MP Louis Chua of the Workers’ Party said that one of the biggest misconceptions is that home ownership is superior to home renting.
In his adjournment motion on 2 November 2021, Mr Chua pushed for a greater diversity of housing options. The key problem, he said, is the “severe shortage” of Housing Board (HDB) rental flats. “Renting an HDB flat need not and should not be seen as a sign that you are poor and needy, and our position on rentals need to reflect that,” he said.
Mr Chua explained why he thought home ownership is not superior to home renting with an analogy.
“To use an analogy from the insurance world, is a whole life insurance policy necessarily superior to that of term insurance? … I believe the same can be applied to housing, and the saying that ‘tenants pay subsidised rents but own nothing’ is only a half-truth,” he added.
Mr Chua pointed to Switzerland and Germany, two countries that have the lowest homeownership rates among OECD countries but one of the highest gross domestic product per capita and Human Development Index scores globally.
“The correlation between homeownership and the level of prosperity of a country may not be as clear cut. Home ownership is thus more of a preference than a superior option,” he said.
Homeownership: the cornerstone of Singapore’s public housing policy
Clearly, Mr Chua has missed the point. Home ownership is not just about prosperity. It’s about giving Singaporeans a tangible stake in the country, a home upon which one can build your family and lives, a sense of rootedness in the country.
Indeed, in 2009, at the key handover ceremony for The Pinnacle@Duxton, Mr Lee Kuan Yew reminded the people that homeownership is critical because we were an immigrant community with no common history.
“Our peoples came from many different parts of Asia. Home ownership helped to quickly forge a sense of rootedness in Singapore. It is the foundation upon which nationhood was forged,” Mr Lee said.
Senior Minister of State for National Development Sim Ann described homeownership as a key tenet of Singapore’s social compact.
She said to extend the public housing rentals to the mainstream would be a ‘significant departure’ from the current public housing policy and principles. Not only will it reshape our social norms, but it will also weaken our communities because, unlike home ownership where people sink their roots, but rentals are also more transitory.
“This is not something we will embark on lightly without deep consideration,” she said in response to Mr Chua’s adjournment motion.
Singapore should not blindly follow what is done in other countries without taking into consideration the cultural context and different social circumstances in other countries. Many, in fact, had ended up renting for many years or even for life because of a lack or absence of public housing subsidies that support homeownership.
In Singapore, the provision of a subsidised rental option is a means towards achieving homeownership because the government believes in the benefits that home ownership brings to Singaporeans. It is remarkable that around 85 per cent of our low-income households own their homes.
For those who wish to rent, there is already a wide range of open market rental options, including co-living.
Mr Chua and WP’s push to encourage home renting is short-sighted.
When you pay rent, whatever you pay in rent is an expenditure, spent and gone. Rentals also eat into one’s ability to save for the future. Most Singaporeans will also not find it attractive – nor affordable – to pay market rent using cash.
Home ownership of an HDB flat, on the other hand, is a store of value that can be monetized when needs be. When one is old and retired, the home that you own is an assured roof over your head for the rest of your life. But for those who rent, rental payments would continue to recur, even after retirement. There will be the constant worry about where to get the money to pay the monthly rent at a time when one is living on savings.
Home ownership has been and will continue to be a key housing strategy for Singapore, SMS Sim said.
For a young couple starting a family, home ownership provides that stability, security and sense of belonging that they need both for themselves and their children.