Why Singapore is better than Hong Kong
Why Singapore is better than Hong Kong
It's the housing
I think the biggest difference is simply housing.
82% of Singaporean citizens live in public housing which is generally high-quality stock. Only 49% of Hong Kong’s population lives in public housing with varying degrees of quality.
Perhaps even more significant is the fact that HDB (Housing Development Board) policy in Singapore is to transfer ownership of public housing units to qualified (i.e. most) buyers while in Hong Kong, the vast majority of public housing units are rental units on subsidized leases.
The difference between ownership and renting is huge. This is even more true in dense urban environments like Hong Kong and Singapore where real estate and housing costs are by far the largest line item in a typical household budget — and that is just counting the direct cost. Pricey real estate also shows up indirectly when you go buy groceries, eat at restaurants and send your kids to school — pretty much everything you buy is impacted by high rents or purchase prices. In dense urban environments, if you can solve the real estate and housing problem, you’ve already won the war.
Singapore’s policy to allow qualified buyers to purchase on a subsidized basis meant that owners all get to start with a bit of equity. It also means they have a direct stake in the growth and prosperity of the city-state and its economy. The result after five decades of huge wealth creation is that the vast majority of Singaporean citizens have been able to get rich together and rather equitably.
On the other hand, because they are almost all renting, Hong Kongers who live in public housing are not building up any equity. As renters, they have less incentive to take good care of their home vs. owner-occupiers — probably a big reason why public housing in Singapore seems so much nicer than public housing in Hong Kong these days. So while Hong Kong has also created significant wealth since over the past half-century, those gains have been distributed very unevenly.
The result after five decades? Today Hong Kong is one of the most unequal societies on the planet. In recent years, Singapore has experienced rising income inequality but it does not come close to Hong Kong. Hong Kong may have three times as many billionaires, but Singapore has far more millionaires.
The lifestyle of the median Singaporean is significantly better than that of the median Hong Konger. They have more space, better access to education, greater disposable income after housing expenses and more wealth. A very typical “middle class” family in Hong Kong lives in a 3-400 sf. apartment (if they are lucky) with very little natural sunlight. This level of quality of life probably doesn't even make the 2nd quintile for Singapore.
If Hong Kong truly wants to improve the lives of the majority of its citizens and combat its extreme inequality, it should take a page out of Singapore’s playbook — invest heavily in new public housing developments (plenty of land to do this, by the way) and sell at heavily subsidized prices to qualified buyers and/or effect an across-the-board transfer of subsidized public housing leases to its lessees.
I suspect the reason why this has not happened — and why in an otherwise efficient city the one thing people seem to always be waiting for is more public housing — has to do with heavily entrenched interests i.e. those who have a vested interest in keeping real estate prices high.
And that’s really a damn shame.
This was originally published on Quora in December 2017.