Hacker News Reader

Comment by valarauko | Hacker News Reader

In theory, sure - but even Singapore hasn't been around long enough to witness what happens when the 99 year lease is finally up. In a market of housing shortage, there would be strong pressure on the government to keep extending the lease to keep the limited housing stock around, at least in an American context.

View on HN

the way this happens in singapore is pretty well defined

- properties can “top up” their 99 year lease, if the developers/owners want to.

- at the end of the 99 year lease, the owners can sell to a third party developer if there is demand (they’d still have to move). this has happened before many times too. this is called an en bloc sale in singapore.

also, keep in mind singapore also has 999 year leases and “freehold” (effectively the “forever” style of property ownership common in the usa). freehold properties are both rarer and more expensive.

something like 80% of the land in singapore is on a 99 year lease.

personally i think it is a fantastic system.

My concern is that while in theory this process seems fine, I wonder how it'll work in practice when long term leases actually end. For what it's worth, this is pretty much how public housing in India works as well, but we have yet to find out what happens when the leases actually come due. In India we can largely avoid the problem by throwing more and more "undeveloped" land towards housing. If anything, the government has a rather encouraging attitude to convert leasehold properties to freehold, at least for private residences built under the leasehold schemes.

> this has happened before many times too.

I assume this is developers selling before the 99 year lease is up, since the legal entity of Singapore and this leasing arrangement haven't been around long enough to see what happens when the lease is up.

If presumably 80% of the housing stock in SG is held in such an arrangement, what happens if a major chunk of leases come due in close succession of each other, eg, 10%? 10% of the population would be expected to move to housing stock which doesn't exist yet.

i don't have data to back this up, but i'm sure the data is out there, given how meticulous the singapore government is with their planning:

- i can't imagine the government will elect to demolish and resell the land to a new developer in the majority of the housing stock as it comes due. therefore, many of the residents will get a pay-day at the end of the 99 year lease, which will soften the blow of the lease end.

- this is all already priced into the property you buy, and you're doing it with your eyes wide open. what determines the price of the property you buy? factors like: (1) the closer the property is to the 99 year mark (2) the more the run down it is [and therefore likely to be torn down] (3) whether or not the property makes sense given evolving zoning/use/density/purpose requirements.

The issue is that at this point it is a largely theoretical exercise, and we don't really know how things will turn out when the leases do run out. There's a lot of things that have to align for things to go smoothly, and while you seem confident that the SG government will figure things out, I'm not sure that could work in probably any other country. Indeed, we don't really know if SG will handle it competently. Time will tell.

Your first 2 options are entirely at the discretion of the government.

The default is - the land goes back to the government and you get $0.

Some areas are being selected for lease extensions and other en bloc development (but that happens well before the lease is up).

But the government has come out and said “there will be few leases where that happens”.

yes, that's a fair point. it is entirely at the discretion of the government.

that being said, if it weren't, the concept of a 99-year lease wouldn't have any teeth.

indeed, your point is a central pillar of the land development policy in singapore -- the idea that things evolve and the government needs to make decisions for the 'greater good'. the same concept exists in the usa (imminent domain; a completely different implementation but still one that strips assumptive rights that a property owner has).

Singapore had some 60 year leases expire and it went as expected - residents left and the land was returned to the government.

https://www.straitstimes.com/singapore/all-191-units-at-geyl...

These were just 191 units, of which 135 were foreign workers who would have little sway anyway. If 80% of all land in SG is already held in lease from the government (and perhaps 80% of housing stock) in the ~ 60 years SG has been a nation state, more and more leases will come due very close to each in the future with greater and greater potential for a gap between housing supply and demand. This even assumes people will simply accept it. Sure, perhaps this might even work in the very specific context of Singapore, but I don't think this could work in the same way in the West.

The point is the 60-year lease went as the government promised. Residents leave, the land is cleared.

Why do you assume the government can’t plan out new property to replace the old?

There is no reason why they have to wait until the last day of the 99-year lease. There has already been talk of redevelopment of land prior to that.

The point is the government has made it clear - there will be no widespread lease extensions nor en bloc development. Most will simply expire.

> Why do you assume the government can’t plan out new property to replace the old?

I'm not - but this was 191 units. What happens when 20,000 units expire in a single year? You have a lot more confidence in government than I do. Besides, your top level comment was about how western countries could resolve their housing crisis with the SG model. My contention is that the SG model as it exists could only work in SG - if it does at all - which still remains to be proven in the coming decades.

Reply on news.ycombinator.com