Speaker 1: The Singapore of today, the one featured in Crazy Rich Asians,
Speaker 1: with its luxury shopping malls, mansions and an airport complete
Speaker 1: with a butterfly garden and a movie theater. That's a
Speaker 1: relatively new phenomenon. Less than sixty years ago, Singapore was
Speaker 1: newly independent and incredibly poor. Three quarters of the city's
Speaker 1: population lived in overcrowded slums without electricity or proper sanitation.
Speaker 1: The environment was extremely bad. Just to prove it to you,
Speaker 1: you could actually blindfold yourself and you know you're at
Speaker 1: Singapore River. Why it could smell in Singapore River. That's
Speaker 1: the Singapore we will indose states. That's Low Tiker, and
Speaker 1: he's one of the main reasons the city is so
Speaker 1: different today. People call him the architect of modern Singapore.
Speaker 1: Lou always had dreams of bettering his circumstances and those
Speaker 1: of the city he grew up in. At a young age,
Speaker 1: he decided to study architecture so he could one day
Speaker 1: help build up Singapore. His studies took him to Australia,
Speaker 1: then Yale, and then to New York, where he worked
Speaker 1: for the famed architect I. M. P. Then he got
Speaker 1: the opportunity he had been preparing for In nineteen sixty nine,
Speaker 1: Louis asked to come back to Singapore to join its
Speaker 1: recently established Housing Development Board, or the HDB. Its goal
Speaker 1: was to improve the city's housing conditions, and the Government
Speaker 1: of Singapore decided, if we want to have a sustainable
Speaker 1: city compatible with all the other larger countries, we must
Speaker 1: achieve excellence. And one of the signs of removing backwardness
Speaker 1: is to remove the squats and house everybody in housing.
Speaker 1: But it was about more than just putting a decent
Speaker 1: roof over people's heads. Singapore is a tiny island state
Speaker 1: with no agricultural industry. Singapore's key resource is its people,
Speaker 1: so the government wanted to make Singapore somewhere people wanted
Speaker 1: to live and stay, a place they were invested in.
Speaker 1: When you own your own properties, then you feel that
Speaker 1: you have taken root in the society. And I also
Speaker 1: want to defend on the one to defend for the
Speaker 1: survival of the country. On the hand is to help
Speaker 1: build the economy of the country, and it went even
Speaker 1: further than that. The government also felt that if it
Speaker 1: met people's basic needs housing, education, health care, then they'd
Speaker 1: be able to thrive and in turn help Singapore's economy grow.
Speaker 1: Within a few years, more than four hundred thousand people
Speaker 1: were living in h GB rentals. Singapore must be one
Speaker 1: of the few places is in the world where a
Speaker 1: statutory board satisfactorily completed everything is set out to do
Speaker 1: in its first five year plan. Then in nineteen sixty four,
Speaker 1: the government want a step further and began to allow
Speaker 1: to encourage even lower middle income citizens to buy their
Speaker 1: apartments at prices well below market rates. After five years,
Speaker 1: they could sell them on the open market. That program
Speaker 1: allowed many Singaporeans to make a lot of money. If
Speaker 1: you bought an HDB apartment and sold it twenty five
Speaker 1: years later, you'd have made your money back more than
Speaker 1: ten times over. Today, Singaporeans expect to own their homes.
Speaker 1: Almost of the population does, and eventually to sell them
Speaker 1: at a profit. With one sweeping policy, Singapore had managed
Speaker 1: to ensure that the vast majority of its population had
Speaker 1: a clean, modern place to live, and it had boosted
Speaker 1: its economy. Singapore is now one of the richest countries
Speaker 1: per capita in the world. Then the pandemic ushered in
Speaker 1: Singapore's worst ever recession, and median household income fell for
Speaker 1: the first time in a decade, and while Singapore did
Speaker 1: a pretty good job containing the virus, the pandemic brought
Speaker 1: havoc to the city's carefully controlled real estate market. The
Speaker 1: economy shrank, but home prices continued to rise. The average
Speaker 1: private property now costs about fifteen times median household earnings.
Speaker 1: That's higher than New York, London or San Francisco. I
Speaker 1: do worry that nowadays the public housing presses is really
Speaker 1: a business venture then actually solving the housing need. I
Speaker 1: feel that the implication may not be very good for
Speaker 1: the economic development of Singapore. Jobless claims coming in, I
Speaker 1: mean really jumping from the week before, pretty brutal, three
Speaker 1: point to a million record six point six million Americans
Speaker 1: filed for unemployment last week. Indian working women, but the
Speaker 1: worst impact did the pandemic. Prices of public housing. We
Speaker 1: sail flats have hit an old time high in the
Speaker 1: first quarter of the year. Well now to the billionaire boom.
