Policy Innovations for Affordable

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Sock-Yong Phang
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POLICY INNOVATIONS
FOR AFFORDABLE
HOUSING IN Palgrave Advances in
Regional and Urban
Economics
SINGAPORE
From Colony to Global City
Sock-Yong Phang
Palgrave Advances in Regional and Urban
Economics
 Sock-Yong Phang

Policy Innovations
for Affordable
Housing In Singapore
From Colony to Global City
Sock-Yong Phang
School of Economics
Singapore Management University
Singapore, Singapore

Palgrave Advances in Regional and Urban Economics

ISBN 978-3-319-75348-5    ISBN 978-3-319-75349-2 (eBook)
https://doi.org/10.1007/978-3-319-75349-2

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 For my husband Andrew and
our daughters Rachel and Christine
 Foreword

An ancient Chinese proverb asserts that while a government has strate-

gies, citizens have counterstrategies. Those words concisely frame the
challenge society faces in choosing from among the range of possible
government policy regimes. In a market economy, equilibrium prices and
quantities as well as the distributions of wealth and income that they
generate depend on a government’s tax and regulatory policies. The chal-
lenge is to choose a policy regime that produces equilibrium prices and
quantities that maximize an accepted measure of social welfare. Designing
policy well requires a good understanding of how citizens’ counterstrate-
gies depend on government strategies: it requires an economic theory
that works.
This book tells how public authorities in Singapore designed and
adapted policies for allocating land, capital, and labor in order to create
good places for Singapore citizens and residents to live and work, setting
the infrastructure for people in Singapore to create a poster-child East
Asian economic miracle of the late twentieth century. The book describes
economic models underlying policy makers’ strategies, their purposes,
and their expectations. It sorts through intended and unintended conse-
quences, and how policy makers adapted to unintended ones. The book
is, among other things, a fascinating analytical economic history about
how Singapore purposefully deployed a suite of interrelated public

vii
viii Foreword

­ olicies about land use, life-cycle savings, taxation, regulation, and ethnic
p
toleration.
A personal note: because Harvard’s late John R. Meyer advised both of
our PhD theses, Professor Sock-Yong Phang is my (much younger) aca-
demic sister. John Meyer was a master at combining economic theory,
data, and econometrics to discover how things worked. In Sock-Yong
Phang’s book, I think I see a part of John’s legacy that he would like. John
was very interested in US economic history and, with Alfred Conrad,
wrote a founding paper about the economics of slavery in the United
States. I think that the striking contrast between how the US federal gov-
ernment gave away vast holdings of lands or sold it at below market prices
and Sock-Yong’s detailed account of the very different way that Singapore
has managed its land would fascinate John. I know that it fascinates me.

New York, NY, USA Thomas J. Sargent

February 19, 2018
 Preface

As a global multiracial city-state with a land area of 720 square km and a

population of 5.6 million, Singapore has managed to develop a framework
for affordable housing that has resulted in a high homeownership rate of
91%. How did Singapore manage to achieve this in a fiscally sustainable way?
What were the roles of land acquisition and land use planning policies? How
was homeownership subsidized and financed? How did market deregulation
impact house prices? What policy instruments were used to contain housing
price bubbles? How did policymakers deal with ethnic preferences for segre-
gation? What has been the impact of housing policies on wealth distribution?
How do elderly homeowners extract home equity for retirement financ-
ing? What can other countries learn from the experience of Singapore?
I have spent much time over the past three decades researching the
above issues from the perspective of an urban economist. This book is the
culmination of my previous publications and current research on
Singapore’s housing policies. In this book, I distil the key housing policy
innovations, provide implementation details, analyse the impact of these
polices, explain the local context as well as necessary conditions for these
policies to work, and conclude with an assessment of their transferability.
In the process, I provide the answers to the above questions by presenting
the history and policy innovations introduced into Singapore’s housing
policy framework over five decades. The reader should note that part of

ix
x Preface

Singapore’s housing history has already been covered in some of my ear-

lier publications (as well as by other authors); however, repeating part of
the history is necessary for this book as it would not tell the full story
otherwise.
In sharp contrast to the situation in Singapore, the availability of
affordable housing for low- and middle-income households is a challeng-
ing social problem that many countries and cities continue to grapple
with. Recent rapid house price inflation has further deepened the divide
in urban societies between those who own properties and those who do
not. New housing sector regulations to curb housing demand by foreign-
ers have been recently implemented in several hot-spot cities across the
world.
Although it is a small city-state, Singapore’s experience in transforming
its housing sector since independence can be relevant to larger countries
as the urban housing market is a highly localized market. Singapore’s
experience has also been of particular interest to Commonwealth coun-
tries, as it inherited a western institutional structure from the British
colonial government when it gained independence. Developing as well as
former socialist economies that are exploring alternative systems of
affordable housing can also draw useful lessons from Singapore’s experi-
ence. This book provides an in-depth economic analysis of Singapore’s
housing policies and it is my hope that it will be a useful reference for
policymakers, city leaders, students and academic researchers in universi-
ties, think tanks, and international organizations who work on affordable
housing policies.

Singapore, Singapore Sock-Yong Phang

 Acknowledgements

In the process of researching and writing this book, I have accumulated

many debts along the way. First, I would like to thank Mr Liu Thai Ker
(Chairman of the Centre for Liveable Cities, CEO of the Housing and
Development Board between 1979 and 1989, and CEO and Chief
Planner of the Urban Redevelopment Authority between 1989 and 1992)
who suggested that I write a book on the economics of Singapore’s hous-
ing system in 2014. This prompted me to sketch the first outline for the
book. However, numerous other commitments in the intervening years
led me to put off embarking on a book-length project. In the interim, I
accepted several invitations to write and speak on Singapore’s housing
policies from the Asian Development Bank Institute, China Executive
Leadership Academy in Pudong, Fudan University, Hong Kong University,
Korea Development Institute, Korea Research Institute for Human
Settlements, the Lincoln Institute of Land Policy, the Singapore Economic
Review, Southwestern University of Finance and Economics, Tsinghua
University, and the World Bank Institute. I would like to thank these
organizations for their interest in my research on Singapore’s housing
policies and my co-authors during this period, David K.C. Lee, Kyung-
Hwan Kim, and Matthias Helble for helping to shape my views.
I am also grateful to Zhi Liu for the invitation to give a series of lectures
on real estate policies at the Peking University-Lincoln Institute Center for
Urban Development and Land Policy in the summer of 2017. Preparing
xi
xii Acknowledgements

the material for these lectures helped me conceptualize Chap. 5 on land

use planning and regulations. My colleague, Wen-Tai Hsu, provided
extensive comments on the chapter and I have benefited greatly from his
valuable suggestions as well as our discussions on the regulatory tax.
I delivered the Celia Moh Chair Professor public lecture at the
Singapore Management University (SMU) on March 23, 2015 on the
topic of “Superstar Cities, Inequality and Housing Policies”, upon which
Chap. 8 is based. I would like to thank my colleagues at SMU, in particu-
lar, SMU President Arnoud De Meyer, then Provost Rajendra Srivastava,
and Dean Bryce Hool, for conferring upon me the honour.
Chapter 9 is based on a talk, “Monetization of Housing: 3 puzzles”, that
I gave at the Housing Roundtable organized by SMU’s Centre for Research
on the Economics of Ageing (CREA) on August 16, 2017. I am grateful
to Professor Bryce Hool, Director for CREA and Dean of the School of
Economics at SMU, who has been the key person behind CREA and the
Singapore Life Panel® survey from which the statistics used in Chap. 9 are
drawn. The research for Chap. 9 (which draws on data from the Singapore
Life Panel® survey) was supported by the Singapore Ministry of Education
(MOE) Academic Research Fund Tier 3 grant MOE2013-T3-1-009.
The book only came together when Laura Pacey approached me in
2016 to consider publishing a second book with Palgrave Macmillan. She
has been a very patient and supportive editor, and I am grateful to her for
getting me to embark on the journey. I am grateful to Stephen Hoskins
and Naqun Huang at SMU for excellent research assistance. I would like
to thank Hites Ahir, senior research officer at the International Monetary
Fund, for very kindly reading the manuscript in its entirety and providing
helpful comments and edits.
I am deeply honoured that Professor Thomas J. Sargent very graciously
agreed to write the Foreword for the book. I have learned a great deal
more than economics from Professor Sargent who is not only a man of
exceptional learning but also embodies the enormous generosity and
kindness that are the hallmarks of a true scholar.
As always, my husband Andrew, my constant cheerleader, critic, and
sounding board, read the entire manuscript. His advice, comments, and
encouragement have been extremely helpful and his enthusiasm for the
project helped to spur me on. This book is dedicated to him and to our
daughters Rachel and Christine.
 Contents

