Good Practices and Innovations in Public Governance 2003-2011

Good Practices and InnovATIONS in Public Governance
na, the corporatised body. In 2005, the government launched the “Design, Build and
Sell Scheme,” which allowed private developers to develop and sell a proportion of
new public housing on same eligibility conditions as HDB to provide more options
to meet growing housing aspirations.
An important partner of HDB in the home ownership is the Central Provident Fund
(CPF) Board, the statutory body that administers Singapore’s mandatory pension
contributions. In 1968, CPF Board allowed its members to pay for their HDB flats
using the savings in their CPF accounts. This provided a low-cost home financing
solution to bring home ownership within the reach of most Singaporeans. It is a major
factor underlying the success of the home ownership scheme.
As public housing is in fully integrated and self-contained towns with a full range of
commercial, educational, recreational, transport and other communal facilities, HDB
also works closely with various public agencies, e.g., Urban Redevelopment Authority,
National Parks Board, Land Transport Authority, Ministry of the Environment and
Water Resources, Ministry of Education, Singapore Land Authority, and Ministry of
Community Development, Youth and Sports, on comprehensive planning for township
development. Singapore’s achievements in public housing and home ownership
can be attributed to an interaction of several policies as briefly described below:
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• Land Acquisition Policy: In the early years, to assemble sufficient land at a
reasonable cost, the government had to acquire private land for the development
of new public housing. Landowners, who were given fair compensation
for land acquisition, were initially aggrieved but accepted it for national interests,
as demonstrated by the government’s massive and successful execution of
the public housing programme;
• Central Provident Fund Policy: The CPF, a compulsory savings scheme whereby
up to 34.5% of a worker’s salary is set aside by the employer and employee,
has enabled Singaporeans to fund the purchase of their homes. Today, over 70%
of Singaporean HDB flat owners service their housing loans from their CPF account
without the need for outright cash payments. There is an element of housing
subsidy built in the scheme. All HDB flats are sold on a 99-year lease at subsidized
prices. Every flat is sold by HDB at below their market value to ensure that
HDB flats are affordable to citizen families. First-time citizen buyer have a choice
of buying a flat at a subsidized price from HDB, or an HDB flat at market value in
the secondary market with a housing grant of SGD$30,000 to SGD$40,000 from
the government. Lower-income families (with monthly household income not exceeding
SGD$4,000) are assisted with more subsidies in the form of additional
housing grants of up to SGD$30,000, at graduated scale, so that the lower the
household income is estimated, the higher the subsidy the families would enjoy.
This is on top of existing housing subsidies given to first-time buyers;