Speaker 1: According to Bloomberg, super yacht charters are up over three
Speaker 1: d and a billionaire was created every twenty six hours
Speaker 1: during this pandemic. It is time for a wealth tax
Speaker 1: in America. Welcome back to the paycheck. I'm Rebecca Greenfield.
Speaker 1: By many accounts, Singapore is a pandemic and an inequality
Speaker 1: success story. The country kept its COVID death rates relatively low,
Speaker 1: and it's a rich country where many people live relatively comfortably.
Speaker 1: But as we've learned this season, no place can fully
Speaker 1: insulate itself from the effects of a pandemic, and Singapore
Speaker 1: felt huge economic shocks that have hit its core affordable
Speaker 1: housing super hard. Like in many big cities around the world,
Speaker 1: demand for housing spiked during the pandemic. People were reevaluating
Speaker 1: their life choices and the homes they were suddenly spending
Speaker 1: way more time in, and they were enjoying record low
Speaker 1: interest rates. As a result, Singapore is becoming more and
Speaker 1: more stratified, and that's left its citizens starting to question
Speaker 1: whether the city's wildly successful housing experiment is still working
Speaker 1: for them. In the election, the ruling People's Action Party
Speaker 1: suffered its worst parliamentary results and more than sixty years
Speaker 1: of unbroken rule. Observers blamed the outcome on younger voters,
Speaker 1: and they're growing fears about inequality. They worry they can't
Speaker 1: match the economic advancement their parents enjoyed. If the problem
Speaker 1: remains unresolved. Singapore is at risk of losing its only resource,
Speaker 1: It's people. My colleague Forest Moctar grew up in Singapore
Speaker 1: and has worked as a reporter there for the past
Speaker 1: ten years. Here he is with the story. For most
Speaker 1: people in Singapore, home is an HTB apartment like the
Speaker 1: one I'm standing outside right now. I grew up in
Speaker 1: one of these government built units, and my parents still
Speaker 1: live in one today. They're usually found in high rise
Speaker 1: blocks on clean tree line streets, and the largest are
Speaker 1: big enough for a family of five like mine. The
Speaker 1: blocks look pretty unremarkable to anyone familiar with public housing,
Speaker 1: but they have a couple of uniquely Singaporean features. Here
Speaker 1: on the ground floor, there's an open sheltered space called
Speaker 1: the Void Deck. It's a shady communal gathering place out
Speaker 1: of the equatorial sunshine, and you will sometimes even see
Speaker 1: weddings and funerals held here. Inside newer flats, you'll often
Speaker 1: find a built in bomb shelter. That's the worst case
Speaker 1: preparation measure, just in case the city is ever under attack,
Speaker 1: but mostly they just yet used as extra storage space.
Speaker 1: I have friends who is there as walking wardrobes or
Speaker 1: even makeshift wine salist and like almost everything in Singapore,
Speaker 1: HDB flats have been meticulously planned. I was very and
Speaker 1: viewers of the old cities in the West in Europe
Speaker 1: particularly and also Manhattan. That's Liu Tiger again, the architect
Speaker 1: of modern Singapore. So I wanted Singapore to be as
Speaker 1: good as those and the second or strain as a planner,
Speaker 1: so I want to make sure that Singapore functions well.
Speaker 1: Liu and the HDB agency took into account everything from
Speaker 1: the facilities available in each neighborhood to even the amount
Speaker 1: of light that was needed. When there's no no good lighting,
Speaker 1: people are in a bad wood and therefore they tend
Speaker 1: to fight more. So all this things have been built
Speaker 1: into the hardware from the get go. The founding leaders
Speaker 1: of Singapore determined that housing and home ownership would be
Speaker 1: one of the city state's core payless and for their
Speaker 1: kids it has been. But as prices keep going up,
Speaker 1: not everyone is convinced the government's plan is still working
Speaker 1: for everyone. Obviously, people need a place to live, right,
Speaker 1: they desire good places, high quality places to live, but
Speaker 1: they should focus on it as a good, not an asset.
Speaker 1: That's Christopher g He's a senior researcher at a Singapore
Speaker 1: think tank called the Institute of Policy Studies has been
Speaker 1: looking at the city's approach to housing for the last decade.
Speaker 1: If you encourage that idea that it is an asset
Speaker 1: and people can speculate to grow wealthy, then it kind
Speaker 1: almost ends up in as your some game. But if
Speaker 1: people think a plant, this is a good right, then
Speaker 1: we do get good out of it. It's for your consumption.
