PERCEPTIONS OF FOREIGN WORKER DORMITORIES AND THEIR EFFECTS ON PUBLIC HOUSING PRICES

Abstract

The accommodation of foreign construction workers in Singapore has been an issue intertwined with the country's economic growth. As the nation's economy rapidly grows, the demand for large-scale developments and the construction of properties increases, necessitating the employment of foreign workers. However, Singapore's limited land space poses a challenge to constructing foreign worker dormitories in industrial zones and less frequented areas, resulting in the construction of these dormitories in residential areas. This has been met with resistance from Singaporeans who fear negative consequences such as overcrowding, increased traffic, and declining property values. The aim of this study is to investigate the impact of foreign worker dormitories on housing prices within 1.5 km of the dormitories, with the incorporation of the Difference-in-Differences (DID) methodology in the hedonic pricing model. Furthermore, a survey questionnaire was conducted to determine Singaporeans’ perceptions of foreign workers and their living conditions, their comfort level with foreign worker dormitories, and their willingness to purchase a home close to the foreign worker dormitories. Based on the results obtained using the difference-in-differences estimator, the development of foreign worker dormitories was found to have no causal relationship with public housing transaction prices. Additionally, survey results indicated that 63.2% of respondents would not consider buying a home near a foreign worker dormitory. However, the survey also revealed that the COVID-19 outbreak has caused a mostly positive change in perception towards foreign workers and their living conditions among 22.4% of respondents.