Financialising public housing as an asset for retirement in Singapore

In Singapore, more than 85% of the one million households living in public housing own a 99-year lease on their flat. This high rate of ‘ownership’ has been enabled by allowing leaseholders to make pre-retirement withdrawals from their social security savings accounts for monthly mortgage payments, with the expectation that the flat will eventually be monetised to fund the lease-owner's retirement. In order to meet future retirement needs, the market value of public flats, therefore, must necessarily increase, preferably exceeding annual inflation, in order to preserve the capital invested. This paper examines a number of consequences and contradictions resulting from a system built upon an inflationary regime in which economic security in later life depends on sustained house price inflation. Having encouraged the entire nation to invest their retirement savings in owner-occupied public housing, the public housing authority and government together now bear responsibilities for ensuring both steady increases in property values and establishing regulations for monetising them. Lease-owners are in turn pressured to find ways to enhance their capital investments in their flats by working around the rules and regulations of ownership. Over time, however, persistent house price inflation has begun to create affordability problems for new entrants to the public housing market. Subsequently, the positive contribution of the universal public housing programme to the political legitimacy of the incumbent government is being transformed into a ‘burden’. Maintaining balance among the simultaneous and systemic contradictions with the public housing programme has thus become a constant preoccupation of the housing authority and the government.