Superstar Cities, Inequality and Housing Policy

TOPIC: 

Superstar Cities, Inequality and Housing Policy

PROGRAMME

SYNOPSIS/ABSTRACT

Income and wealth inequality have been constantly debated, especially in recent years. Most studies, such as the recent and magisterial work by Thomas Piketty, compare inequality across countries and over time. National inequality measures, however, mask considerable variations across cities within the same country. A country’s biggest and most economically dynamic cities also tend to have the largest inequality gaps. These cities – what Joseph Gyourko calls “Superstar Cities” – are also distinguished by their high housing prices. Migration in and out of cities limits the extent to which Superstar Cities can use local redistributive policies (including housing policies) to reduce inequality.

As a Superstar City, Singapore competes with other global Superstar Cities for talents and investments. This limits the extent to which Singapore can use income and capital taxes to reduce inequality. Income inequality in Singapore, while higher than most OECD countries, is lower when compared to the global Superstar Cities. More significantly, as a land scarce city-state, Singapore has, in contrast to other Superstar Cities, managed to harness the entire spectrum of land and housing policies to reduce housing wealth inequality. As a result, a homeownership rate of 90% was achieved by the 1990s, which far surpasses comparable global cities. The on-going challenge, however, has been to guard against house price increases that can increase and entrench wealth inequality. This has required (and will continue to require) constant vigilance and government intervention in the housing markets.

ABOUT CELIA MOH PROFESSORIAL CHAIR

The Celia Moh Professorial Chair was established in Year 2000 by the late Mr Laurence Moh, former Chairman of Plantation Timber Products, in honour of his wife Celia Moh to commemorate their 40th wedding anniversary. The award serves to promote and recognise the outstanding work of a female faculty member in SMU.

ABOUT THE SPEAKER

Phang Sock Yong is the Celia Moh Professor and Professor of Economics at the School of Economics, Singapore Management University. She holds a PhD degree in Economics from Harvard University. Professor Phang researches in the areas of housing and transport economics, focusing on the impact of government policies on these sectors. She is the author of Housing Finance Systems: Market Failures and Government Failures (Palgrave Macmillan) and Housing Markets and Urban Transportation (McGraw Hill). She has also published numerous articles on housing, transport, and public private partnerships in books as well as international and local academic journals.