1 Introduction   1

2 Land Acquisition for “Any Public Purpose”  13

3 Public Housing for Sale  27

4 Provident Fund Savings for Housing Finance  51

5 Facilitating Higher Housing Densities Through Land

Use Planning  67

6 Market-Responsive Housing Regulations  93

7 Building Diverse Neighbourhoods Through

Integration Policies 111

xiii
xiv Contents

8 Redistribution and Housing Wealth Formation 125

9 Home Equity Extraction for Retirement Financing 149

10 Transferability of Singapore’s Housing Policy

Innovations 187

 ppendix: Singapore’s Consumer Price Index, Exchange Rate

A
(S$/US$), and Interest Rate for Housing Loans, 1988–2017 201

Index 203
 Abbreviations

ABDS Additional buyer’s stamp duty

AHG Additional Housing Grant
BSD Buyer’s stamp duty
BTO Build-To-Order
CBD Central Business District
CC Construction cost
CPF Central Provident Fund
CPF LIFE CPF Lifelong Income For The Elderly
DBSS Design, Build and Sell Scheme
DC Development Charge
DGP Development Guide Plan
DTI Debt service-to-income
EC Executive Condominium
EIP Ethnic Integration Policy
FHA Federal Housing Administration
GDP Gross Domestic Product
GLS Government Land Sales
GST Goods and Services Tax
HDB Housing and Development Board
HECM Home Equity Conversion Mortgage
HELOC Home equity line of credit
HOS Home Ownership Scheme
HPF Housing Provident Fund

xv
xvi Abbreviations

HUD U.S. Department of Housing and Urban Development

HUDC Housing and Urban Development Company
IUP Interim Upgrading Programme
KHFC Korea Housing Finance Corporation
LAA Land Acquisition Act
LBS Lease Buyback Scheme
LTV Loan-to-value
LUP Lift Upgrading Programme
MAS Monetary Authority of Singapore
MC Management Corporation
MIR Monthly mortgage payment to gross monthly household
income ratio
MRT Mass Rapid Transit
MUP Main Upgrading Programme
NIMBY Not-in-my-backyard
NPV Net present value
NTUC National Trades Union Congress
OCBC Bank Oversea-Chinese Banking Corporation Limited
PAP People’s Action Party
PCP Project Completion Period
PHG Proximity Housing Grant
PIR Median house price to median annual household income ratio
PM Prime Minister
PPP Public Private Partnership
PR Permanent resident
REIT Real Estate Investment Trust
RM Reverse mortgage
S&CC Service and conservancy charges
SARS Severe acute respiratory syndrome
SERS Selective En bloc Redevelopment Scheme
SHB Silver Housing Bonus
SHG Special Housing Grant
SIT Singapore Improvement Trust
SLP Singapore Life Panel®
SOE State-owned enterprise
SPR Singapore Permanent Resident
SSD Seller’s stamp duty
TDSR Total Debt Service Ratio
URA Urban Redevelopment Authority
Unless otherwise stated, $ in this book refers to nominal Singapore
Dollars. The reader may refer to the Appendix on page 201 for data on
Singapore’s Consumer Price Index, exchange rate vis-à-vis the US Dollar,
and interest rate for housing loans for 1988 to 2017.

xvii
 List of Figures

Fig. 1.1 Housing price-to-income ratios for Singapore, 2000–2016

(Notes: For estimation of PIRs, I used the weighted average
of median resale price across HDB towns net of housing grant
for a 4-room HDB flat in 2016. The prices in earlier years
(2000–2015) are derived using the HDB resale price
index. The income data is the median household income
inclusive of employer’s CPF contributions for (i) all resident
households, and (ii) employed resident households; Data
sources: HDB and Singapore Department of Statistics
websites)7
Fig. 3.1 Stock of available housing in Singapore by dwelling type,
2017 (Source: HDB and Singapore Department of
Statistics websites) 32
Fig. 3.2 HDB and private housing price indices, 1975–2017
(Source: Singapore government websites) 39
Fig. 4.1 Central Provident Fund contribution rates (% of employee
wages), 1967–2017 (Source: Data from Central
Provident Fund) 53
Fig. 4.2 Central Provident Fund mobilization of domestic savings
for housing (Source: Phang (2013, modified)) 57
Fig. 4.3 HDB share of mortgage loans outstanding, 1995–2016
(Source: Data from Singapore Department of Statistics) 57

xix
xx List of Figures

Fig. 5.1 Stock of available private housing units, 1988–2017 (Note:

Includes Executive Condominiums; Source: URA REALIS
Database)77
Fig. 6.1 HDB income ceiling and median household income ($),
2000–2016 (Note: Median Household Income refers to
monthly household income from work (including employer
CPF contributions) among resident employed households;
Source: Data from Singapore government statistics) 98
Fig. 8.1 Comparing nominal house price indices for global cities,
2000–2017 (Sources for data: As for Table 8.2) 131
Fig. 8.2 Household sector assets and mortgage loans to GDP ratios,
1995–2016 (Source: Data from Singapore Department of
Statistics)141
Fig. 8.3 Housing wealth ratios, 1995–2016 (Source: Data from
Singapore Department of Statistics) 142
Fig. 9.1 Singapore total fertility rate (children per woman),
1960–2016 (Source: Data from Singapore Department
of Statistics) 151
Fig. 9.2 Singapore life expectancy at birth (resident population),
1980–2016 (Source: Data from Singapore Department
of Statistics) 152
Fig. 9.3 Distribution of wealth components (median values) by age
group, 2016. (a) Wealth components of 4-room HDB flat
homeowners (median $) by age group, (b) Housing equity as
% of total net wealth by age group & dwelling type (Note:
Housing wealth includes the primary residence and other
properties; Source: Data from Singapore Life Panel®) 156
Fig. 9.4 Median annual income and nondurable consumption by
age group ($), 2016 (Note: Annual income includes total
income from investment, wage, CPF, annuities, pension, and
government support in 2016; consumption only includes
nondurable consumption from Jan to Dec 2016; Source:
Data from Singapore Life Panel®) 157
Fig. 9.5 Obstacles to participating in the Lease Buyback Scheme
(% of respondents), 2017 (Source: Data from Singapore
Life Panel®) 174
Fig. 9.6 Self-reported barriers to selling housing to fund retirement
(% respondents), 2017 (Source: Data from Singapore
Life Panel®) 177
 List of Tables

Table 1.1 Price-to-income ratios (PIRs) for HDB flats at Sengkang

Town, 2017 5
Table 3.1 Housing stock, housing supply, and homeownership rate,
1970–201731
Table 3.2 Programmes under HDB’s estate renewal strategy 34
Table 4.1 CPF contributions and withdrawals by purpose, 2016
($ millions) 55
Table 4.2 The HDB-CPF framework (2016 statistics) 58
Table 5.1 Standard gross plot ratio / storey height typologies 75
Table 5.2 Concept Plan population projections 76
Table 5.3 Ten largest en bloc sales between 1995 and July 2017
(by sales proceeds) 80
Table 5.4 Government land sale for residential development:
Waterfront@Faber84
Table 5.5 HDB residential building works contracts, 2017 85
Table 5.6 HDB flats: resale prices and new flat prices, 2017 86
Table 6.1 Housing market segmentation for housing affordability 95
Table 6.2 Household income ceiling revisions for HDB and
middle-income housing 97
Table 6.3 Measures to curb house price increase, 2010–2013 105
Table 7.1 Residents in Bedok by dwelling type, 2016 115
Table 7.2 Ethnic limits under HDB’s Ethnic Integration Policy 118
Table 8.1 Household income Gini Coefficients for 5 global cities 128

xxi
xxii List of Tables

Table 8.2 House price annualized growth rates for 5 global cities,
2000Q1–2017Q1130
Table 8.3 Comparing housing outcomes in 5 global cities, 2016 132
Table 8.4 Types of housing grants for homeownership 133
Table 8.5 Grant amounts for housing purchase by household
income, 2018 136
Table 8.6 Buyer’s stamp duties (BSD) payable for purchase of
residential properties 139
Table 8.7 Progressive property tax structure for residential properties 140
Table 8.8 Housing wealth and house price changes by HDB and
private housing sectors 143
Table 8.9 Distribution of housing wealth by dwelling type, 2015 144
Table 9.1 Housing wealth, mortgage debt, and housing equity by
dwelling type, 2016 154
Table 9.2 Wealth components of households (aged 65–69) by
dwelling type (homeowners, median values, $’000, 2016) 155
Table 9.3 Contrasting US’s HECM and Singapore’s NTUC reverse
mortgage designs 165
Table 9.4 Lease Buyback Scheme: options for lease period  170
Table 9.5 Illustration of Lease Buyback Scheme  170
Table 9.6 Eligibility for Lease Buyback Scheme 173
 1
Introduction

