Tan Kin Lian / Senior Writer
I wish to contribute my suggestions towards the development of a “Sustainable Singapore, Lively and Liveable City”. I believe that the quality of life for Singaporeans can be improved by reducing the need for commuting, and making the journey more comfortable. It will also reduce the use of energy and cost of living.
Reduce Commuting
Many people spend up to three hours a day in commuting to work and returning home. Commuting wastes valuable time, leads to congested buses and trains and roads, and uses oil and energy. It leads to a stressful and poor quality of life.
I wish to give the following suggestions to reduce the need for commuting. We have to encourage and make it practical for people to:
- Work from home
- Work near the home
- Move their homes to be closer to their workplace
Some of my proposed measures have been implemented in the past, with varying degrees of success. We need to focus on these strategies and find ways to get better results.
Work from Home
Many types of work can be done from home, such as data entry, telephone-based customer service and marketing, software development, design and other activities involving the use of the computer and Internet access. This trend will continue as more people accept the concept of pay for output, rather than time spent in the workplace.
It can be facilitated by the setting up of an Internet portal for businesses and contact workers to get connected in this type of work.
Work near the home
Businesses can be given incentives or encouraged to set up workplaces (i.e. offices and production facilities) in or near residential towns. They will be keener to adopt this measure if they have access to low-cost facilities and be assured of being able to recruit people living nearby.
We need a new effort to promote this idea and educate the businesses and workers on the advantage of working near the home.
Move their home
We need measures to encourage people to move their homes to be near their place of work. Some people may be willing to do so, if they are more confident that they intend to make a long term career in a company that is likely to remain located in a certain place.
At present, there is a strong disincentive for a person to move his home. It involves selling the existing home (i.e. flat or private property) and buying a new home. The stamp duty takes away 3% of the purchase price of the new property. Legal fees and other transaction costs can add another 2%. For a property worth $400,000, the transaction cost can add another $20,000.
I suggest that the stamp duty should be waived and that the legal and other costs can be reduced considerably through simplifying the process.
We should make it easier for people to rent their homes and to reduce the fiscal disincentive against renting (as compared to home ownership). I shall discuss this matter in more detail later.
Home Ownership
We have to re-think our approach towards home ownership, as a way for citizens to have a stake in Singapore. We provide fiscal incentives for home ownership through direct subsidies in the purchase of a HDB flat, a subsidised interest rate and reduced property tax.
A person who rents a property has to pay a higher rental as the owner does not enjoy the fiscal incentives. It is more costly to rent a property than to be an owner occupier. There is also an insufficient supply of homes for rental. This reduces the attractiveness of renting as an option.
The home ownership policy encourages people to buy their home and to stay there for many years. As they are likely to work in other parts of Singapore, they have to commute long distances.
We can still retain the concept of home ownership to give citizens a stake in Singapore. They can be encouraged to invest in property through a Real Estate Investment Trust (REIT), including a residential REIT. We could, for example, set up a REIT comprising of rented HDB flats.
This new arrangement will still promote home ownership to give citizens a stake in Singapore. The home ownership does not need to be tied into a specific property that they live in. This will encourage a workforce that is more ready to change their home to a new rented property, close to their place of work.
This new arrangement will also be suitable for younger Singaporeans who wish to work in the region and still have a stake in Singapore through their ownership in a residential REIT.
The fiscal incentives given to an owner-occupier of a home can be extended to a Singaporean citizen who invests in a REIT (in lieu of direct home ownership).
Not applicable to everyone
Some people have argued that the concept of moving the home close to the place of work does not suit certain families, as they have other family members who work in other places or attend school. Some have to live near their parents.
I agree that this concept will not work for these people. We only need to find (say) 30% of people who find it to be suitable for their own circumstances, to reduce commuting and congestion by 30%. Every little step helps.
More comfortable rides
For the majority of Singaporeans who have to commute daily to work, I suggest that the rides be made more comfortable. We should run more train and bus services to give more people a chance to have a seat during the journey.
While this may be difficult during the rush hours (when the trains and buses are run at full capacity), it is possible during the off-peak hours. Currently, the operators reduce the frequency of the trains or buses to save cost and make more profits. The trains and buses continue to be packed during the off-peak hours as well.
My specific proposals are:
- Set up a portal to promote home-based work
- Waive stamp duty on the purchase of an owner-occupied home
- Remove the fiscal incentive against renting
- Promote the setting up of workplaces in residential towns
- Encourage investing in residential REITs
- Offer more comfortable trips on trains and buses
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You probably have to raise the living costs higher and further screw the property market to enjoy more ‘improvements in the quality of life’ here.
