Discussion on Global Public Housing Purchase Schemes

【Abstract】： In many nations and cities， selling public housing is an important government tool to increase home ownership rate of resident households. It plays an important role in public housing system to establish a link between affordable housing and home ownership. Those purchase schemes are widely argued. The paper will discuss pros and cons.

【Key words】： purchase scheme， public rental housing， right to buy

1.1 Global public housing purchase schemes

In the UK， the Right to Buy scheme is put into effect to encourage secure tenants of UK councils and housing associations with the legal Right to Buy their home in which they are living in at a large discount. In 1980， the Housing Act introduced ‘Right to Buy’， which has attracted wide attention， with over two million homes sold under this scheme （Ginsburg， 2005）[1]. The purchase application requirements differ in Wales， Scotland and Northern Ireland in the UK. Currently， it is observed that Scotland and Wales are already receiving less interest in the ‘Right to Buy’ policy than England. Scotland’s’ government is preparing to end the tenants right of buying any council house by the 1 August 2016. Meanwhile， in order to protect Wales’ social housing stock， the Welsh government also banned all sales of council homes in 2015.

Singapore has developed a unique housing system with homeownership financed through Central Provident Fund （CPF） savings and around 3/4 of its housing stock built and managed by the Housing and Development Board （HDB）. Up until 2013， around 80% of local residents lived in public housing that was provided by HDB， with 95% of them having ownership of their accommodation （Field， 1987） [2]. According to the Singaporean government， one of the government objectives is to achieve a fully home-owning society by the end of the twentieth century. The Home Ownership Schemes that encourage secure tenants to enjoy their rights of owning their own public houses was introduced in 1964. Consequently， Home Ownership Schemes have achieved a great success， which indicates the rent rate decrease of public housing in Singapore with majority of citizens have already have their own homes.

In December 1997， Hong Kong introduced the Tenants Purchase Scheme， which allows tenants who rented public housing from the Hong Kong housing authority to buy the flats they reside in. In Hong Kong， the first three phases have already achieved significant process in promoting the Tenants Purchase Scheme. In January 1998， there were around 27，000 flats offered for sale in six estates in the first phase. Following this， during the second phase and third phase， the Hong Kong government provided further housing stock in March 1999 and January 2000 with approximately 27 thousand flats offered in total. From the statistics detailing the Hong Kong tenants perception， there are 67.5% tenants applying for public housing in second phase and approximately 87% of tenants had indicated that they would like to purchase public housing under the Tenants Purchase Scheme. According to Hong Kong’s three-year program plan， there were around 104 thousand flats in 21 estates on sale from 2001 to 2003. The aim of the Tenants Purchase Schemes is to guarantee that at least 250 thousand families can purchase affordable public housing in the 10 years following the introduction of the schemes in Hong Kong.

1.2 Public housing purchase schemes： an international critique

Pros：

●Bring a considerable amount of sale receipts to local or central government（Disney and Luo 2014）[3]

●Provide financial security to the majority of the population （ King 2010） [4].

●To some extent， Right to Buy promotes mixed tenure. Those purchase schemes promote communities with mixed of incomes， of different tenures and of social characters （Tunstall 2002） [5].

●According to those purchase schemes in the UK， Hong Kong and Singapore， it provides people with more choices and they can also sell the house according to contracts.

Cons：

●Public assets with heavy discounts are sold at an unreasonably low price （ Kleinhans and Van Ham 2013） [6].

●The public rental housing stock and the total public housing resource will decrease if most of the public housing is sold. It may cause middle-low income groups to be unable to easily access housing resources in future （Pawson and Mullins 2009） [7].

●It is possible that individuals or speculating investors make a substantial profit from what were once public assets （Kleinhans et al. 2013） .

●The public housing with more advantages will be sold firstly. Then those left in the public housing stock will finally concentrate on some remote and undesirable locations （Kleinhans et al. 2013） .

●The purchase policy can increase the gap between the rich and poor （Arthurson 2010）[8].

●Mixed public housing includes renter and purchaser increase the possibility of conflicts（Arthurson 2010， p.1）.

Works Cited

[1] Ginsburg， N. 2005. The privatization of council housing. Critical Social Policy 25（1）， pp. 115-135.

[2] Field， B. 1987. Public housing in Singapore. Land Use Policy 4（2）， pp.147-156.

[3] Disney， R. and Luo， G. 2014. The right to buy social housing in Britain： a welfare analysis. IFS Working Papers.

[4] King， P. 2010. Housing Policy Transformed： The right to buy and the desire to own. Policy Press.

[5] Tunstall， R. 2002. The promotion of mixed tenure： in search of the evidence base. In Housing Studies Association Conference， York： Spring.

[6] Kleinhans， R. and Van Ham， M.2013. Lessons learned from the largest tenure-mix operation in the world： Right to buy in the United Kingdom. Cityscape， pp. 101-117.

[7] Pawson， H. and Mullins， D. 2010. After Council Housing： Britain’s New Social Landlords， Basingstoke： Palgrave Macmillan.

[8] Arthurson， K. 2010. Operationalising social mix： Spatial scale， lifestyle and stigma as mediating points in resident interaction. Urban Policy and Research 28（1）， pp. 49-63.