The Affordable Housing Challenge

The issue of affordable housing cuts across geographical as well as eco-
nomic lines. The problem has become particularly pronounced both for
cities in developing countries facing rapid urbanization and in global cit-
ies that are magnets for immigration and global capital. A shortage of
adequate and affordable housing for low- and middle-income households
has risen to the top of the social and political agenda across cities in
China and India, as well as in hot spot cities of London, Paris, New York,
San Francisco, Vancouver, Toronto, Sydney, Melbourne, and Hong
Kong.
This is not surprising for a number of reasons: economic and popula-
tion growth is unevenly distributed across metropolitan areas, there has
been increased global capital flows into real estate investments, and hous-
ing constitutes the largest expenditure item for the majority of house-
holds. Tenure choice—whether to rent or own—is a major financial and
investment decision for most households. In many Asian countries, there
is a societal premium placed on homeownership and it is homeownership
affordability that is a major source of concern for young households.

© The Author(s) 2018 1

S.-Y. Phang, Policy Innovations for Affordable Housing In Singapore,
Palgrave Advances in Regional and Urban Economics,
https://doi.org/10.1007/978-3-319-75349-2_1
2 S.-Y. Phang

Owning a property, however, often requires an overall outlay that involves

multiples of the annual income for the average household. Given the
high cost of a long-life asset, and the attendant long-term commitment
of a mortgage as well as the substantial transaction costs involved, the
decision to purchase a property is not to be taken lightly.

 overnment Interventions for Affordable

G
Housing
To resolve the problem of housing affordability, government interven-
tions are widely accepted as necessary in order to channel resources into
housing and cope with the challenges of market failures, cross-border
capital flows, misaligned incentives, and, paradoxically, regulatory distor-
tions and failures. Governments intervene in housing finance, produc-
tion, transaction, and service delivery processes in multifaceted ways that
differ from country to country. Phang (2013) provides a review and dis-
cussion of the range of well-intended housing market interventions that
have been utilized, with outcomes that have, on occasion, been unex-
pected. In some contexts, such as the US subprime mortgage crisis of
2007, the consequences have been devastating, requiring massive inter-
ventions by governments. This raises policy questions on the appropriate
role of the government in the housing market, again with answers that
vary greatly across the world.
The International Monetary Fund (IMF) (2011) estimated an index of
government participation in housing finance markets for 33 advanced
and emerging economies. The index is a measure of the breadth of gov-
ernment intervention and is based on the presence or absence of the fol-
lowing eight policies to facilitate homeownership: (i) subsidies to
first-time or other buyers up front; (ii) subsidies to buyers through sav-
ings account contributions or through preferential fees; (iii) subsidies to
selected groups, low income; (iv) provident funds early withdrawal for
house purchase; (v) housing finance funds or government agency that
provides guarantees/loans; (vi) tax deductibility of mortgage interest; (vii)
capital gains tax deductibility; and (viii) state-owned institution majority
 Introduction 3

market player greater than 50%. Amongst the 33 countries in the IMF
study, Singapore topped the rankings for government participation in
both housing finance as well as homeownership.
Another recent study by Renaud et al. (2016) compared government
interventions in housing markets in six East Asian economies, namely,
Japan, China, South Korea, Taiwan, Hong Kong, and Singapore, paying
particular attention to housing supply interventions. The authors assessed
Korea to have the most intense degree of government intervention into
real estate, with Singapore second, and Hong Kong the least. Amongst
the six economies however, Singapore was exceptional in relation to the
share of housing built by the government agency, the Housing and
Development Board (HDB), as a proportion of the total housing stock.
While the 2016 figure is 73% for Singapore, the figures for the other
economies are much lower: Hong Kong (29%), China (< 10%), Korea
(5%), and Taiwan (1%). Singapore is thus unique in its housing supply
regime in both the dominance of the HDB as a housing developer and
the sale, rather than rental, of HDB-supplied housing on a 99-year lease-
hold basis. The dominance of the government has not precluded a vibrant
resale market as owners of subsidized new HDB flats are able to sell their
housing at market prices after a minimum period of 5 years of
occupancy.

Housing Affordability in Singapore

Introduction

From the general backdrop outlined briefly above, I turn now to the
thrust of the present book. Put simply, it focuses on the role of innovative
policies adopted to solve the housing affordability problem in the
Singaporean context. However, it is hoped that some of the policies that
have been implemented in Singapore would not only be of general com-
parative interest to other jurisdictions but might also prompt possible
practical reforms (by way of ideas, if not direct application) in some of
these jurisdictions as well. In this last-mentioned regard, a caveat is of
4 S.-Y. Phang

course necessary. In particular, it is acknowledged that each jurisdiction,

however, is different and the policies implemented to deal with the prob-
lem of housing affordability must necessarily be relevant to the local cir-
cumstances of the jurisdictions concerned.
In the next section, I will briefly compare housing affordability in
Singapore with other cities and over time using the housing price-to-­
income ratio. Following this backdrop, I will furnish the reader with an
overview of the present book, which discusses and analyses the various
policy innovations that have enabled Singapore to achieve housing afford-
ability and a sizeable homeownership rate despite its severe physical con-
straints. In this regard, the section will summarize the thrust of each of
the ensuing chapters of this book and how they relate to each other.

Housing Affordability Indicators for Singapore

As “ownership of housing built by HDB” is the dominant form of hous-

ing tenure arrangement in Singapore, this requires that housing afford-
ability indicators that are reported by various sources for purposes of
international comparison be interpreted with care. The most widely used
indicator of homeownership affordability is the median house price to
median income ratio (Median Multiple or Price-to-Income ratio (PIR)),
due to its simplicity and consequent ease of understanding. The aggrega-
tive data website, Numbeo, compares PIR for 267 cities across the world,
and estimates Singapore’s price- to-income ratio for 2017 as amongst the
highest in the world—at an astronomical 22.18 (Numbeo 2017). This
figure is, however, based on the price of a 90 square metre apartment in
the private housing sector and net average salary (multiplied by 1.5).
However, 80% of resident households in Singapore do not reside in the
private housing sector, but in the HDB sector instead.
A more reliable source for international housing affordability compari-
sons is the Demographia International Housing Affordability Survey.1 The
2017 edition of the survey provides PIRs for 406 metropolitan markets in
nine countries for 2016. The authors of the Demographia Survey consider
a PIR of between 4.1 and 5.0 as “seriously unaffordable”, and 5.0 and over
as “severely unaffordable”. The survey estimates the median multiple for
 Introduction 5

Singapore to be 4.8—in the “seriously unaffordable” category. In com-

parison, data from the survey show several “severely unaffordable” hous-
ing markets (PIR > 5.0) in the US, Australia, UK, Canada, New Zealand,
with Hong Kong topping the list with a median multiple of 18.1.2
In 2016, the annual median income for resident Singapore households
was S$93,000 and the median price of a 4-room HDB flat in the resale
market was S$451,000 (giving a PIR of 4.8). Eligible first-time citizen
homeowners in Singapore, however, enjoy subsidies in the form of hous-
ing grants when purchasing existing HDB flats in the secondary market.
A housing grant of S$30,000 in 2016 was available to first-time home-
owners purchasing a 4-room flat and this reduced the ratio to 4.5.
Additional housing grants are given to lower-income households (see
Chap. 8) as well as households that choose a resale flat with or close to
their parents or married child.
Moreover, the majority of first-time citizen homeowners purchase new
flats directly from the HDB at prices below market prices, together with
additional housing grants that vary with household income. Table 1.1
shows the PIRs that are reflective of these non-market transactions for

