Originally posted on Quora March 14, 2023
Infamous internet tradcon Matt Walsh took to twatter and youtube to share his admiration for Singapore's airport and link it’s idyllic beauty and serenity to their draconian criminal justice system that executes drug traffickers and tortures petty thieves. Such a remarkable enthymeme might seem plausible if you know nothing about Singapore’s government other than its authoritarian and social conservative bent on crime and punishment and acknowledge no drastic differences with your own other than its relatively liberal and permissive bent on crime and punishment. If for instance you weren’t aware that Singapore is a large city state of about 5.5 million people, which although ethnically diverse, consists almost entirely of asian ethnic groups who have similar cultural norms and have lived around each other for thousands of year you might not find it reasonable to compare it to an empire of 338 million people who are spread between urban, suburban and rural settings with much more divergent and conflicting cultures and political leanings. Economies of scale, history, culture, demographics and the structure of government itself are all necessary confounding variables anyone should consider before making 1:1 comparisons between the American empire and small insular countries like Singapore, especially the last one. Like Hong Kong, Singapore maintains 85% of their land in a public leasehold system that is either managed by a public corporation, for industrial land, or town councils, for residential land wherein the state as landlord maintains ownership of the soil and collets ground rents for exclusionary use while the lessor retains the right to develop the land. Unlike the U.S. Singapore has a graduated property tax that is accessed on the annual rental value of the property. Owner occupied residential properties pay a lower tax rate than leased properties, which are also subject to an annual rental income tax, and a 10% surcharge is added on foreign owned properties and vacant land to curtail real estate speculation. To further curtail real estate speculation, foreign investors are restricted to the commercial property sector and capital gains from selling property within 3 years are subject to the income tax. Development of freehold land is subject to a development charge based on the evaluated increase in land value from the date that the approved planning application is secured while leasehold land is subject to a development premium which is evaluated as the difference between the value of the property before the approved change of use and terms and the value of the property after the changes of use and terms of the lease. And lets not forget the majority of their residents live in state financed flats that are passed down from generation to generation.
Without these land value capture mechanisms Singapore would be unaffordable to anyone but the ultra wealthy and resemble our Nantucket, Martha’s Vineyard or Lanai with population densities several times lower. Of course, resort islands aren’t the only places in the US where housing is unaffordable. Mainland metros like San Francisco, Los Angeles, Seattle, New York, and DC were unaffordable even before the lockdowns and eviction moratoria. For instance, in 2018 a family of four with 117K annual income was eligible for “low income” housing in SF; today it’s around 125K. Since then, the biggest rent hikes and property value appreciations have occurred in metros once considered affordable like Miami, Austin, Jacksonville and Newark.
While Singapore uses their land in its highest productive capacity, we use our land in the most lavish and wasteful manner conceivable. Suburban sprawl has been the default urban planning policy of the US since the New Deal. Unlike Singapore, our paradigm assumes that we have limitless land to sprawl over with low density single family house subdivisions, half of them as big as 2500 sqft, separated by highways from shopping malls, office buildings, warehouses and recreational parks. Our urban sprawl paradigm is a Ponzi scheme that requires perpetual expansion with federal and state subsidized infrastructure to offset the maintenance cost and depreciation of infrastructure for older developments that property taxes never fully remunerate. That is why we have 5 trillion in infrastructure outlays. That is why we can’t have nice airports, parks, schools, roads, bridges, public transit etc. We’re still betting all of our chips on urban sprawl with diminishing returns every decade.
What Walsh observes from the comfort of his luxury mansion is people on the lower end of the income distribution, usually low income and homeless individuals, sometimes poorly coping with the stresses of chronic underemployment, housing instability, poverty and debt burden with alcohol and illicit substances exacerbated by fatherless/broken homes and traumatic life experiences. The stress diathesis model explains the high rates of drug and alcohol abuse among the homeless (especially chronically homeless) and low-income workers and to a lesser extent all rent and debt burdened workers. Walsh being stuck in a bubble of affluence sees only the effects of real estate speculation and usury that concur with America’s world record rates of broken homes and single motherhood. Almost 400,000 American children are stuck in foster care. While only 5% of young adults come out of the foster care system (and group homes) it produces 13% of chronically homeless adults and 60% of child trafficking victims. In his follow up video, Walsh equates street dealers with tide pods being marketed as edible to argue that it is murder. This is a false equivalence. Street dealers don’t actively seek out addicts like DARE teaches kids. The opposite occurs. Mentally damaged people always find avenues to escape their unresolved traumas and illicit drugs offer an easy out.
Sources: Land Value Capture Mechanisms in Hong Kong and Singapore, Urban Land Rent: Singapore as a Property State, 5 things to know about Singapore Property Tax