HOUSING UPGRADING SCHEME : AN EVALUATION

Abstract

Recent developments in urban renewal policy have tended to give greater weight to the rehabilitation and improvement of the existing housing. This is due to the greater cost effectiveness of rehabilitation which does not require the tearing down of the entire building structure. Besides, the retainment of the social fabric provides an additional incentive to the use of rehabilitation instead of renewal. Singapore's upgrading plan for the public housing is a fine example of housing rehabilitation. With the ageing of our earlier satellite estates such as Toa Payoh and Queenstown, and the rise in income and affluence, the need to upgrade our public flats is an important task which should not be delayed. In this academic exercise, we will first examine in Chapter 1 the housing and household characteristics of our HDB flats. In the same Chapter, we will also examine some of the problems of our public flats, which are the ageing of the estates and the outflow of the younger households, leading to a highly disproportionate distribution of the older households in the older estates. Chapter 2 will then cover the causes and consequences of these ageing estates. Factors such as income, credit terms and location are found to be the contributing factors to the decline of our old housing estates. The theoretical benefits and costs of the upgrading plan are then examined and it may be seen that though the monetary benefits is less than the monetary cost of upgrading, the total benefits may be greater than the total costs when we take into account the intangible benefits. In Chapter 3, we will introduce some models of the home improvement decisions. From these models, we are able to see that the main factors affecting home improvement decisions are income, age, tenure, housing and environment factors. However, higher income may cause households to move out of the older estates instead of improving them, though this likelihood for moving may be smaller as adjustment cost ( financial and psychological cost) increases. Chapter 4 will provide the comparison between the housing redevelopment and rehabilitation. A rough estimate of the cost effectiveness of upgrading a 4-room flat is worked out and it is found to be cost effective. Rehabilitation is found to be more superior than renewal for our public flats as they are still structurally sound. In all the three chapters of 2, 3 and 4, we recommended extensive housing upgrading for it to be more effective. Finally, some other policy issues such as subsidies and loans, and citizen involvement will be discussed in Chapter 5. It is found that the subsidies provided for upgrading the 3- room flats may not be sufficient to induce the 3-room households to stay.