Table 1.1 Price-to-income ratios (PIRs) for HDB flats at Sengkang Town, 2017

New flat (A) Resale flat (B) New flat (C) New flat
applicants’ Price
HDB flat median annual Market List minus
type (size household price price grants MIRa
in sq m) income (S$) (S$) PIR (S$) PIR (S$) PIR (%)
2-room 21,600 n.a. n.a. 115,000 5.3 40,000 1.9 7
(45)
3-room 30,000 342,000 11.4 180,000 6.0 110,000 3.7 17
(65)
4-room 51,600 415,000 8.0 290,000 5.6 240,000 4.7 22
(90)
5-room 72,000 438,000 6.1 360,000 5.0 360,000 5.0 25
(110)
Notes: Sengkang town is about 17 km travel distance by road from the CBD
Data sources: HDB website at http://esales.hdb.gov.sg/hdbvsf/eampu09p.
nsf/0/17AUGBTOSK_page_8557/$file/pricing.html, http://www.hdb.gov.sg/cs/
infoweb/residential/buying-a-flat/resale/resale-statistics. Accessed 1 Nov
2017
a
MIR refers to monthly mortgage payment to monthly household income ratio
6 S.-Y. Phang

Sengkang town in Singapore. Column A shows PIRs using market resale

prices, column B shows PIRs using listed prices of new HDB flats, while
column C shows PIRs for households eligible for housing grants that vary
with household income of applicants. The PIR for new HDB flats with
grants is estimated at 1.9 for households purchasing 2-room flats and the
PIR increases to 5.0 for higher-income households purchasing 5-room
HDB flats. Housing affordability is thus much better for new flats pur-
chased from the HDB and also better for lower-income households buy-
ing smaller new flat types.
Although the PIRs for new flats are substantially below those based
on resale flats, an eligible household needs to be successful in balloting
at a project launch and then wait for 3 to 4 years for the project to be
completed. Similar to rent-regulated housing markets, housing afford-
ability in price-regulated markets therefore do not necessarily imply
housing availability. Singapore’s housing affordability based on new flat
prices masks market disequilibrium when demand exceeds available new
supply. When the allocation method was on a first-come-first-served
basis, the length of the waiting list and waiting period before flat alloca-
tion would indicate the extent of disequilibrium. When the allocation
method was changed to a registration for ballot for individual projects
(in order to determine if there is adequate demand), the ratio of those
unsuccessful in the ballot to available units provided a measure of unmet
demand.
Another indication of unmet demand in the new HDB flat sector
would be HDB resale prices, as households that are repeatedly unsuccess-
ful at ballots or do not wish to wait a few years for a new flat could pur-
chase a resale flat. The median resale price of a 4-room HDB flat minus
the housing grant available would thus be the appropriate market price by
which to estimate PIRs. Figure 1.1 shows the trends in PIR between 2000
and 2016, estimated using the weighted average of median resale prices of
a 4-room HDB flat net of family housing grant of $30,000. (The fam-
ily housing grant was increased to $50,000 in 2017.) There are two
reported median household income series that are available: one for all
resident households and the other for employed resident households. The
upper line shown in Fig. 1.1 indicates the PIRs calculated using median
household income for all households. Lower PIR values are obtained
 Introduction 7

6.0 5.8 5.7 5.7

5.4
5.5 5.2
4.9
5.0 4.7 4.7 4.7
4.5 4.6 5.1 5.1 5.1 4.5 4.5
4.5 4.9
4.2 4.2 4.2 4.7
3.9 4.3
4.0 4.2 4.2 4.2
4.1 4.1
4.0 4.0
3.5 3.7 3.7 3.7
3.6
3.0

2.5

2.0

PIR for all resident households PIR for employed resident households

Fig. 1.1 Housing price-to-income ratios for Singapore, 2000–2016 (Notes: For
estimation of PIRs, I used the weighted average of median resale price across HDB
towns net of housing grant for a 4-room HDB flat in 2016. The prices in earlier
years (2000–2015) are derived using the HDB resale price index. The income data
is the median household income inclusive of employer’s CPF contributions for (i)
all resident households, and (ii) employed resident households; Data sources: HDB
and Singapore Department of Statistics websites)

when employed household income data is used. For the series based on all
households, the range for PIR varies from a low of 3.9 in 2001 (when
there was an excess supply of new HDB flats) to a peak of 5.8 in 2010. It
entered the “severely unaffordable” range of above 5.0 between 2009 and
2013, leading to a roll out of a basket of demand-side cooling measures
and a ramping up of housing supply (see Chap. 6).
Given the multiples of home prices over income, homeownership
affordability is also dependent on the availability of housing loans (Phang
2013) and the terms at which these loans are offered. Low-income house-
holds that are assessed to be at higher risk of default may find difficulties
with obtaining a mortgage loan from financial institutions. Subprime
mortgages in the US are offered at higher interest rates and are also
insured by the federal government.
In contrast, the HDB provides mortgage loans to buyers of its flats,
thus making it the largest mortgage lender in Singapore in terms of
8 S.-Y. Phang

number of households served. HDB loans are offered based on loan-to-

value ratio of up to 90%, a maximum tenure of 25 years, and at a stan-
dard interest rate of 2.6% that does not discriminate against the
low-income borrower. The monthly mortgage payment to gross monthly
household income ratio (MIR) is widely used as a measure of mortgage
affordability and is also used by mortgage underwriters or lenders to
determine how much a household will be allowed to borrow. MIRs of
25% to up to one-­third are generally considered as the upper limits of
mortgage affordability. The last column of Table 1.1 shows the MIRs for
HDB new flats after grant subsidies. These vary from 7% to 25%,
increasing with household income and size of housing purchased.

Policy Innovations for Affordable Housing

Bearing the above backdrop in mind, this book discusses and analyses the
policy innovations that have enabled Singapore to achieve sustainable
housing affordability and a homeownership rate of 91% for its resident
households despite its severe geographical land constraint.
The foundations of Singapore’s present housing policy framework were
laid in the 1960s during a critical period of transition to postcolonial
independence. Singapore shares with several Commonwealth countries
historical roots, legal systems, and political institutions inherited from
the British colonial period. However, unlike most former colonies, it is an
island city-state with no rural hinterland, occupying only 720 square
kilometres of land. With a population of 5.6 million, it is amongst the
most densely populated countries in the world.
In the decades since the first elections were held in 1959 for self-­
government and since independence in 1965, Singapore has been gov-
erned by the People’s Action Party (PAP). For a brief 2-year period
between 1963 and its independence as a nation state in 1965, Singapore
was part of the Federation of Malaysia. Political stability has been further
enhanced by political leadership continuity with only three Prime
Ministers (PM) having led the country since 1959: PM Lee Kuan Yew
from 1959 to 1990; PM Goh Chok Tong from 1990 to 2004; and the
present PM Lee Hsien Loong since 2004.
 Introduction 9

It is widely acknowledged that Singapore’s economic performance

since independence has been remarkable. With a 2016 nominal GDP per
capita of US$53,000, it ranks amongst the top 10 high-income countries
in the world. There is a large body of literature on Singapore’s economic
development history.3 Similar to strategies for Singapore’s economic
development, its housing policies have not been founded on ideology,
but, rather, upon a pragmatic assessment of constraints and strengths.
The 1960s constituted the critical juncture when the newly elected gov-
ernment made amendments to legislation and institutions to address the
problems of unemployment as well as housing crisis faced by a newly
independent state.
The policy innovations for land, housing supply, housing finance, and
land use planning are covered in Chaps. 2, 3, 4, and 5. Chapter 2 dis-
cusses the changes to land acquisition legislation that removed the consti-
tutional right to private land ownership in Singapore and allowed the
government to acquire land at below market values. Chapter 3 reviews
the transformation of public housing from a social rental model under
the British to a homeownership model under the HDB. The achieve-
ments of the HDB and its organizational structure and practices that
have enabled it to avoid the inefficiencies common to state-owned enter-
prises will be analysed in this particular chapter. Chapter 4 discusses how
the HDB homeownership programme was complemented by changes to
the Central Provident Fund (CPF) in 1968. The fund was transformed
into a housing finance institution for financing homeownership when
legislation was enacted to permit withdrawals from CPF accounts to
finance the purchase of housing sold by the HDB.
Land use and housing regulations have major implications for housing
affordability and inclusiveness of urban neighbourhoods. High housing
prices in several cities can be attributed to regulatory obstacles to new
construction and higher density. In Chap. 5, we discuss how Singapore’s
land use planners did not follow the British land use planning model and,
instead, adopted planning practices that facilitated economic growth and
increases in housing supply. In the aftermath of the Global Financial
Crisis in 2008, macro-prudential regulations became a new buzzword in
Another random document with
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form communities consisting at times of a countless number of
individuals; but it has not been thoroughly ascertained whether these
are the produce of a single queen, as in the case of the hive-bee, or
whether there may be more than one egg-producer in each
community. The late F. Smith thought the former of these alternatives
would prove to be correct. These mosquito-bees are frequently
spoken of as stingless bees, but this is not quite correct, for although
they do not sting, von Ihering[34] says that all the essential elements
of the sting are present, the pointed or penetrating part of the
apparatus being stunted.

