business

In the case of 'A' this perception is untrue because no matter who you are and where you are on the ladder you've always got a job to do and someone to answer to. Senior bosses get a lot of pressure to get things done in the allotted budgets and can soon see where their problem areas are. If you're not pulling your weight and getting the job done for your boss there's a big incentive for your boss to get rid of you. There's always new blood coming into the system so it's easy to recognise your new talent and to trim 'dead wood' to make room. All these factors keep people on their toes.

In the case of 'B' this is an often repeated myth. It is stated and re-stated as if only someone with a profit to make can study management or business. Most if not all of the factors that help an organisation run well can be applied equally well to profit making or non-profit making organisations.

Furthermore, a background in business is sometimes not helpful in some parts of business. Often government people have to have understandings of specialist subjects that those in business have no need for.

Don't forget that government employs accountants too - so there's no need for absolutely everyone to manage the books.

I am sure we all know of under-performing people in profit making organisations who only got their job in senior management because someone died or their dad owns the business

tdgeek

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Reply # 2083559 4-Sep-2018 09:17

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elpenguino:

tdgeek:

I agree re public servants, but there is a general perception that they are school leavers who over time moved up the ladder, and while more than capable, have not experienced the real world in private enterprise.

Great you agree with me - but to summarise, you feel there is a perception:

A some of them earn their places by attrition

B don't have a background in business

In the case of 'A' this perception is untrue because no matter who you are and where you are on the ladder you've always got a job to do and someone to answer to. Senior bosses get a lot of pressure to get things done in the allotted budgets and can soon see where their problem areas are. If you're not pulling your weight and getting the job done for your boss there's a big incentive for your boss to get rid of you. There's always new blood coming into the system so it's easy to recognise your new talent and to trim 'dead wood' to make room. All these factors keep people on their toes.

In the case of 'B' this is an often repeated myth. It is stated and re-stated as if only someone with a profit to make can study management or business. Most if not all of the factors that help an organisation run well can be applied equally well to profit making or non-profit making organisations.

Furthermore, a background in business is sometimes not helpful in some parts of business. Often government people have to have understandings of specialist subjects that those in business have no need for.

Don't forget that government employs accountants too - so there's no need for absolutely everyone to manage the books.

I am sure we all know of under-performing people in profit making organisations who only got their job in senior management because someone died or their dad owns the business

I agree, that's why its a perception. Created by those that do leave school and have a job for life, and those that criticise Govts and SOE's for being inefficient. I am sure that used to be the case, much less so now I expect, but the perception lives on as we all like to hate Governments. SOE's still have that ingrained perception. But, there is also much less concern over cost management in the public arena, often to not have the annual budget decreased. (That can have in private as well but not to the same extent)

MikeAqua

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Reply # 2083626 4-Sep-2018 10:56

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tdgeek:

Now, the first reply will be that SOE's suck.

The trouble with SOEs is they can end up pursuing political objectives, not core to their business purpose. For example an SOE that built houses, might be forced by its political masters to hire people that otherwise struggle to find employment.

The solution is to put the SOE very much at arm's length from ministers - like a CRI. But added costs remain. For example, SOEs are subject to higher reporting burdens and associated costs.

An SOE that built houses would not overcome the mammoth in the room: Consenting for land development is too slow and too expensive and spatial planning at the regional or city level is poor.

The Singapore example also has another important dimension. They have a very authoritarian government for a 'democracy'. Singapore's govt has been referred to at times as a "benign dictatorship". That is how they have gotten done. I wouldn't personally like to see that replicated here.

Mike

tdgeek

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Reply # 2083631 4-Sep-2018 11:02

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MikeAqua:

tdgeek:

Now, the first reply will be that SOE's suck.

The trouble with SOEs is they can end up pursuing political objectives, not core to their business purpose. For example an SOE that built houses, might be forced by its political masters to hire people that otherwise struggle to find employment.

The solution is to put the SOE very much at arm's length from ministers - like a CRI. But added costs remain. For example, SOEs are subject to higher reporting burdens and associated costs.

An SOE that built houses would not overcome the mammoth in the room: Consenting for land development is too slow and too expensive and spatial planning at the regional or city level is poor.

The Singapore example also has another important dimension. They have a very authoritarian government for a 'democracy'. Singapore's govt has been referred to at times as a "benign dictatorship". That is how they have gotten done. I wouldn't personally like to see that replicated here.

Yes. It would need to be a true business. RMA etc thats already a massive issue, one of many steps that are needed. To be honest NZ is to slow and too dumb to enact a reform like this, too much Govt need to buy votes, and too much critique over whatever Govt was in power, so a good forward thinking plan for housing would never get off the ground, irregardless that it would work. In short its just removing profit and selfish motives and putting a sensible plan in place. Ad workoimng with current building operations to get them built.

MikeAqua

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Reply # 2083633 4-Sep-2018 11:03

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elpenguino:

I live in Wellington and have some public servants in my family and social circles, some of them at moderately high levels of responsibility. I would say based on my observations of these public servants types and the others that I've met that career public servants are actually intelligent, well educated, hard working, dedicated people who want the best outcomes for New Zealand.

What can happen tho, is that their recommendations and advice are ignored or overridden by politicians.

I mostly agree with you here. NZ's govt runs on unpaid overtime, from people who could largely earn more elsewhere.

But ... I do meet public servants who are pushing their own agenda, cause or ideology and are far from objective/neutral/fair/good faith. Some are as bad as the actual politicians in that regard.

Mike

elpenguino

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Reply # 2083813 4-Sep-2018 13:05

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MikeAqua:

tdgeek:

Now, the first reply will be that SOE's suck.

The trouble with SOEs is they can end up pursuing political objectives, not core to their business purpose.

Name one that has done this.

SOEs are answerable to their boards and the minister(s) - if they're not making money, there's going to be hard questions.

MikeAqua

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Reply # 2083857 4-Sep-2018 15:00

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elpenguino:

MikeAqua:

The trouble with SOEs is they can end up pursuing political objectives, not core to their business purpose.

Name one that has done this.

The specific problem I raised was pressure from shareholding minister leading to SOEs doing things contrary to their core purpose.

I'll name three - Timberlands West Coast (read the book), Solid Energy and Te Papa ... could do a whole thread on govt dabbling in CRIs.

Mike

MikeAqua

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Reply # 2083957 4-Sep-2018 17:14

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I forgot to say that is an interesting article ...

1) My two take home messages - 80% of Singaporean live in public housing. That's not social housing - unless 80% of households are struggling;

2) If I hear correctly, the apartment you can buy is govt controlled based on your income band. I couldn't tell if your income determined the maximum or minimum cost of apartment you are allowed to buy.

Mike

gzt

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Reply # 2084048 4-Sep-2018 20:47

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Malaysia next door became concerned home ownership at 72% and dropping. Must fix:

https://www.thestar.com.my/~/media/online/2018/04/28/18/46/mainx_arz_xxxx_affordable-housepdf.ashx/?h=1106&&w=620&la=en

elpenguino

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Reply # 2084178 5-Sep-2018 09:21

Going high rise and smaller would certainly make housing cheaper. Those Malaysian dwellings are 65 -80 sq metres which is the size of a garage in a modern kiwi dream home.