If everyone is paid decently, by all means improve. But can you assured ministerial kind of pay for all in order to attain the kind of standard of living envisioned by those who can afford the ‘good life’?
We all need a trip to Bhutan to relearn how to think.
Allowing the populace to rent public housing has not worked out well in most places, including US and Europe. People have no sense of ownership and the neighbourhoods and dwellings are not taken care of by the residents.
I think some of your suggestions are not going to succeed with the govt, such as the exemption of stamp duties for owner-occupied home..
I think flexi or stagger hours in office or working for the admin staff will help to ease traffic congestion. This in turn will translate into comfortable public transport and less time use for travelling.
Schools can also help by not straining the traffic condition by starting later and ending before the usual 6-7pm rush hour. It has been discussed so many times before but not implemented. The ministries concerned must have the resolve to follow through each time a suggestion is tried and not just let it dies.
Child care centres and student care centres must be allowed near offices or industrial area. If cost is high, than subsidies should be given to help the operator. (Some large factories are willing to subsidies their canteen operator so that they can provide reasonable priced food for their staff)
I am used to travel early to work and I find that you can save on travelling time and you can also avoid all the ERP.
Hi serendib (#2)
You have quoted some examples of countries where the people do not take care of the rented properties. They tend to be from the poorer people, renting public property.
If the people are more well off, they tend to take better care of the property. This has been the experience of private property in Singapore rented to expatriates.
This is also the experience in Switzerland, where the tenants take care of the property (just my guess).
I like to offer this choice for some people, especially the younger ones, who are not ready to commit to a specific property. It is better that they rent a property that is closer to their place of work.
Some peole fear that the rental rate may fluctuate sharply. This can be avoided by signing a longer term lease. If there is a large pool of rented property that is rented for the longer term, the rental rates will be more stable.
I hope that this new concept is explored by the Government, and that renting should be given similar incentives as home ownership.
Hi Mr Tan,
Have you visited the current exhibition at the URA Gallery about Singapore’s Masterplan of development for the next 10-15 years?
It seems to be that in many regions, more space has been allocated for office/industrial use, to facilitate greater employment in areas closer to people’s homes.
This is probably in line with your suggestion to reduce the need for commuting.
Hi Kellt (#5)
It is also important to reduce the cost of moving a house. For example, if I live in Woodlands, and wish to take up work in Tampines, I should be able to sell my home in Woodlands and buy a new home in Tampines, without having to pay a heavy cost in stamp duty and legal fees, which adds up to 5% of the purchase price of my new home.
Alternatively, if I decide to rent out my home in Woodlands and to rent a new place in Tampines, I should be put in the same position as before, and not penalised two times through higher property tax on both non-owner occupied property. The penalty on property tax will translate into higher rental rates.
It is important for this matter to be addressed in a holistic manner, so that more people will be encouraged to live near their place of work.
Is the GDP growth sustainable?
Last time, GDP choing, who is so proud that they have done it?
Now time, GDP is not so great, can I say its due to globalization and oil? Maybe its just bad luck?
nowtime, I got so many things to think about.
Hi Sotong (#3)
I agree that most of the suggestions will not be considered by the Government. They have their own ideas, and will claim that they have thought through these issues before.
We should debate the concept separately among other circles. Maybe, someone else will listen one day.
I agree on your suggestions about:
> stagger working hours
> stagger schooling hours
> more childcare facilities near homes and workplaces.
We need many approaches to create a sustainable lifestyle.
Hi Shady Cabinet (#7)
You asked, “is our growth sustainable”?
In my view, it is not sustainable. The growth was achieved by importing many foreign workers to build our integrated resorts and MRT. The foreign workers add to the congestion in our public transport, health facilities and living space.
I welcome the foreign workers, but it is not sustainable to have an over-supply at the same time. They should be spaced out.
I also wish that we can treat our foreign workers with better living conditions and respect. Give them a good impression of Singapore as a nice place, rather than a place to sweat for a few dollars.
A few weeks ago, Comfort taxi imposed a 30 cent diesel surchage due to higher prices. As fuel prices have dropped 20% during the past few weeks, perhaps they should withdraw the surcharge (which they promised to).
I did some research and found this statement from Comfort. It looks like the diesel surcharge will continue for quite a long time:
http://en.china.cn/content/d343963,7ba501,1912_6577.html
I raised this issue about commuting time at a forum organised by the Feedback session.
