Singapore: Who Gets to Be Crazy Rich?

The environment was extremely bad. Just to prove it to you, you could actually blindfold yourself and you know you're at Singapore River. Why it could smell in Singapore River. That's the Singapore we will indose states. That's Low Tiker, and he's one of the main reasons the city is so different today. People call him the architect of modern Singapore. Lou always had dreams of bettering his circumstances and those

of the city he grew up in. At a young age, he decided to study architecture so he could one day help build up Singapore. His studies took him to Australia, then Yale, and then to New York, where he worked for the famed architect I. M. P. Then he got the opportunity he had been preparing for In nineteen sixty nine, Louis asked to come back to Singapore to join its

recently established Housing Development Board, or the HDB. Its goal was to improve the city's housing conditions, and the Government of Singapore decided, if we want to have a sustainable city compatible with all the other larger countries, we must achieve excellence. And one of the signs of removing backwardness is to remove the squats and house everybody in housing. But it was about more than just putting a decent roof over people's heads. Singapore is a tiny island state

with no agricultural industry. Singapore's key resource is its people, so the government wanted to make Singapore somewhere people wanted to live and stay, a place they were invested in. When you own your own properties, then you feel that you have taken root in the society. And I also want to defend on the one to defend for the survival of the country. On the hand is to help build the economy of the country, and it went even

further than that. The government also felt that if it met people's basic needs housing, education, health care, then they'd be able to thrive and in turn help Singapore's economy grow. Within a few years, more than four hundred thousand people were living in h GB rentals. Singapore must be one of the few places is in the world where a statutory board satisfactorily completed everything is set out to do

in its first five year plan. Then in nineteen sixty four, the government want a step further and began to allow to encourage even lower middle income citizens to buy their apartments at prices well below market rates. After five years, they could sell them on the open market. That program allowed many Singaporeans to make a lot of money. If you bought an HDB apartment and sold it twenty five years later, you'd have made your money back more than

ten times over. Today, Singaporeans expect to own their homes. Almost of the population does, and eventually to sell them at a profit. With one sweeping policy, Singapore had managed to ensure that the vast majority of its population had a clean, modern place to live, and it had boosted its economy. Singapore is now one of the richest countries

per capita in the world. Then the pandemic ushered in Singapore's worst ever recession, and median household income fell for the first time in a decade, and while Singapore did a pretty good job containing the virus, the pandemic brought havoc to the city's carefully controlled real estate market. The economy shrank, but home prices continued to rise. The average private property now costs about fifteen times median household earnings.

That's higher than New York, London or San Francisco. I do worry that nowadays the public housing presses is really a business venture then actually solving the housing need. I feel that the implication may not be very good for the economic development of Singapore. Jobless claims coming in, I mean really jumping from the week before, pretty brutal, three point to a million record six point six million Americans filed for unemployment last week. Indian working women, but the

worst impact did the pandemic. Prices of public housing. We sail flats have hit an old time high in the first quarter of the year. Well now to the billionaire boom. According to Bloomberg, super yacht charters are up over three d and a billionaire was created every twenty six hours during this pandemic. It is time for a wealth tax in America. Welcome back to the paycheck. I'm Rebecca Greenfield. By many accounts, Singapore is a pandemic and an inequality

success story. The country kept its COVID death rates relatively low, and it's a rich country where many people live relatively comfortably. But as we've learned this season, no place can fully insulate itself from the effects of a pandemic, and Singapore felt huge economic shocks that have hit its core affordable housing super hard. Like in many big cities around the world,

demand for housing spiked during the pandemic. People were reevaluating their life choices and the homes they were suddenly spending way more time in, and they were enjoying record low interest rates. As a result, Singapore is becoming more and more stratified, and that's left its citizens starting to question whether the city's wildly successful housing experiment is still working

for them. In the election, the ruling People's Action Party suffered its worst parliamentary results and more than sixty years of unbroken rule. Observers blamed the outcome on younger voters, and they're growing fears about inequality. They worry they can't match the economic advancement their parents enjoyed. If the problem remains unresolved. Singapore is at risk of losing its only resource,

It's people. My colleague Forest Moctar grew up in Singapore and has worked as a reporter there for the past ten years. Here he is with the story. For most people in Singapore, home is an HTB apartment like the one I'm standing outside right now. I grew up in one of these government built units, and my parents still live in one today. They're usually found in high rise blocks on clean tree line streets, and the largest are

big enough for a family of five like mine. The blocks look pretty unremarkable to anyone familiar with public housing, but they have a couple of uniquely Singaporean features. Here on the ground floor, there's an open sheltered space called the Void Deck. It's a shady communal gathering place out of the equatorial sunshine, and you will sometimes even see weddings and funerals held here. Inside newer flats, you'll often

find a built in bomb shelter. That's the worst case preparation measure, just in case the city is ever under attack, but mostly they just yet used as extra storage space. I have friends who is there as walking wardrobes or even makeshift wine salist and like almost everything in Singapore, HDB flats have been meticulously planned. I was very and viewers of the old cities in the West in Europe particularly and also Manhattan. That's Liu Tiger again, the architect

of modern Singapore. So I wanted Singapore to be as good as those and the second or strain as a planner, so I want to make sure that Singapore functions well. Liu and the HDB agency took into account everything from the facilities available in each neighborhood to even the amount of light that was needed. When there's no no good lighting, people are in a bad wood and therefore they tend to fight more. So all this things have been built

into the hardware from the get go. The founding leaders of Singapore determined that housing and home ownership would be one of the city state's core payless and for their kids it has been. But as prices keep going up, not everyone is convinced the government's plan is still working for everyone. Obviously, people need a place to live, right, they desire good places, high quality places to live, but they should focus on it as a good, not an asset.

