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Public housing in Singapore is subsidised, built and managed by the Government of Singapore thorugh the Housing and Development Board (HDB). The majority of the residential housing developments in Singapore are publicly governed and developed, and home to approximately 80% of the resident population. These flats are located in housing estates, which are self-contained satellite towns with well-maintained schools, supermarkets, malls, community hospitals, clinics, hawker centres (food court) and sports and recreational facilities. Every housing estate includes Mass Rapid Transit (MRT) stations and bus stops that link residents to other parts of the city-state. Some estates are also complemented by smaller LRT stations which act as a feeder service to the MRT.

https://en.wikipedia.org/wiki/Public_housing_in_Singapore

The Singapore government owns/builds property and rents them out at fixed rates. Over time the rent prices of privately owned rental suites fall as publicly owned rental suites set lower prices. I am wondering why the government of Canada doesn't do that to control its own skyrocketing rent price issue.

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  • Comments deleted. Please don't use comments to speculate on what the answer could be. If you would like to answer, do proper research and then post a real answer based on facts.
    – Philipp
    Mar 2 at 19:40
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    "Over time the rent prices of privately owned rental suites fall as publicly owned rental suites set lower prices." Is there maybe a chart about this available? I wonder how much privately owned rental suites have fallen in price. More like a few percent or much more? Mar 2 at 20:56
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    Related question (for the UK): politics.stackexchange.com/q/10989/130
    – gerrit
    Mar 3 at 17:51
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    Can you say how this is about Canada, rather than every jurisdiction? Mar 3 at 19:43
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    Furthermore, could this question maybe deliver more details on "Canada's [...] skyrocketing rent price issue"? Like how much have the rents increased per person, per square meter rented and per income? Has the homeless rate increased dramatically? This would probably give much better context. Mar 5 at 6:18

3 Answers 3

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Canada is much different than Singapore, which is a condensed country with a highly centralized government. But urban planning and authority in countries like Canada and the U.S. is delegated at a local level, and sometimes from there it's even subdivided by neighborhood. And to understand the decisions of the local leaders, you have to understand the incentives for the people who vote them in.

Suppose you own a house or apartment in a highly desirable neighborhood with very low housing supply. When you want to rent it out or sell it, there are a hundred people lined up to pay. To maximize your payout, you should charge the highest possible amount that the richest person of that hundred will pay. That's a lot of money! Let's call it $1 million.

But suppose your neighbor is also selling. Well assuming all else is equal, if you charge $1 million, he can just charge $999K and the richest guy will move there instead. So the ceiling is now whatever the second-richest is paying, because that's the point where it no longer makes sense to underbid your neighbor. Let's say your property value is now $975,000.

Okay... now suppose the government comes and says, good news, we're going to build public housing on your street that will have hundreds of homes! The hundreds of buyers will be ecstatic of course, but every new home dilutes your selling power. And you know who's going to be REALLY angry? The guy who just paid $1 million to live here.

This is the basic incentivize structure driving "NIMBYism," short for "Not in My BackYard." That term is derisive because your average NIBMY claims that they don't oppose development or public housing per se, but boy, they just keep finding reasons why their neighborhood is not the place for it. The building will block their sun! The "wrong people" will move in! It'll strain the budget for our schools!

The politicians at that level do not work for people who WANT to move to their districts and cities. They work for the people who DO live there. And the NIMBYs are far more motivated (and usually more well-off) than the people for whom not living in the neighborhood is a purely theoretical loss. They become single-issue voters and donors, warping the incentive structure for those politicians to block development.

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This is an issue of time and scale. The most important number in your quote is the 80% figure. The Singaporean government owns and controls 80% of the housing market. So they have the power to control how rent prices in Singapore develop and what kind of housing is available for that price. A similar situation also exists in Vienna, which is also known for a very renter-friendly housing market.

Another country like Canada can not simply copy that. Sure, the Canadian government could build some subsidized housing and it probably does. But building new housing takes years and even if the government tries to do a large-scale housing project, it would still cover only a tiny proportion of the overall market. The rent could be cheap inside the project if the government chooses that, but it would be too small to affect the overall housing prices in any significant way. It would reduce rents overall somewhat so it does help, but the effect is generally too small to be noticeable.

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    "but the effect is generally to small to be noticeable" According to supporter of free markets the effect should not be too small to be noticeable, if you can substantially lower demand. Prices are what people are willing to pay. If less people hunt for private housing because they found public housing then surely rents would go down. Maybe Canada is not building enough. How man units per year is the Canadian government building? Mar 2 at 20:51
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    @NoDataDumpNoContribution That is the issue of scale. Canada has around 30 million inhabitants. Suppose the government invests $1 billion per year for the next 10 years. That would could as a major program for a country the size of Canada. If you can build brand new residences at a price of $100.000 per person that will build housing for 100.000 people or 0.3% over 10 years. The effect would be barely noticeable.
    – quarague
    Mar 3 at 6:23
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    @quarague Canada’s GDP is over $2 trillion. Something under 0.05% of that is not a “major program”. Suppose they did make it a major program and invested 1% of GDP, maybe $22 billion per year, for ten years. Using your numbers I make that 2.2 million people housed, which is certainly enough to affect the private rental market.
    – Mike Scott
    Mar 3 at 6:58
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    @quarague The US space program comes close. In 1966, NASA’s budget was 0.5% of US GDP.
    – Mike Scott
    Mar 3 at 7:07
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    @MikeScott This is a good example of a really major and well known government program. In its peak year it reached 0.5% of GDP. I think that proves my point that 1% of GDP every year for 10 years is not something that governments can just do even if they think it is a good idea.
    – quarague
    Mar 3 at 18:20
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Of course Canada does have public housing construction. For example, just a few days ago a major project was announced for Edmonton.

It's true, as the organization Homeless Hub points out in detail, Canada lags behind many other countries when it comes to public investment in affordable housing, but Singapore is even more an extreme outlier in the other direction.

If you're asking why Singapore and Canada have such different housing policies, the short answer is that they have very different geography, history and political cultures. Countries that have more in common with Canada like the United States also tend towards weak public housing investment.

As the history section of the Wikipedia article in the question makes clear, Singapore didn't develop it's current housing system yesterday. It came about through a unique and traumatic historical experience. For an established country like Canada to begin aggressively intervening in the housing market in a similar scale would likewise represent an almost revolutionary change.

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    "It came about through a unique and traumatic historical experience." Are there maybe some further sources about this unique and traumatic experience for Singaporeans in Wikipedia or elsewhere? This experience seems central to this question. Mar 2 at 20:54
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    @NoDataDumpNoContribution - probably a reference to events in 1964, 1965 and 1969
    – Henry
    Mar 2 at 21:23
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    @NoDataDumpNoContribution... What Henry said but I was thinking a bit earlier: the brutal Japanese occupation during WWII followed by the Malayan Emergency. Singapore was practically built from scratch in a very short time, both physically and socially.
    – Brian Z
    Mar 2 at 22:04

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