SINGAPORE: With the recent surge in property prices, affordable housing has become an issue of concern for many Singaporeans, not only for themselves but for younger generations. The issue was discussed in Parliament at the beginning of the year.
One resident brought the issue up to Workers’ Party Member of Parliament Jamus Lim (Sengkang GRC) during recent house visits. “I also had a long conversation with one resident about housing. He was concerned about how expensive things have gotten, and felt that the overemphasis on pricing land in a manner that wouldn’t take away from the reserves—hence protecting the inheritance of the young—nevertheless imposed a burden on them, as they had to confront high prices,” wrote Assoc Prof Lim in a Monday morning (Apr 17) Facebook post.
He said that he and volunteers from #TeamSengkang received feedback from 321B #Anchorvale concerning their suggestions for estate improvement, which included “ideas like a sheltered dropoff point, barriers to manage dangerous cycling, and enhanced road safety features around schools (plus the usual concerns about pigeons).”
Assoc Prof Lim added that the team would follow up on these issues with the relevant authorities.
He also wrote about the suggestions concerning more rational pricing of land that the WP offered in Parliament.
Assoc Prof Lim said, “deferring entirely to market pricing to infer the price of land introduces difficulties of its own. After all, there isn’t just one price of land; it depends on its use—for infrastructure, private commerce, or public facilities like community centers—and even by the government’s own reckoning, these are already priced differently.”
He added that WP MPs suggest that since public housing is, by nature, public, “public housing deserves a discount of its own.”
“And citizens have a right to housing in their own country,” he wrote.
The Sengkang GRC MP, who teaches economics at ESSEC Business School, added, “Furthermore, using current resale transactions to back out the price of land risks embedding a bubble into its price, and allowing it to take on a life of its own (this is what happened with the house price bubble in Japan in the early 1990s, and in the pricing of mortgage-backed securities in the 2007 subprime crisis).
We may be willing to accept this risk for private housing, but we shouldn’t for public projects. Instead, we can have public land valued in a manner that does not take the cue from markets, but still remains informed by fundamentals. There are many ways to infer value—even one based on the discounted value of a stream of expected rents—that are less susceptible to bubble dynamics. The Chief Valuer can adopt these approaches, but it requires some guidance from the government. #SengkangGRC” /TISG
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