It would serve no useful purpose to attempt to construct the social

history of these stingless bees from the numerous brief scattered
accounts in entomological literature, for they refer to different
species; it is, however, positively stated by Smith on the authority of
Peckolt[35] that Trigona mosquito sends off swarms after the manner
of the hive-bee in this country, and that after searching six hives only
one royal female could be found in each.

Fig. 24.—Melipona sp. ♀. Amazons.

The nests of many of these little bees are rich in honey, and they
have a host of enemies from man and monkeys downwards; and as
they do not defend themselves by stinging, it might be supposed
they would have but a poor time of it. From the accounts that have
been published we may, however, gather that they are rich in
devices for the protection of their nests, and for the exclusion of
intruders. Bates has given some particulars as to Melipona interrupta
(fasciculata); it is about one-third shorter than the hive-bee, and its
colonies are composed of an immense number of individuals. The
workers are usually occupied in gathering pollen; but they also
collect clay in a similar manner, and convey it to the nest, where it is
used for building a wall to complete the fortification of the nest, which
is placed either in a suitable bank, or in a trunk of a tree; in either
situation it is completely built in with clay. A nest which Bates saw
opened contained about two quarts of pleasantly-tasted liquid honey.
Forty-five species of these little bees were found in different parts of
the Amazons Valley, the largest kind being half an inch in length, the
smallest very minute, not more than one-twelfth of an inch. These
little creatures are thus masons as well as workers in wax and resin,
and they are also gatherers of nectar, pollen, and resin.

According to Gosse, one of these bees is well known in Jamaica,

where they are called "Angelitos," in consequence of their not
stinging people. He observed a nest of this bee in a tree, and found it
to be much infested by black ants anxious to obtain entrance to it;
three bees, however, stood sentinel in the entrance, so as to
completely block it and keep out intruders, but the middle bee moved
on one side out of the way directly one of its fellows wished to come
in or out of the nest. The honey accumulated by this species is kept
in clusters of cups about the size of a pigeon's egg, at the bottom of
the hive and away from the brood-cells. The queen or mother-bee is
lighter in colour than the others, and has the hind body twice the
length of theirs.

Hockings[36] has given us some details as to the natural history of

two of these bees that inhabit Australia, where they are called
"Karbi" and "Kootchar," the first being, it is supposed, Trigona
carbonaria, Smith: it is usually about three-sixteenths of an inch in
length, the queen, when fully developed, being nearly twice that
length. The comb is built in a most peculiar form, being, it is said, in
the shape of a spiral staircase, and tapering towards the ends:
honey-pots and pollen are constructed for the storage of food. The
comb is encased in wax, and outside it a labyrinth of waxen
passages is formed. The entrance to the colony is guarded by a line
of bees who inspect every one that arrives, and it is surprising to see
how soon a stranger is discovered and pounced upon before it has
time even to alight; the intruder, when caught, is held by several
bees, who put it on the rack by holding and stretching out its limbs to
their full extent, retaining it in this position for as long as an hour, by
which time the unfortunate prisoner is usually dead. These bees, as
well as many other allied species, fight desperately with their
mandibles, and are apparently of a very fierce disposition. The other
species, called "Kootchar," is said to produce a very large number of
drones, and the habits and dispositions of the bees differ
considerably from those of the "Karbi": the entrance to their hive is
guarded by a pipe of propolis (a sort of resinous wax) about an inch
in length, having an exceedingly sticky outer edge, and it is by this
pipe alone that access to the interior can be gained. At night the
entrance is closed by numerous minute globules of semi-fluid gum
placed against it, thus forming a thin wall full of air-holes. The
colonies of "Kootchar" can be united by taking away a queen and
then packing her brood-nest, bees and all, against that of the colony
it is to be joined to. This cannot be done with the "Karbi." The
account given by Mr. Hockings contains a great many other
interesting details, and there can be no doubt that a full account of
the natural history of these Insects would be very instructive.

Fritz Müller has recorded a singular case bearing on the instinct of

these social Insects: he says that a nest of a small Trigona was built
in a hollow tree, and that as a consequence of the irregularity of the
hole the bees were obliged to give a very irregular shape to their
combs of honey. These bees were captured and put in a spacious
box (presumably together with the irregular comb, but this he
unfortunately does not mention): after a year, "when perhaps not a
single bee survived of those which had come from the canella tree,"
they still continued to build irregular combs, though quite regular
combs were built by several other communities of the same species
that he had kept. These bees, he also tells us, do not use pure wax
for the construction of their combs, but mix it with resin or gum that
gives it a peculiar odour and appearance. He captured two
communities of a common Melipona, one of which had the combs
made of dark reddish brown, the other of pale yellowish brown, wax,
and in captivity in a distant locality each of the two communities
continued to form its comb in the same way, thus showing the
continuity that prevails in these cases as long as circumstances
permit. Müller thinks this due to imitation, but it seems at least as
probable that it is due to perception of the properties of the nest. The
nest has a certain colour that the worker-bee matches.

Several species of the Melipona and Trigona were imported from

Brazil to France, and kept there for some time in captivity by M.
Drory. Girard has published[37] some details as to these colonies,
and is of opinion that some of them indicate an intelligence or instinct
superior to that of the honey-bee. The queen-bee of M. scutellaris
seems to display more intelligence than the corresponding sex of A.
mellifica. The mode of feeding the larvae apparently differs from that
of A. mellifica, a provision of pollen being first placed in the cell, then
some honey; when sufficient food for the whole consumption of a
larva is accumulated the queen deposits an egg in the cell, which is
at once completely closed by the worker. The interior of the abode of
these bees is quite dark, only a very small orifice being left, and in
this a sentinel is constantly on the alert. The same writer states that
Trigona crassipes has the very peculiar habit of always locating its
brood-comb in the nest of a species of Termes.