That's Christopher g He's a senior researcher at a Singapore think tank called the Institute of Policy Studies has been looking at the city's approach to housing for the last decade. If you encourage that idea that it is an asset and people can speculate to grow wealthy, then it kind almost ends up in as your some game. But if people think a plant, this is a good right, then we do get good out of it. It's for your consumption.

You should buy it, utilize it for what it is worth to you, not to think that, okay, you can flog it onto somebody else at a higher price. What he's saying is that increasing property prices are a zero sum game because it would be buyas lose out, even as existing homeowners see their wealth grow. In other words, the system can lead to inequality, and Singapore's government worries about inequality, which can have a corrosive effect on social

cohesion and can even drive social unrest. Inequality is an issue that affects people's trust in each other. If there is a big difference in someone's lived experience, someone's opportunities, it's harder for you to understand and put yourself into the position of the other. It also strikes into the social compact. It strikes against the Singapole pledge right. We pledge ourselves to developer adjusting equal society, and I think

if we don't hold that, then there's something problematic. Singapore's reaches residents wouldn't blink at sucking out millions for a new pad, but soaring property prices, even for government built apartments, have become a real concern for many ordinary people. Even a relatively simple four bedroom public unit can go for more than four hundred thousand Singapore dollars, which is about

two D nine U S dollars. An apartment in a prime location can fetch more than three times that amount, and in Singapore's carefully planned housing market, things are even more complicated. For younger would be biased under thirty five don't qualify for subsidized HDB apartments known as built to order units or b t o s unless they are married. Abishak Rabbi Christian is one of those ordinary Singaportians who's worried by rising prices. I think it's a huge problem

the affordability. It's public housing, after all, but it doesn't match up to the price. What you're paying for it's not the paying field, but when public housing is meant to be more accessible to the public, so affordability is definitely a huge issue for me personally. Other Shack is thirty three years old, a young professional who doesn't yet have a family to worry about. It's a long way

from the bottom of singapore social economic ladder. Even so, his hopes of buying a property as an investment are dimming. We've all grown up with their mindset. But to me, I think exchanged over time after seeing what's happened, especially with the increased prices of public housing, which I essentially meant for the public, but the prices have gone up

because you're allowed to flip it around. Obviously, property can be an asset, but for some one whose middle income or lower mill income, I don't think it's a viable means of profity. Abishay is well aware of the benefits that the country has already seen as a result of these policies, but he's also resigned to the fact that he's unlikely to experience the same social uplift as previous

generations have enjoyed. At that point. The seventies and eighties decisions will meet with that generation in mind and how to move them forward. And obviously it's helped singapore development and growth over the last forty years has been phenomenal, so I don't think there's resentment to it. But right now the middle incomes getting squashed because it's very difficult to break out of that cycle. The pandemic showed Abish just how deep the divide between rich and poor can be.

For him, the real question is not just how Singapore managers is housing supply, it's whether everyday people still have the opportunity to thrive. I questioned the level of meritocracy. I've always questioned it, but because obviously we're living in the real world where connections, knowing people having strong networks, having come from different backgrounds, or having your background might

determine where you're gonna end up. So I don't personally believe that Singapore is society that's based completely on meritocracy. For me, personally, housing is I want to build a home for myself and a place where I can come back to and I feel a sense of belonging, So not only the actual property itself, but the surroundings as well. And that's a bit idealistic. On my part, but it has to be a place that means something to me, like carb shaped. Julian too, is in her early thirties

with the career and no family yet. COVID was one of the forces that prompted her to think about buying her own home. With the pandemic, it was a catalyst for a lot of people like myself to move out of their parental homes, and from there actually realized that I really enjoy living on my own. I really wanted to have a place that I could do it myself and really call a home of my own, rather than

her sprinting. Even though she got some help from her parents to make the purchase, surging prices were still a consideration. If I wasn't fortunate enough to her parents who were able to help me, I would have to wait until a thirty five to buy an HDB and that's just just as really unfortunate, right. She's still confident that she will make a profit on her purchase eventually, though a

smaller one than previous generations could have expected. So my parents they were able to nine x their original investment in the house. My sister about ten eleven years ago, she was able to double it, and I'm seeing that decrease over time. For sure. Personally, I would see it as a home and a long term assat. I have a couple of friends who have bought b t O s and they're hoping to flip it up after five

to six years. I'm not looking to do that sort of flipping, not at least for the next eight to ten years. I think it's all about the horizon that you have in mind. I do think that it will so be profitable and houses will only continue to go up in price. Joline's views aren't unusual. As long as housing behaves like an investment asset, it's all but inevitable that many people will continue to treat it like one.