One of the panel members, who comes from overseas, said that a study was made on the high economic cost of commuting. The commuting time takes away a large part of the available working hours.
Actually, this is quite easy to calculate. If a person spends 3 hours in commuting and works 8 hours a day, the cost of commuting adds to 27% of the economic cost.
If the person can reduce the commuting time to 1 hour, for example, by working closer to the home or in the same town, this can add 2 hours to the working time, and increase the productivity by 20%.
If it is not spend in working, it can improve the quality of life by 20% (i.e. the time that is available to spend with the family, on leisure, or self improvement).
Hong Kong Government houses 30% of the population in rented apartments. This is a viable option for people at lower incomes, and for young people.
The Spore Govt policy of “home ownership” for the people has its advantages and pitfalls. It is not all advantages. It reduces flexibility and did not take care of the group that needs rented properties.
I hope that we can have both options (i.e. ownership and rented properties) to cater to differeng groups of people.
Hi Mr Tan,
Thanks for raising this issue in such a concise manner.
The only real alternative to sustainability is to reduce consumption. Reducing commuting is a big part of that. Just imagine the millions of man-hours and petrol being wasted every year, sitting in idle traffic.
I’ve linked to you from http://www.starbamboo.com, great job everyone.
One step that the Government can implement, straight away, is to remove the stamp duty on property purchase. The Government does not need this revenue anyway (as it has many other sources of revenue).
By removing the stamp duty, some people may be encouraged to move their home to be closer to their place of work. They can save a lot of money and time on their commuting, and improve the quality of life.
It is also time to simplify the process of buying a house. There is no need to use a lawyer to check on title deeds (which was a legacy from several hundred years ago). Brokerage for property agents on property transactions should also fall. This can be achieved through a property portal to allow buyers and sellers to transact directly.
I hope that Singapore can take the lead in this strategy to reduce commuting.
Hi Mr Tan,
I support your idea of reducing communting time for work. On top of the reasons you have given for your suggestion, I would like to add that reduce travel would greatly reduce our carbon foot print too.
I remember HDB in the early 1980s use to support flat swapping by publishing ads in their monthly magazine. I know flat swapping does have its own set of problems but reduce travel, reduce stress and being more responsible to our environment may out weight any disadvantages flat swapping may have. Perhaps HDB and NTUC should start a portal to encourage flat swapping
Hi Wifi (#16)
Perhaps we should get many people to petition for the removal of the stamp duty. This will encourage flat swapping to be close to the place of work. Perhaps, someone can organise an online petition?
Mr Tan,
I like your ideas. Getting a bus and renting a flat are two of most frustrating things a person can do in Singapore. They’re somewhat similar, too – a long, sweaty wait, followed by an uncomfortable and pricey ride.
Looking at Singapore and its public transportation network, what strikes me the most is how much this city is spread out. Despite our obsessive belief that “land is scarce”, urban density in Singapore is remarkably low. One of the side effects of HDB’s success is that Singapore today has become an agglomeration of satellite towns, a cluster of suburbs without a real core.
Without a rethink of the way this city is planned, improvements to our public transportation system can only be limited. Addressing the issue of fiscal disincentives to renting would be a good start.
I get the feeling that private developers can also play a part in making renting more affordable. There’s a lot of demand for low-cost rental housing, from individuals and families who are willing to settle for smaller living spaces, and who don’t necessarily want the luxurious frills and fittings that accompany most condominiums. Private property doesn’t need to be luxurious.
Improving public transport involves re-thinking our notions of urban planning, of housing policy, of public service. Fundamentally, it involves accepting that public transport is more than just a matter of bringing people from point A to point B – it’s about letting them get on with the more enjoyable parts of living in the city.
http://void-deck.blogspot.com/2008/08/world-class-public-transportation.html
My friend toured Europe. The tourist guide said that it is usual for people in Europe to live within a few minutes drive from their place of work. This leads to a better quality of life.
I suspect that this lifestyle applies to the rural areas. In the cities, it is probably common for people to spend up to three hours daily in commuting.
It seems that city life is not well organised. We need to find a better way to re-organise city life, so that the quality of life can be improved.
REIT.
Currently the pricing of the unit to pay for the management fee is based on average daily market price.
The daily market price could be 30% of the net asset value of the unit when market for REIT is very low, and the number of units issued to pay for the management fee could be more than 3% of total number of unit, this will cause the dilution of the unit.
I suggest that the trust deed be amended. The pricing could be based on the net asset value of the unit instead of average market price when computing the number of units to be issued for Management Fee.