Why is HDB a private company?

Back in the early days of Singapore, when the HDB was first founded, it had the very laudable goal of producing a large quantity of cheap public housing, and to reflect its public service mission, it was a government department famously run by Lim Kim San, who worked for no salary for 3 years!

Nowadays, the situation is very different. Not least because it is hard to imagine the PM's wife (or the MM's daughter in law) working for no salary, but more seriously because the HDB was incoprorated into a private company in July 2003 then in 2004, it was 100% bought out by Temasek Holdings. To me this seems strange, HDB has gone from a selflessly run public service, to being owned by a profit driven private company, presumably with a highly paid board and shareholders demanding a dividend and return on equity. If you doubt the fact that Temasek is not a profit driven organisation, just look at the reaction on line every time they announce another huge loss on one of their investments, and their complimentary efforts to boast of their rates of return. So there inevitably will be some tension in HDB between providing an affordable public service to Singaporeans, and delivering profit to shareholders and Temasek Holdings.

So the question is whether this is a hypothetical conflict of interest or a real cause for concern to Singaporeans. This question doesn't have a simple answer, we can only try to infer the reality by look at the affordability of public housing to the average Singaporean. Luckily, the analysis has already been done for us by Eugene Yeo at Temasek Review and unfortunately the answer is that housing in Singapore is either "Unaffordable" or "Severely Unaffordable" by the internationally recognised Median Multiple measure.

Of course the Singapore government, through the state controlled media, would like to promulgate the idea that housing is perfectly affordable, the ultimate answer is for Singaporeans to ask themselves if they truly believe that, or if housing actually feels more expensive and harder to come by every year.