But whether you see housing as an investment like Joline or as more of a consumer good like Abishaik, affordability is an issue that's hard to ignore. It's an issue I'm very familiar with myself. I'm thirty three years old, and in twenty twenty I did start thinking about purchasing my first property. To my surprise, prices skyrocketed despite the pandemic and the recession. I abandoned my plans, and I

wonder now whether I missed the boat. When my parents sold our five bed fled in two thousand and one, we moved into a smaller unit, and they made a big enough profit to buy the latest Nissan and to top up their savings account too. I know that kind of return is a way out of reach for me now. I get asked every now and then do I plan to buy an apartment. I'm too young to get an HDB as an unmarried person, and I'm not going to get married just so I can buy one. Finding a

girlfriend is a long enough process. Rising housing prices also scare me. Let's say, if my future wife wants to buy a home, maybe we'll do it. If I'm on my own, I might stick with renting and put my capital into stocks, cryptocurrency or are the investments. When I reached out to the National Development Ministry to comment for this story, a spokesperson said that HTB flats are primarily intended as a home for their owners to live in, as well as being a good store value for the

owner's retirement. That's in line with the ruling party's message about the property market. Since it faced unhappy voters during the first year of the pandemic well. The ruling People's Action Party has won every election since independence, and opposition politicians say the city's election rules make it very hard for anyone else to win. The government is still very

sensitive to signs that its popularity is slipping. About six months ago, it rolled out title loan limits and additional property taxes on second homes, the latest of several rounds of measures designed to cool house prices. It also announced it will increase the supply of housing, but it may well take more than these measures to change singaporeans attitudes to real estate. Paul Tumbaya, who is chairman of the opposition Singapore Democratic Party, says it's high time property was

handled more like a consumer good. Again, housing does not actually enable anybody to move up the social letter unless you have a rich father or mother. The vast majority of Singapore is more than eight percent of them own only a single property, the one in which they live. So sure, if the value of this property rises, they could be tremendously wealthy if they sell the property, But

then where are they going to live? The original goals of public housing in Singapore were very good and very noble. The idea is that you provide a safe roof over people's head, You provide them with electricity, with clean water, and so they can use their savings for other things, for other far more productive investments. So I think that's where housing needs to go back to to provide for a roof over the heads of the bulk of the population is calling for an overhaul of the city's housing model.

In the early days, you could only sell your HDB flat back to the HDB and then the government will put it into the general pool of property that's available and then somebody could buy it after that. This would be too drastic a step to put in it one fell swoop. So we've suggested that a certain portion of the housing stopped being non open market, so there would be open market flights which could be sold on the open market, and the non open market flights which would

have to go back to the HDB. And it's it's not going to be easy and people are going to have to come to terms with the idea of flipping property is not the solution, but I think that's more realistic. Paul's ideas aren't the only ones in the mix right now. Well, Singapore grapples with keeping housing affordable. Some observers even suggest Singapore should move away from its home ownership model and instead encourage renting, which is more common in places like

Germany or Japan. The pandemic force people around the world to think hard about how and where they were living. In Singapore, where home ownership has become a cornerstone of national identity and a key indicator of well being. It wrought simmering concerns about wealth disparity to the foe for young people, in particular, calls for housing to be treated as a good and not an investment asset. Maybe a signal that Singapore's original housing experiment is getting closer to

having run its course. It's the success story that our parents generation have been able to use to upgrade themselves. So it's hard and for the government to now do a reverse you turn and say that you know, we're going to shift to a different model, it would be very difficult and perhaps politically unpopular. People are going to be upset, right, but I think they can get over it. They can't be their parents. I don't think they want to be their parents. Singapore shows that a country can

drastically change its economic fortunes. It can also just as easily backslide. It takes the right mix of policies, interventions, and resources, but poverty and inequality are not foregone conclusions. Next week, on our final episode of this season of The Paycheck, we had to a utopia of economic equality to see if there are lessons to be learned for the rest of the world. The objective of the cooperative is not to produce rich people, is to produce rich societies.

At the end of the day, even if you are not rich, if you belong to a rich society, you will be happy. Thanks for listening to The Paycheck. This episode originally said that Singapore has no manufacturing sector. We've corrected the error as the category now accounts for of its GDP. If you like our show, please head on over to Apple Podcasts or wherever you listen to podcasts to rate, review and subscribe. This episode was hosted by

Me Rebecca Greenfield and reported by Forest mock Tar. It was edited by Ellis McDonald and Janet Paskin, with help from Francesca Levi, Racksheta Soluja and me. We also had editing help from Daniel Balby, Shelley Banjo, Christin B. Brown, Gilda to Carly, Nicole Flato, and Kai Schultz. This episode was produced by Gilda to Carly and sound engineered by Matt kim Our. Original music is by Leo Sidron. Special thanks to Magnus Hendrickson, We Get Into Kayper, Margaret Sutherland,

and Stacy Wong. Francesca Levi is Bloomberg's Head of Podcasts. See you next week.