I refer to the letter by Mr Foo Sing Kheng titled “Asset appreciation a centrepiece policy of the Government” (June 3).
That the Government is looking to consult the public, then make policy adjustments regarding Housing Board flats in prime areas, is precisely why asset appreciation is not a centrepiece policy, nor is it clear why it should ever be.
Public housing is first and foremost about affordability.
Asset appreciation – if at all – is but a happy side effect of good public housing.
The Government and the public recognise that owning a Build-To-Order (BTO) flat in a prime area is akin to winning a lottery.
As Mr Foo pointed out, only around 0.35 per cent of all HDB resale transactions last year hit at least $1 million.
But the question is, why should this tiny fraction of HDB owners enjoy such windfall gains, given that the flats are subsidised by public monies?
Mr Foo’s analogy of educational subsidies makes little sense when applied to HDB flats.
Educational subsidies are an investment in the human capital development of the next generation, which provides returns (and tax dollars) for society as a whole.
Subsidising education is an economical use of public monies. But there is little reason to socialise the higher cost of a prime-area HDB flat while privatising its astronomical profit.
Not everyone succeeds in balloting for a BTO flat – much less one in a prime area.
Due to costs, BTO flats in prime areas will be smaller than usual and hence benefit even fewer people.
These lottery winners – that is, BTO flat owners – enjoy cheap, brand new flats which they can then sell at inflated prices bolstered artificially by buyer subsidies.
In turn, sky-high resale flat prices fuel speculation in the wider resale market. Such is the dynamic in a variety of mature estates outside the core central region.
We are already seeing the return of cash over valuation for transactions beyond the so-called prime areas.
Price increases which outstrip economic growth and incomes are clearly not sustainable. How will subsequent generations afford public housing then?
Building HDB flats in prime areas might be ill-advised, regardless of whatever schemes might be in place to claw back subsidies.
Focusing on these schemes misses the point – public monies should be spent where they are needed most, that is, to allow Singaporeans to afford a roof over their heads.
Trying to appease both speculators and genuine home owners is a misguided endeavour.
We should not be subsidising expensive BTO developments on prime land to benefit a few. Neither should we confuse the desire to lessen inequality with the goal of affordable housing.
Public monies would be better spent on improving HDB town amenities and connectivity.
In fact, if inequality is the issue, more resources should be channelled into areas beyond housing, such as education.
Let us invest where it counts and keep public housing focused on affordability, lest we encourage further rent-seeking.