Speaker 1: You should buy it, utilize it for what it is
Speaker 1: worth to you, not to think that, okay, you can
Speaker 1: flog it onto somebody else at a higher price. What
Speaker 1: he's saying is that increasing property prices are a zero
Speaker 1: sum game because it would be buyas lose out, even
Speaker 1: as existing homeowners see their wealth grow. In other words,
Speaker 1: the system can lead to inequality, and Singapore's government worries
Speaker 1: about inequality, which can have a corrosive effect on social
Speaker 1: cohesion and can even drive social unrest. Inequality is an
Speaker 1: issue that affects people's trust in each other. If there
Speaker 1: is a big difference in someone's lived experience, someone's opportunities,
Speaker 1: it's harder for you to understand and put yourself into
Speaker 1: the position of the other. It also strikes into the
Speaker 1: social compact. It strikes against the Singapole pledge right. We
Speaker 1: pledge ourselves to developer adjusting equal society, and I think
Speaker 1: if we don't hold that, then there's something problematic. Singapore's
Speaker 1: reaches residents wouldn't blink at sucking out millions for a
Speaker 1: new pad, but soaring property prices, even for government built apartments,
Speaker 1: have become a real concern for many ordinary people. Even
Speaker 1: a relatively simple four bedroom public unit can go for
Speaker 1: more than four hundred thousand Singapore dollars, which is about
Speaker 1: two D nine U S dollars. An apartment in a
Speaker 1: prime location can fetch more than three times that amount,
Speaker 1: and in Singapore's carefully planned housing market, things are even
Speaker 1: more complicated. For younger would be biased under thirty five
Speaker 1: don't qualify for subsidized HDB apartments known as built to
Speaker 1: order units or b t o s unless they are married.
Speaker 1: Abishak Rabbi Christian is one of those ordinary Singaportians who's
Speaker 1: worried by rising prices. I think it's a huge problem
Speaker 1: the affordability. It's public housing, after all, but it doesn't
Speaker 1: match up to the price. What you're paying for it's
Speaker 1: not the paying field, but when public housing is meant
Speaker 1: to be more accessible to the public, so affordability is
Speaker 1: definitely a huge issue for me personally. Other Shack is
Speaker 1: thirty three years old, a young professional who doesn't yet
Speaker 1: have a family to worry about. It's a long way
Speaker 1: from the bottom of singapore social economic ladder. Even so,
Speaker 1: his hopes of buying a property as an investment are dimming.
Speaker 1: We've all grown up with their mindset. But to me,
Speaker 1: I think exchanged over time after seeing what's happened, especially
Speaker 1: with the increased prices of public housing, which I essentially
Speaker 1: meant for the public, but the prices have gone up
Speaker 1: because you're allowed to flip it around. Obviously, property can
Speaker 1: be an asset, but for some one whose middle income
Speaker 1: or lower mill income, I don't think it's a viable
Speaker 1: means of profity. Abishay is well aware of the benefits
Speaker 1: that the country has already seen as a result of
Speaker 1: these policies, but he's also resigned to the fact that
Speaker 1: he's unlikely to experience the same social uplift as previous
Speaker 1: generations have enjoyed. At that point. The seventies and eighties
Speaker 1: decisions will meet with that generation in mind and how
Speaker 1: to move them forward. And obviously it's helped singapore development
Speaker 1: and growth over the last forty years has been phenomenal,
Speaker 1: so I don't think there's resentment to it. But right
Speaker 1: now the middle incomes getting squashed because it's very difficult
Speaker 1: to break out of that cycle. The pandemic showed Abish
Speaker 1: just how deep the divide between rich and poor can be.
Speaker 1: For him, the real question is not just how Singapore
Speaker 1: managers is housing supply, it's whether everyday people still have
Speaker 1: the opportunity to thrive. I questioned the level of meritocracy.
Speaker 1: I've always questioned it, but because obviously we're living in
Speaker 1: the real world where connections, knowing people having strong networks,
Speaker 1: having come from different backgrounds, or having your background might
Speaker 1: determine where you're gonna end up. So I don't personally
Speaker 1: believe that Singapore is society that's based completely on meritocracy.
Speaker 1: For me, personally, housing is I want to build a
Speaker 1: home for myself and a place where I can come
Speaker 1: back to and I feel a sense of belonging, So
Speaker 1: not only the actual property itself, but the surroundings as well.