The honey-bee, Apis mellifica (Fig. 6), is considered the highest form
attained by the Anthophilous division of the Hymenoptera. The
differentiation of the three forms, male, female, and worker, is here
carried to a greater degree of perfection than in the other bees. The
drones are the males; the individuals we see gathering honey are
always workers, neither the male nor the female in this species
taking any part in procuring food for themselves or for the colony. In
addition to this the colonies formed may be described as permanent:
they do not come to an end at the close of one season, and
provision is made for the formation of a new colony while the old one
still persists, by means of a peculiar process called swarming. The
life-history of Apis mellifica and its anatomy and physiology have
been discussed in a whole library of works, and we need only notice
the chief features. When a swarm of bees leaves a hive it consists of
the queen-bee or female, and a number of workers, these latter
being, in fact, the surplus population that has been produced in the
hive. The swarm is not a nuptial flight, as is often supposed, but an
act of emigration. When this swarm has been housed, the bees
commence operations in their new quarters, by secreting wax; they
are enabled to do this by having consumed much saccharine food;
the wax is produced by means of glands in the hind-body over the
inner faces of the ventral plates of the abdominal rings, and it makes
its appearance there, after passing from the interior of the body
through some peculiar membranes on the ventral segments, in the
form of thin projecting plates. These the bee takes off with an
apparatus on the hind pair of legs and applies, after working up with
the mandibles, to form the cells in which young ones are to be
reared and food stored. A large number of bees working in common
thus produce the regular and beautiful structure known as the comb;
the queen afterwards lays an egg in each cell, and as these soon
hatch, great labour is thrown on the workers, which have then to
feed the young; this they do by eating honey and pollen, which,
being formed into a sort of pap by a portion of their digestive organs,
is then regurgitated and given to the young, a quantity of it being
placed in the cell, so that the larva is bathed by it, and possibly may
absorb the food by the skin as well as the mouth. When the colony is
in good progress and young bees emerge, these act as nurses, the
older ones cease to prepare food and act as foragers, bringing in
honey and pollen which are each stored in separate cells. The larva
in the cell increases its size and sheds a very delicate skin several
times; when the larva has reached its full size no more food is
supplied, but the worker-bees seal up the cell by means of a cover
formed of pollen and wax, in such a manner as to be pervious to air:
sealed up in the cell the larva spins a cocoon for itself, remains
therein for a little time as a larva, then changes to a pupa, and
thereafter bites its way out through the cover of the cell, and appears
for the first time as a new being in the form of a worker-bee; the
whole process of development from the egg-state to the perfect
condition of the worker-bee occupies about three weeks.
When the denizens of a hive are about to produce another queen,
one or more royal cells are formed; these are much larger than the
ordinary worker-cells, and of a quite different form. In this cell is
placed an egg, not differing in any respect from the egg that, if
placed in an ordinary cell, produces a worker; when the egg has
produced a larva this is tended with great care and fed throughout its
life with royal jelly. This food appears to be the same as that supplied
to an ordinary worker-larva when it is first hatched; but there is this
difference, that whereas the worker-larva is weaned, and supplied,
after the first period of its existence, with food consisting largely of
honey, pollen and water, the queen-larva is supplied with the pap or
royal jelly until it is full grown. Some difference of opinion exists as to
this royal jelly, some thinking that it is a different substance from
what the workers are fed with; and it is by no means improbable that
there may be some difference in the secretion of the glands that
furnish a part of the material composing the pap. The queen is
produced more rapidly than workers are, about sixteen days being
occupied in the process of her development. Only one queen is
allowed in a hive at a time; so that when several queen-cells are
formed, and queen-larvae nurtured in them, the first one that is
developed into a perfect queen goes round and stings the royal
nymphs to death while they are still in their cells. The production of
drones is supposed to depend chiefly on the nature of the egg laid
by the queen; it being considered that an unfertilised egg is
deposited for this purpose. There is still some doubt on this point,
however. Though there is no doubt that drones are produced in great
numbers from unfertilised eggs, yet there is not evidence that they
cannot also be produced from fertilised eggs.[38] The drone-cells are
somewhat larger than the ordinary worker-cells, but this is probably
not of much import, and it is said that the larvae intended to produce
drones receive a greater proportion of pap than worker-larvae do:
about twenty-four days are required to produce a drone from the
egg.

From this sketch it will be seen that the production of the worker (or
third sex, as it is improperly called, the workers being really females
atrophied in some points and specially developed in others) is
dependent on the social life, in so far at any rate as the special
feeding is concerned. There is good reason for supposing that A.
mellifica has been kept in a state of domestication or captivity for an
enormous period of time; and this condition has probably led to an
increase of its natural peculiarities, or perhaps we should say to a
change in them to suit a life of confinement. This is certainly the case
in regard to swarming, for this process takes place with comparative
irregularity in Apis mellifica in a wild condition. The killing of
superfluous queens is also probably a phenomenon of captivity, for it
varies even now in accordance with the numbers of the colony. It is
interesting to notice that in confinement when a swarm goes from the
hive it is the old queen that accompanies it, and this swarm as a rule
settles down near the old hive, so that the queen-bee being already
fertilised, the new swarm and its subsequent increase are nothing
but a division of the old hive, the total products of the two having but
a single father and mother. When a second swarm goes off from a
hive it is accompanied by a young queen, who frequently, perhaps,
in the majority of cases, is unfertilised; this swarm is apt to fly for
long distances, so that the probability of cross-fertilisation is greatly
increased, as the fertilisation of the young new queen is effected
during a solitary flight she makes after the colony has settled down.
But in a state of nature the colonies do not send off swarms every
year or once a year, but increase to an enormous extent, going for
years without swarming, and then when their home is really filled up
send off, it may be presumed, a number of swarms in one year. Thus
the phenomena of bee-life in a wild condition differ considerably from
those we see in artificial confinement. And this difference is probably
greatly accentuated by the action of parasites, the proportions of
which to their guests are in a state of nature liable to become very
great; as we have seen to be the case in Bombus.

Under these circumstances it is not a matter for surprise when we

find that the honey-bee has formed distinct races analogous to those
that exist in the case of the domesticated vertebrate animals. The
knowledge of these races is, however, at present very little
advanced, and is complicated by the fact that only imperfect
information exists as to the true species of the genus Apis. There is
a bee very like our common honey-bee found in southern Europe
called A. ligustica; this is certainly a variety of A. mellifica, and the
same remark applies to a bee found in Egypt, and called A. fasciata.
This gives the honey-bee a very wide distribution, extending possibly
over the whole of the palaearctic region: besides this, the species
has been introduced into various other parts of the world.

According to Karsch the honey-bee shows in Germany several

varieties, all of which belong to the northern form, which may be
spoken of as the A. domestica of Ray; the A. ligustica and A. fasciata
form as we have said distinct races, and it is a remarkable fact that
these races remain distinct even when imported into other climates;
though for how long a period of time this remains true there is very
little evidence to show. The northern form, A. domestica, is now
found in very widely separated parts of the world, in some of which it
is wild; Smith mentions it as occurring in the West India islands,
throughout the North American continent as far south as Mexico,
even in Central and Southern Africa, and in Australia and New
Zealand. The var. ligustica has been found also at the Cape of Good
Hope. The other species known of the genus Apis all belong to the
Old World, so that there is very little doubt that A. mellifica is also a
true native of the eastern hemisphere, and its original home may
possibly have been not far from the shores of the eastern portion of
the Mediterranean sea. Seven or eight other species of Apis are
known, all but one of which occur in Asia, extending as far as Timor
and Celebes. The exceptional one, A. adansonii, occurs in tropical
Africa and in Madagascar. Gerstaecker thought these species might
be reduced to four, but Smith's statement that the males and even
the workers show good distinctive characters seems to be correct.
Very little is known as to the honey-bees of China and Japan.

The queen-bee greatly resembles the worker, but has the hind body
more elongated; she can, however, always be distinguished from the
worker by the absence of the beautiful transverse, comb-like series
of hairs on the inner side of the first joint of the hind foot, the planta,
as it is called by the bee-keeper: she has also no wax plates and
differs in important anatomical peculiarities. The male bee or drone
is very different, being of much broader, more robust build, and with
very large eyes that quite meet in the middle of the upper part of the
head: he also has the hind leg differently shaped. The form of this
limb enables the male of A. mellifica to be distinguished from the
corresponding sex of allied species of the genus.

Fig. 25.—Portions of hind-feet, 1, of male, 2, of worker, 3, of queen, of

the honey-bee; series on the left, outer faces; on the right, inner
faces. a, Tip of tibia: b, first joint; c, second joint of tarsus.

We are indebted to Horne for some particulars as to the habits of A.

dorsata, an allied East Indian species. He informs us that these bees
greatly disfigure buildings, such as the Taj Mahal at Agra, by
attaching their pendent combs to the marble arches, and are so
pertinacious that it is almost useless to destroy the nests. This bee is
said to be so savage in its disposition that it cannot be domesticated;
it attacks the sparingly clad Hindoos with great ferocity when they
disturb its nest. Notwithstanding its inclination and power to defend
its societies this Insect appears to be destroyed wholesale. Colonel
Ramsay failed to establish hives of it, because the Insects were
eaten up by lizards. The crested honey-buzzard carries off large
portions of the comb, and devours it on a branch of some tree near
by, quite regardless of the stings of the bees; while the fondness of
bears for the honey of the "Dingar," as this species is called, is well
known.
Note to P. 33: It has just been discovered that a most remarkable
symbiosis, with structural modification of the bee, exists between
the females of Xylocopa, of the Oriental sub-genus
Koptorthosoma, and certain Acarids. A special chamber, with a
small orifice for entry, exists in the abdomen of the bee, and in
this the Acari are lodged.—See Perkins, Ent. Mag. xxxv. 1899, p.
37.

Note to P. 80: referring to the habits of social wasps in warm

countries. The anticipation we ventured to indulge in is shown to
be correct by the recent observations of Von Ihering.[39] He
states that social wasps in Brazil may be divided into two great
groups by their habits, viz. 1. Summer communities, lasting for
one year, and founded annually by fertilised females that have
hibernated—example, Polistes; 2. Perennial communities,
founded by swarms after the fashion of bee colonies—examples,
Polybia, Chartergus.

