Reduce commuting time to sustain a liveable S'pore, suggests Tan Kin Lian.

For a sustainable Singapore

Tan Kin Lian / Senior Writer

I wish to contribute my suggestions towards the development of a “Sustainable Singapore, Lively and Liveable City”. I believe that the quality of life for Singaporeans can be improved by reducing the need for commuting, and making the journey more comfortable. It will also reduce the use of energy and cost of living.

Reduce Commuting

Many people spend up to three hours a day in commuting to work and returning home. Commuting wastes valuable time, leads to congested buses and trains and roads, and uses oil and energy. It leads to a stressful and poor quality of life.

I wish to give the following suggestions to reduce the need for commuting. We have to encourage and make it practical for people to:

– Work from home

– Work near the home

– Move their homes to be closer to their workplace

Some of my proposed measures have been implemented in the past, with varying degrees of success. We need to focus on these strategies and find ways to get better results.

Work from Home

Many types of work can be done from home, such as data entry, telephone-based customer service and marketing, software development, design and other activities involving the use of the computer and Internet access. This trend will continue as more people accept the concept of pay for output, rather than time spent in the workplace.

It can be facilitated by the setting up of an Internet portal for businesses and contact workers to get connected in this type of work.

Work near the home

Businesses can be given incentives or encouraged to set up workplaces (i.e. offices and production facilities) in or near residential towns. They will be keener to adopt this measure if they have access to low-cost facilities and be assured of being able to recruit people living nearby.

We need a new effort to promote this idea and educate the businesses and workers on the advantage of working near the home.

Move their home

We need measures to encourage people to move their homes to be near their place of work. Some people may be willing to do so, if they are more confident that they intend to make a long term career in a company that is likely to remain located in a certain place.

At present, there is a strong disincentive for a person to move his home. It involves selling the existing home (i.e. flat or private property) and buying a new home. The stamp duty takes away 3% of the purchase price of the new property. Legal fees and other transaction costs can add another 2%. For a property worth $400,000, the transaction cost can add another $20,000.

I suggest that the stamp duty should be waived and that the legal and other costs can be reduced considerably through simplifying the process.

We should make it easier for people to rent their homes and to reduce the fiscal disincentive against renting (as compared to home ownership). I shall discuss this matter in more detail later.

Home Ownership

We have to re-think our approach towards home ownership, as a way for citizens to have a stake in Singapore. We provide fiscal incentives for home ownership through direct subsidies in the purchase of a HDB flat, a subsidised interest rate and reduced property tax.

A person who rents a property has to pay a higher rental as the owner does not enjoy the fiscal incentives. It is more costly to rent a property than to be an owner occupier. There is also an insufficient supply of homes for rental. This reduces the attractiveness of renting as an option.

The home ownership policy encourages people to buy their home and to stay there for many years. As they are likely to work in other parts of Singapore, they have to commute long distances.

We can still retain the concept of home ownership to give citizens a stake in Singapore. They can be encouraged to invest in property through a Real Estate Investment Trust (REIT), including a residential REIT. We could, for example, set up a REIT comprising of rented HDB flats.

This new arrangement will still promote home ownership to give citizens a stake in Singapore. The home ownership does not need to be tied into a specific property that they live in. This will encourage a workforce that is more ready to change their home to a new rented property, close to their place of work.

This new arrangement will also be suitable for younger Singaporeans who wish to work in the region and still have a stake in Singapore through their ownership in a residential REIT.

The fiscal incentives given to an owner-occupier of a home can be extended to a Singaporean citizen who invests in a REIT (in lieu of direct home ownership).

Not applicable to everyone

Some people have argued that the concept of moving the home close to the place of work does not suit certain families, as they have other family members who work in other places or attend school. Some have to live near their parents.

I agree that this concept will not work for these people. We only need to find (say) 30% of people who find it to be suitable for their own circumstances, to reduce commuting and congestion by 30%. Every little step helps.

More comfortable rides

For the majority of Singaporeans who have to commute daily to work, I suggest that the rides be made more comfortable. We should run more train and bus services to give more people a chance to have a seat during the journey.

While this may be difficult during the rush hours (when the trains and buses are run at full capacity), it is possible during the off-peak hours. Currently, the operators reduce the frequency of the trains or buses to save cost and make more profits. The trains and buses continue to be packed during the off-peak hours as well.

My specific proposals are:

– Set up a portal to promote home-based work

– Waive stamp duty on the purchase of an owner-occupied home

– Remove the fiscal incentive against renting

– Promote the setting up of workplaces in residential towns

– Encourage investing in residential REITs

– Offer more comfortable trips on trains and buses

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