The man who helped Singapore’s property boom worries

Liu has personally overseen the development of over half a million public housing units. (PHOTO: Lauryn Ishak/Bloomberg)

By Faris Mokhtar

(Bloomberg) – Brilliant, cosmopolitan Singapore plays host to a very unusual balancing act. The city is one of the most expensive real estate markets in Asia and, at the same time, boasts one of the highest homeownership rates in the world.

Liu Thai Ker, “the architect of modern Singapore”, is largely responsible for this.

As Chief Architect of the Housing Development Board of Singapore, Liu was instrumental in establishing a housing model that sustained decades of astonishing economic growth. The 84-year-old Yale graduate has personally overseen the development of over half a million public housing units.

Today, nearly 90% of the city’s residents own the well-designed and government-built apartments in which they live. Since its independence in 1965, citizens have been able to purchase these units at great value, making home ownership a key avenue for Singaporeans. to grow their wealth.

But in recent years – and especially since the pandemic, which plunged the city into its worst recession ever – Singapore’s housing model has come under intense scrutiny. As this week’s episode of The Pay Check podcast explores, soaring prices and shrinking profits are raising concerns about growing inequality among the city’s citizens and threatening to unravel its rented housing model.

In an interview, Liu explained how Singapore’s property market got to where it is now – and how he sees it going forward.

Q: You were a student in Australia and the United States, then you worked for the famous architect IM Pei in New York. What brought you back to Singapore?

After World War II, Malaysia and Singapore were extremely, extremely poor. And the environment was extremely bad. You could actually blindfold yourself and know you were at the Singapore River. Why? You could smell the sewers. It’s the Singapore we were then.

I said to myself, even before going abroad, that I wanted to get up to speed. First, speak English as well as anyone else. Second, I wanted to become one of the best students in the university. And third, to come back to help rebuild Singapore.

Q: Three quarters of Singapore’s population lived in crowded slums in 1960 when the HDB was established. What was your vision of the city?

I followed a diploma course in architecture and urban planning. And I was very jealous of the old western towns – in Europe, in particular, and also of Manhattan. It’s very tidy, very neat, very easy to navigate. I wanted Singapore to be this good.

A lot of my planning ideas came from the west, like the “new town”. My job was to translate these concepts into quantifiable specifications. Today we [in Singapore] have many highly self-sufficient new towns – but in the West I don’t think I can find them yet. They had the concept, but they had no one to translate it.

Q: Social housing often gets a bad rap, but that’s not the case in Singapore. Why is housing built by the city government so popular?

So we didn’t build homes, we built communities. For example, we’ve broken down new towns into neighborhoods. And in each district, I wanted to make sure that we have apartments from T1 to T5 together. But not anyhow. You don’t mix one and three because the economic gap is too big, it will create cravings. You can only mix one and two room apartments, then two and three room apartments. So all of these things have been integrated into the hardware.

And in fact, even a little thing like that: we had one-room apartments with central corridors. After going to Europe, I realized that when you have a central corridor, there is no light inside. And when there is not good lighting, people are in a bad mood and tend to fight more. That’s why we got rid of it [design].

It didn’t happen by chance, every little gesture was the result of hard work and careful thought.

Q: How has housing become a tool for wealth creation in Singapore?

It was a gradual process. I speak as a planner, architect. I’m not speaking as an economist.

The only resource we have in Singapore is human beings, and we need to take care of our human beings to survive as a country. So, we must first satisfy basic human needs: to clothe them, to feed them, to house them, to have good means of transport.

Its very important. Because if you don’t have a home, you can’t focus on your job. And second, our public accommodations [agency] is probably one of the very, very few in the world that has built housing not only to rent but also to sell. When you own your own property, you will feel that you have taken root in society. And you’ll also want to defend the country and help build the economy. Thus, home ownership is another very important factor in the success of public housing.

Q: Has the model worked well, are the audience reaping the benefits?

We didn’t want people who lived in public housing to feel inferior. So we wanted the value of their home to increase.

One of my jobs at HDB was to monitor the supply of social housing against demand to make sure people didn’t have to wait too long to get social housing. In fact, what we wanted was to have a slightly higher supply than the demand so that people would not spend exorbitant prices.

I fear that nowadays public housing has become a kind of commercial enterprise rather than actually addressing housing needs. I think the involvement may not be very good for Singapore’s economic development.

Q: Does Singapore’s housing policy still work in terms of social mobility?

As long as the HDB is able to control the price of its land and its consumption costs, it is hoped that it will be able to control the sale price. But I’m totally disconnected from HDB, I don’t know if they are able to do that. If they can’t do that, then I think the key success factor for public housing could be compromised.

Q: What are your proposals to ensure that Singapore has a sustainable housing model?

Personally, I believe that our original policy — first, to monitor supply and demand and second, to build relatively inexpensive housing — is still valid. And in addition, of course, to building very self-sufficient new towns. All of these things have respectively contributed to our economic growth.

I would say, make sure the price of housing goes up steadily and not wildly. But how to make that transition — I think we need the advice of some economists. Because now it’s gone crazy. If you suddenly control it, I don’t know what negative effect it could have. We need an economist to study it. But my wish is that we return to something more stable, so that our property prices remain more predictable.

Q: After watching Singapore grow over the decades, what do you think of the city’s future?

We should be grateful that first-generation political leaders championed meritocracy. Meritocracy has helped us educate almost everyone. In terms of the labor market, the government has also been very careful to maintain a good distribution of jobs for the different ethnic groups. Even gender equality is improving steadily.

When we started, our economy was behind Manila, Yangon and Ho Chi Minh City, so we had a crisis mentality. Our first generation political leaders feared for our survival. And now we seem to be very successful – and we are – but I personally think that as a small country without resources, we have to insist on maintaining the crisis mentality in order to survive. The crisis always hides behind our successful appearance.

Liu Thai Ker’s remarks have been lightly edited for clarity and conciseness.

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