Note to Vol. V. Pp. 545, 546: The development of Encyrtus

fuscicollis has now been studied by Marchal, who has
discovered the existence of embryonic dissociation. The chain of
embryos and the epithelial tube in which they are placed, are
formed as follows: the Encyrtus deposits an egg in the interior of
the egg of the Hyponomeuta. This does not kill the egg of the
Lepidopteron, but becomes included in the resulting caterpillar.
The amnion of the Chalcid egg lengthens, and forms the
epithelial tube; while the cells within it become dissociated in
such a way as to give rise to a chain of embryos, instead of a
single embryo.—C.R. Ac. Paris, cxxvi. 1898, p. 662, and
translation in Ann. Nat. Hist. (7), ii. 1898, p. 28.
 CHAPTER II

HYMENOPTERA ACULEATA CONTINUED—DIVISION II. DIPLOPTERA OR

WASPS—EUMENIDAE, SOLITARY TRUE WASPS—VESPIDAE, SOCIAL
WASPS—MASARIDAE

Division II. Diploptera—Wasps.

Anterior wings longitudinally plicate in repose; the pronotum

extending back, so as to form on each side an angle reposing on
the tegula; the basal segments of the hind body not bearing
nodes or scales; the hind tarsi formed for simple walking. The
species either solitary or social in their habits; some existing in
three forms, males, females, and workers.

Fig. 26—Upper aspect of pronotum and mesonotum of a wasp,

Eumenes coarctata. a, Angle of pronotum; b, tegula; c, base of
wing; d, mesonotum.

This division of Hymenoptera includes the true wasps, but not the
fossorial wasps. The name applied to it has been suggested by the
fact that the front wings become doubled in the long direction when
at rest, so as to make them appear narrower than in most other
Aculeata (Fig. 27). This character is unimportant in function so far as
we know,[40] and it is not quite constant in the division, since some of
the Masaridae do not exhibit it. The character reappears outside the
Diploptera in the genus Leucospis—a member of the Chalcididae in
the parasitic series of Hymenoptera—the species of which greatly
resemble wasps in coloration. A better character is that furnished by
the well-marked angle, formed by the pronotum on the dorsal part
(Fig. 26). By a glance at this part a Diplopterous Insect can always
be readily distinguished.

Three families are at present distinguished in the Diploptera, viz.

Eumenidae, Vespidae and Masaridae. We anticipate that Eumenidae
and Vespidae will ultimately be found to constitute but one family.

Fam. 1. Eumenidae—Solitary True Wasps.

Claws of the feet toothed or bifid; middle tibiae with only one
spur at tip. Social assemblages are not formed, and there is no
worker-caste, the duties of nest-construction, etc., being
performed solely by the female.

The Eumenidae, or solitary wasps, are very little noticed by the

ordinary observer, but they are nevertheless more numerous than
the social Vespidae, about 800 species being known. In Britain we
have sixteen species of the solitary, as against seven of the social
wasps. The Eumenidae exhibit a considerable diversity in form and
structure; some of them have the pedicel at the base of the abdomen
very elongate, while in others this is so short as to be imperceptible
in the ordinary position of the body. A repetition of similar differences
of form occurs in the social wasps, so that notwithstanding the
difference in habits there seems to be no satisfactory way of
distinguishing the members of the two families except by the
structure of the claws and tibial spurs.

Fig. 27.—Eumenes flavopicta ♀. Burma. The wings on the left in the

position of repose, to show folding.
Fabre has sketched the habits of a species of Eumenes, probably E.
pomiformis. This Eumenes constructs with clay a small vase-like
earthenware vessel, in the walls of which small stones are
embedded (like Fig. 28, B). This it fills with food for the young. The
food consists of caterpillars to the number of fourteen or sixteen for
each nest. These caterpillars are believed to be stung by the parent-
wasp (as is the case in the fossorial Hymenoptera), but complete
evidence of this does not seem to be extant, and if it be so, the
stinging does not completely deprive the caterpillars of the capacity
of movement, for they possess the power of using their mandibles
and of making strokes, or kicking with the posterior part of the body.
It is clear that if the delicate egg of the Eumenes or the delicate larva
that issues from it were placed in the midst of a mass of this kind, it
would probably suffer destruction; therefore, to prevent this, the egg
is not placed among the caterpillars, but is suspended from the
dome covering the nest by a delicate thread rivalling in fineness the
web of the spider, and being above the mass of food it is safe. When
the young larva leaves the egg it still makes use of the shell as its
habitation, and eats its first meals from the vantage-point of this
suspension; although the mass of the food grows less by
consumption, the little larva is still enabled to reach it by the fact that
the egg-shell splits up to a sort of ribbon, and thus adds to the length
of the suspensory thread, of which it is the terminal portion. Finally
the heap of caterpillars shrinks so much that it cannot be reached by
the larva even with the aid of the augmented length of the
suspensory thread; by this time, however, the little creature has so
much increased in size and strength that it is able to take its place
amongst the food without danger of being crushed by the mass, and
it afterwards completes its metamorphosis in the usual manner.
 Fig. 28—Nidification of solitary wasps: section through nest, A, of
Odynerus reniformis; B, of Eumenes arbustorum. a, The
suspended egg of the wasp; b, the stored caterpillars. (After
André.)

It is known that other species of Eumenes construct vase-like nests;

E. unguiculata, however, according to an imperfect account given by
Perris, makes with earth a closed nest of irregular shape, containing
three cells in one mass. The saliva of these builders has the power
of acting as a cement, and of forming with the clay a very
impenetrable material. One species, E. coarctata, L. of this genus
occurs in Britain. The clay nests (Fig. 29) of this Insect are often
attached to the twigs of shrubs, while those of the two species
previously mentioned are usually placed on objects that offer a large
surface for fixing the foundations to, such as walls. According to
Goureau the larva of this species forms in one corner of its little
abode, separated by a partition, a sort of dust-heap in which it
accumulates the various débris resulting from the consumption of its
stores.

Eumenes conica, according to Horne, constructs in Hindostan clay-

nests with very delicate walls. This species provisions its nest with
ten or twelve green caterpillars; on one occasion this observer took
from one cell eight green caterpillars and one black. It is much
attacked by parasites owing, it is thought, to the delicacy of the walls
of the cells, which are easily pierced; from one group of five cells two
specimens only of the Eumenes were reared.

Fig. 29—Nest of Eumenes coarctata: A, the nest attached to wood; B,

detached, showing the larva. a, the larva; b, the partition of the
cell. (After André.)
Odynerus, with numerous sub-genera, the names of which are often
used as those of distinct genera, includes the larger part of the
solitary wasps; it is very widely distributed over the earth, and is
represented by many peculiar species even in the isolated
Archipelago of Hawaii; in Britain we have about fifteen species of the
genus. The Odynerus are less accomplished architects than the
species of Eumenes, and usually play the more humble parts of
adapters and repairers; they live either in holes in walls, or in posts
or other woodwork, or in burrows in the earth, or in stems of plants.
Several species of the sub-genus Hoplopus have the remarkable
habit of constructing burrows in sandy ground, and forming at their
entry a curvate, freely projecting tube placed at right angles to the
main burrow, and formed of the grains of sand brought out by the
Insect during excavation and cemented together. The habits of one
such species were described by Réaumur, of another by Dufour; and
recently Fabre has added to the accounts of these naturalists some
important information drawn from his own observations on O.
reniformis.

Fig. 30.—Odynerus antilope ♀. Britain.