Speaker 1: And that's a bit idealistic. On my part, but it
Speaker 1: has to be a place that means something to me,
Speaker 1: like carb shaped. Julian too, is in her early thirties
Speaker 1: with the career and no family yet. COVID was one
Speaker 1: of the forces that prompted her to think about buying
Speaker 1: her own home. With the pandemic, it was a catalyst
Speaker 1: for a lot of people like myself to move out
Speaker 1: of their parental homes, and from there actually realized that
Speaker 1: I really enjoy living on my own. I really wanted
Speaker 1: to have a place that I could do it myself
Speaker 1: and really call a home of my own, rather than
Speaker 1: her sprinting. Even though she got some help from her
Speaker 1: parents to make the purchase, surging prices were still a consideration.
Speaker 1: If I wasn't fortunate enough to her parents who were
Speaker 1: able to help me, I would have to wait until
Speaker 1: a thirty five to buy an HDB and that's just
Speaker 1: just as really unfortunate, right. She's still confident that she
Speaker 1: will make a profit on her purchase eventually, though a
Speaker 1: smaller one than previous generations could have expected. So my
Speaker 1: parents they were able to nine x their original investment
Speaker 1: in the house. My sister about ten eleven years ago,
Speaker 1: she was able to double it, and I'm seeing that
Speaker 1: decrease over time. For sure. Personally, I would see it
Speaker 1: as a home and a long term assat. I have
Speaker 1: a couple of friends who have bought b t O
Speaker 1: s and they're hoping to flip it up after five
Speaker 1: to six years. I'm not looking to do that sort
Speaker 1: of flipping, not at least for the next eight to
Speaker 1: ten years. I think it's all about the horizon that
Speaker 1: you have in mind. I do think that it will
Speaker 1: so be profitable and houses will only continue to go
Speaker 1: up in price. Joline's views aren't unusual. As long as
Speaker 1: housing behaves like an investment asset, it's all but inevitable
Speaker 1: that many people will continue to treat it like one.
Speaker 1: But whether you see housing as an investment like Joline
Speaker 1: or as more of a consumer good like Abishaik, affordability
Speaker 1: is an issue that's hard to ignore. It's an issue
Speaker 1: I'm very familiar with myself. I'm thirty three years old,
Speaker 1: and in twenty twenty I did start thinking about purchasing
Speaker 1: my first property. To my surprise, prices skyrocketed despite the
Speaker 1: pandemic and the recession. I abandoned my plans, and I
Speaker 1: wonder now whether I missed the boat. When my parents
Speaker 1: sold our five bed fled in two thousand and one,
Speaker 1: we moved into a smaller unit, and they made a
Speaker 1: big enough profit to buy the latest Nissan and to
Speaker 1: top up their savings account too. I know that kind
Speaker 1: of return is a way out of reach for me now.
Speaker 1: I get asked every now and then do I plan
Speaker 1: to buy an apartment. I'm too young to get an
Speaker 1: HDB as an unmarried person, and I'm not going to
Speaker 1: get married just so I can buy one. Finding a
Speaker 1: girlfriend is a long enough process. Rising housing prices also
Speaker 1: scare me. Let's say, if my future wife wants to
Speaker 1: buy a home, maybe we'll do it. If I'm on
Speaker 1: my own, I might stick with renting and put my
Speaker 1: capital into stocks, cryptocurrency or are the investments. When I
Speaker 1: reached out to the National Development Ministry to comment for
Speaker 1: this story, a spokesperson said that HTB flats are primarily
Speaker 1: intended as a home for their owners to live in,
Speaker 1: as well as being a good store value for the
Speaker 1: owner's retirement. That's in line with the ruling party's message
Speaker 1: about the property market. Since it faced unhappy voters during
Speaker 1: the first year of the pandemic well. The ruling People's
Speaker 1: Action Party has won every election since independence, and opposition
Speaker 1: politicians say the city's election rules make it very hard
Speaker 1: for anyone else to win. The government is still very
Speaker 1: sensitive to signs that its popularity is slipping. About six
Speaker 1: months ago, it rolled out title loan limits and additional
Speaker 1: property taxes on second homes, the latest of several rounds
Speaker 1: of measures designed to cool house prices. It also announced
Speaker 1: it will increase the supply of housing, but it may
Speaker 1: well take more than these measures to change singaporeans attitudes
Speaker 1: to real estate. Paul Tumbaya, who is chairman of the
Speaker 1: opposition Singapore Democratic Party, says it's high time property was
Speaker 1: handled more like a consumer good. Again, housing does not
Speaker 1: actually enable anybody to move up the social letter unless
Speaker 1: you have a rich father or mother. The vast majority
Speaker 1: of Singapore is more than eight percent of them own
Speaker 1: only a single property, the one in which they live.
