When pricing new public housing flats, should the government rely on the historical cost of land as a benchmark or its current market value?

Put another way, should you, as a home buyer, pay a price based on the actual cost of land to the government—a transaction which may have occurred decades ago—or should you pay an amount based on the land’s current value today? What is the key purpose of subsidised housing: an affordable place to live or an investment to make gains?

Despite Singapore having run its public housing program since the 1960s, such fundamental questions lack a clear answer. Using market values to determine pricing for new flats, as has been the case since inception, is an increasingly unaffordable approach given rising property values.

The time has clearly come to engage in an open debate on this very basic issue that has widespread policy implications.