Singapore: Where your home loses value & everyone's better off
Singapore solved private property by making it worthless over time.
This is part of “Let Cities Build Utopia,” an 11-part series on the future of cities. Collect the complete series as a print pamphlet, digital pamphlet, or audiobook. 👇🏻
Unlike any other city on earth, Singapore is also a country, which gives it full authority over land, master planning, and taxation.
The government even owns 90% of the country’s land, which means every person and business leases property from the state through 30, 60, and 99-year leases. More than 80% of the city lives in social housing.
For the first time, we can see Ebenezer Howard’s Garden City at scale, and wow. It works!
Singapore was a British Colony before it became a Japanese stronghold during World War II. When external forces withdrew, the island tried to join Malaysia but was expelled for fighting for racial equality and shared economic prosperity. Suddenly independent in 1965, with no natural resources, massive unemployment, and a severe housing shortage that quickly dissolved into slums and squatter settlements, Prime Minister Lee Kuan Yew passed the Land Acquisition Act, which gave the state full authority to appropriate private land at a discount.
The city began claiming land and using its Housing Development Board to build residential buildings on it. As each new building went up, units were sold as a 99-year lease. By then, citizens already had access to the British-installed Central Provident Fund (or CPF), a mandatory savings account that could only be used for housing, healthcare, and eventually retirement. Now they could use it to buy new leases. Just as we might take out a mortgage to buy a home, Singaporeans could take out a mortgage to buy a lease, and even use their CPF account for the down payment!
This created Howard’s housing scheme at scale, and one of the most unique land and building rent models around the world. If an individual purchases a condo with a 99-year lease and decides to sell it 20 years later, they’re selling a 79-year lease to the next person. They might still earn a small profit on the sale if the location has become more desirable, but by the time there are fewer than 49 years on the lease, the property declines in value. By the time there is one year left on the lease, it’s worth nothing.
When the lease ends, the unit and building revert to state ownership, which usually tears down the building to build another one, selling 99-year leases once again.
This system is unlike any other in the world. Housing is not an investment or a retirement plan—buying and holding real estate means holding something that ultimately goes down in value. The only reason to purchase a lease in Singapore is because residents want to live there at an affordable “set-by-the-government-not-the-market” rate. The government, meanwhile, uses that rental income to build more housing and earn more revenue.
The real money started coming in when the state began auctioning 30, 60, and 99-year land leases to corporations.