Speaker 1: So sure, if the value of this property rises, they
Speaker 1: could be tremendously wealthy if they sell the property, But
Speaker 1: then where are they going to live? The original goals
Speaker 1: of public housing in Singapore were very good and very noble.
Speaker 1: The idea is that you provide a safe roof over
Speaker 1: people's head, You provide them with electricity, with clean water,
Speaker 1: and so they can use their savings for other things,
Speaker 1: for other far more productive investments. So I think that's
Speaker 1: where housing needs to go back to to provide for
Speaker 1: a roof over the heads of the bulk of the
Speaker 1: population is calling for an overhaul of the city's housing model.
Speaker 1: In the early days, you could only sell your HDB
Speaker 1: flat back to the HDB and then the government will
Speaker 1: put it into the general pool of property that's available
Speaker 1: and then somebody could buy it after that. This would
Speaker 1: be too drastic a step to put in it one
Speaker 1: fell swoop. So we've suggested that a certain portion of
Speaker 1: the housing stopped being non open market, so there would
Speaker 1: be open market flights which could be sold on the
Speaker 1: open market, and the non open market flights which would
Speaker 1: have to go back to the HDB. And it's it's
Speaker 1: not going to be easy and people are going to
Speaker 1: have to come to terms with the idea of flipping
Speaker 1: property is not the solution, but I think that's more realistic.
Speaker 1: Paul's ideas aren't the only ones in the mix right now. Well,
Speaker 1: Singapore grapples with keeping housing affordable. Some observers even suggest
Speaker 1: Singapore should move away from its home ownership model and
Speaker 1: instead encourage renting, which is more common in places like
Speaker 1: Germany or Japan. The pandemic force people around the world
Speaker 1: to think hard about how and where they were living.
Speaker 1: In Singapore, where home ownership has become a cornerstone of
Speaker 1: national identity and a key indicator of well being. It
Speaker 1: wrought simmering concerns about wealth disparity to the foe for
Speaker 1: young people, in particular, calls for housing to be treated
Speaker 1: as a good and not an investment asset. Maybe a
Speaker 1: signal that Singapore's original housing experiment is getting closer to
Speaker 1: having run its course. It's the success story that our
Speaker 1: parents generation have been able to use to upgrade themselves.
Speaker 1: So it's hard and for the government to now do
Speaker 1: a reverse you turn and say that you know, we're
Speaker 1: going to shift to a different model, it would be
Speaker 1: very difficult and perhaps politically unpopular. People are going to
Speaker 1: be upset, right, but I think they can get over it.
Speaker 1: They can't be their parents. I don't think they want
Speaker 1: to be their parents. Singapore shows that a country can
Speaker 1: drastically change its economic fortunes. It can also just as
Speaker 1: easily backslide. It takes the right mix of policies, interventions,
Speaker 1: and resources, but poverty and inequality are not foregone conclusions.
Speaker 1: Next week, on our final episode of this season of
Speaker 1: The Paycheck, we had to a utopia of economic equality
Speaker 1: to see if there are lessons to be learned for
Speaker 1: the rest of the world. The objective of the cooperative
Speaker 1: is not to produce rich people, is to produce rich societies.
Speaker 1: At the end of the day, even if you are
Speaker 1: not rich, if you belong to a rich society, you
Speaker 1: will be happy. Thanks for listening to The Paycheck. This
Speaker 1: episode originally said that Singapore has no manufacturing sector. We've
Speaker 1: corrected the error as the category now accounts for of
Speaker 1: its GDP. If you like our show, please head on
Speaker 1: over to Apple Podcasts or wherever you listen to podcasts
Speaker 1: to rate, review and subscribe. This episode was hosted by
Speaker 1: Me Rebecca Greenfield and reported by Forest mock Tar. It
Speaker 1: was edited by Ellis McDonald and Janet Paskin, with help
Speaker 1: from Francesca Levi, Racksheta Soluja and me. We also had
Speaker 1: editing help from Daniel Balby, Shelley Banjo, Christin B. Brown,
Speaker 1: Gilda to Carly, Nicole Flato, and Kai Schultz. This episode
Speaker 1: was produced by Gilda to Carly and sound engineered by
Speaker 1: Matt kim Our. Original music is by Leo Sidron. Special
Speaker 1: thanks to Magnus Hendrickson, We Get Into Kayper, Margaret Sutherland,
Speaker 1: and Stacy Wong. Francesca Levi is Bloomberg's Head of Podcasts.
Speaker 1: See you next week.