Located just 10 minutes from Singapore's bustling docks, Sentosa Cove is a world apart. The road leading into the city's super-posh residential complex runs past a championship golf course framed in tropical jungle. Four years ago much of the reclaimed land was barren; today a 117-hectare gated community with homes more than $10 million apiece has risen to become one the most select addresses in Asia, replete with waterfront boardwalks, meticulous landscaping and a yacht club. "These people who buy here have a choice to live anywhere in the world," says Jennie Chua, chairman of Sentosa Cove Pte Ltd, "so it's heartening that they've chosen to buy a home here."
Singapore has long been a magnet for expatriates. It's an ideal gateway for business people who travel regionally but want their families to enjoy a clean environment and First World amenities, including top international schools and state-of-the-art hospitals. The city's emergence as a vital Asian financial hub has added to the lure in recent years, attracting hordes of well-heeled bankers and fund managers. Government policies have moved toward recasting the port city, with a population of 4.5 million, previously known for its buttoned-down uniformity as the Monaco of the East. To that end, two new casino resorts are under construction, and the city will stage its debut Formula One Grand Prix next year.
So what's the problem? Admission to the "Singaporean Good Life" doesn't come cheap. Singapore, perhaps more than any other expat hub, has a two-tier housing system. While 1 percent of the population lives in high-end luxury homes, like those at Sentosa Cove, 84 percent of the rest live in public housing as private spaces become more unaffordable. "Public housing in Singapore is just not for the low-income. It's for the middle-income and even the upper-middle-income," says Mah Bow Tan, Singapore's minister for National Development.
The situation won't get better any time soon. Increasingly, the city's competitiveness hinges on the arrival of ever more foreign professionals. Some 30 percent of its population today are foreigners, compared with just 14 percent in 1990. Singapore's declining birthrate means this ratio will increase further. A bifurcated city is taking shape. On one side: a vibrant metropolis with tree-lined shopping arcades, fashionable bars and restaurants, gourmet grocers, art galleries and lavish condominiums. On the other: a public-housing heartland of small flats where most of the population resides, generally content, but without any real hope of escape as the price gap between private and public housing keeps widening.
Singapore's public housing was conceived of shortly after independence as a means to elevate poor Singaporeans from slums. Households could purchase or rent subsidized flats, often with government loans, in developments that rank among the best-managed facilities of their kind in the world. Buildings are usually well maintained. Strict integration policies also prevent them from becoming ethnic enclaves, as did housing projects in France or the United States, for example. Indeed, they were a critical component in the government's campaign to engineer a multi-racial society from a population consisting of Chinese, Malay and Indian immigrants.
Until recent years, the plan was to shrink the city-owned share of the housing stock over time, as owners who grew more prosperous sold their starter flats and moved into more-luxurious private digs, and fewer first-time buyers required subsidized housing. Now it looks like Singapore's rising international stature and popularity among expatriates could undermine that plan. Exploding home prices recently forced the Housing Ministry to raise the maximum grant for first-time buyers by 50 percent and relax the qualifying criteria for lower-income households. "This is quite a significant shift from several years back, when the government indicated that the role of [the Housing and Development Board] may be down-sized," says Chua Hak Chin, economist at Citigroup.
Efforts are also underway to spruce up the facilities. Recent designs look more like private housing; the architecture has become less utilitarian and more environmentally aware. One planned development even has a beach and a boat dock. Still, while such schemes might tamp down resentment felt toward the select few who can afford the gated-access lifestyle on display at Sentosa Cove, they don't change the fact that in Singapore, one of the richest places in Asia, even the middle class are now risking getting off the private-property ladder.