This Insect provisions its cell with small caterpillars to the number of
twenty or upwards (Fig. 28, A.) The egg is deposited before the nest
is stocked with food; it is suspended in such a manner that the
suspensory thread allows the egg to reach well down towards the
bottom of the cell. The caterpillars placed as food in the nest are all
curled up, each forming a ring approximately adapted to the calibre
of the cell. Fabre believes these caterpillars to be partly stupefied by
stinging, but the act has not been observed either by himself,
Réaumur, or Dufour. The first caterpillar is eaten by the wasp-larva
from its point of suspension; after this first meal has been made the
larva is supposed to undergo a change of skin; it then abandons the
assistance of the suspensory thread, taking up a position in the
vacant chamber at the end of the cell and drawing the caterpillars to
itself one by one. This arrangement permits the caterpillars to be
consumed in the order in which they were placed in the cell, so that
the one that is weakest on account of its longer period of starvation
is first devoured. Fabre thinks all the above points are essential to
the successful development of this wasp-larva, the suspension
protecting the egg and the young larva from destruction by pressure
or movement of the caterpillars, while the position of the larva when
it leaves the thread and takes its place on the floor of the cell
ensures its consuming the food in the order of introduction; besides
this the caterpillars used are of a proper size and of a species the
individuals of which have the habit of rolling themselves up in a ring;
while, as the calibre of the tube is but small, they are unable to
straighten themselves and move about, so that their consumption in
proper order is assured. Some interesting points in the habits of an
allied species, O. (Pterocheilus) spinipes have been observed by
Verhoeff; the facts as regards the construction and provisioning of
the cell are almost the same as in O. reniformis. The species of
Odynerus are very subject to the attacks of parasites, and are, it is
well known, destroyed to an enormous extent by Chrysididae.
Verhoeff says that the wasp in question supplied food much infested
by entoparasites; further, that a fly, Argyromoeba sinuata, takes
advantage of the habit of the Odynerus of leaving its nest open
during the process of provisioning, and deposits also an egg in the
nest; the Odynerus seems, however, to have no power of
discovering the fact, or more probably has no knowledge of its
meaning, and so concludes the work of closing the cell in the usual
way; the egg of the Argyromoeba hatches, and the maggot produced
feeds on the caterpillars the wasp intended for its own offspring.
Verhoeff observed that the egg of the wasp-larva is destroyed, but
he does not know whether this was done by the mother
Argyromoeba or by the larva hatched from her egg. Fabre's
observations on allied species of Diptera render it, however, highly
probable that the destruction is effected by the young fly-larva and
not by the mother-fly.
Mr. R. C. L. Perkins once observed several individuals of our British
O. callosus forming their nests in a clay bank, and provisioning them
with larvae, nearly all of which were parasitised, and that to such an
extent as to be evident both to the eye and the touch. In a few days
after the wasps' eggs were laid, swarms of the minute parasites
emerged and left no food for the Odynerus. Curiously, as it would
seem, certain of the parasitised and stored-up larvae attempted (as
parasitised larvae not infrequently do), to pupate. From which, as Mr.
Perkins remarks, we may infer that (owing to distortion) the act of
paralysing by the wasp had been ineffectual. Mr. Perkins has also
observed that some of the numerous species of Hawaiian Odynerus
make a single mud-cell, very like the pot of an Eumenes, but
cylindrical instead of spherical. This little vessel is often placed in a
leaf that a spider curls up; young molluscs of the genus Achatinella
also avail themselves of this shelter, so that a curious colony is
formed, consisting of the Odynerus in its pot, of masses of the young
spiders, and of the little molluscs.

Horne has recorded that the East Indian O. punctum is fond of

availing itself of holes in door-posts where large screws have been;
after the hole has been filled with provisions, the orifice is covered
over level with the surface of the wood so that it eludes human
observation. It is nevertheless discovered by an Ichneumon-fly which
pierces the covering with its ovipositor and deposits an egg within.

The genus Abispa is peculiar to Australia and includes some very

fine solitary wasps, having somewhat the appearance of very large
Odynerus: these Insects construct a beautiful nest with a projecting
funnel-shaped entrance, and of so large a size that it might pass for
the habitation of a colony of social wasps; it appears, however, that
this large nest is really formed by a single female.

The species of the genus Rhygchium are also of insecticide habits,

and appear to prefer the stems of pithy plants as the nidus for the
development of the generation that is to follow them. Lichtenstein
says that a female of the European R. oculatum forms fifteen to
twenty cells in such a situation, and destroys 150 to 200 caterpillars,
and he suggests that, as it is easy to encourage these wasps to nest
in a suitable spot, we should utilise them to free our gardens from
caterpillars, as we do cats to clear the mice from our apartments.

The East Indian R. carnaticum seems to have very similar habits to

its European congener, adapting for its use the hollow stems of
bamboos. Horne has recorded a case in which a female of this
species took possession of a stem in which a bee, Megachile lanata,
had already constructed two cells; it first formed a partition of mud
over the spot occupied by the bee, this partition being similar to that
which it makes use of for separating the spaces intended for its own
young. This species stores caterpillars for the benefit of its larvae,
and this is also the case with another Eastern species, R. nitidulum.
This latter Insect, however, does not nidificate in the stems of plants,
but constructs clay cells similar to those of Eumenes, and fixes them
firmly to wood. Rhygchium brunneum is said by Sir Richard Owen to
obliterate hieroglyphic inscriptions in Egypt by its habit of building
mud nests amongst them. An individual of this wasp was found by
Dr. Birch when unrolling a mummy—"There being every reason to
believe that the Insect had remained in the position in which it was
found ever since the last rites were paid to the ancient Egyptian."

Fam. 2. Vespidae—Social Wasps.

Claws of the feet simple, neither toothed nor bifid, middle tibiae
with two spurs at the tip. Insects living in societies, forming a
common dwelling of a papery or card-like material; each
generation consists of males and females and of workers—
imperfect females—that assist the reproductive female by
carrying on the industrial occupations.

The anterior wing possesses four submarginal cells, as in the

Eumenidae. The attention of entomologists has been more directed
to the habits and architecture than to the taxonomy of these Insects,
so that the external structure of the Insects themselves has not been
so minutely or extensively scrutinised as is desirable; de Saussure,
the most important authority, bases his classification of the Insects
themselves on the nature of the nests they form. These habitations
consist of an envelope, protecting cells similar in form to the comb of
the honey-bee, but there is this important difference between the
two, that while the bee forms its comb of wax that it secretes, the
wasps make use of paper or card that they form from fragments of
vegetable tissue,—more particularly woody fibre—amalgamated by
means of cement secreted by glands; the vegetable fragments are
obtained by means of the mandibles, the front legs playing a much
less important part in the economy of the Vespidæ than they do in
that of the bees and fossorial Hymenoptera.

In most of the nests of Vespidæ the comb is placed in stages or

stories one above the other, and separated by an intervening space,
but in many cases there is only one mass of comb. It is the rule that,
when the cells of the comb are only partially formed, eggs are
deposited in them, and that the larva resulting from the egg is fed
and tended by the mother, or by her assistants, the workers; as the
larvae grow, the cells are increased in correspondence with the size
of the larva; the subsequent metamorphosis to pupa and imago
taking place in the cells after they have been entirely closed. The
food supplied is of a varied nature according to the species, being
either animal or vegetable, or both.

Fig. 31—Section of the subterranean nest of the common wasp, Vespa

germanica, in position. (After Janet.) a, One of the chambers of an
 ant's nest, Lasius flavus, placed above the wasps' nest; b, root to
which the first attachment of the nest was made; c, secondary
attachments; d, the first-made attachment; e, a flint within the
envelopes of the nest; f, the chief suspensory pillar of the second
layer of comb; g, lateral galleries; h, one of the secondary pillars
of suspension between two layers of comb; i, the layers of wasp-
paper forming the envelope of nest; j, vacant space round the
nest; k, flints that fell to the bottom during the work of excavation;
l, numerous larvae of a fly, Pegomyia inanis (?) placed vertically in
ground beneath the nest; m1 to m7, the layers of comb, in m2 the
cells are indicated, in m8 (above the main figure) the arrangement
of the three cells forming the commencement of the new layer of
comb, m7, is shown; n, gallery of access from surface; o, burrow
of a mole; p, interval of 90 mm. between top of nest and surface;
q, height of the nest, 163 mm.

Although the nests of the social wasps are very elaborate

constructions, yet they serve the purposes of the Insects for only a
single season. This is certainly the case in our own country. Here
each nest is commenced by a single female or queen; she at first
performs unaided all the duties for the inauguration of the colony;
she lays the foundation of the cells, deposits the eggs in them, feeds
the young, and thus rears a brood of workers that at once assist her,
and for the future relieve her of a considerable portion of her former
occupations; the nest is by them added to and increased, till the cold
weather of the autumn is at hand; at this time many males and
females are produced; the cold weather either destroys the
inhabitants of the nest, or reduces their vitality so that it is impossible
for them to pursue successfully the avocations necessary for their
subsistence, and they succumb to adversity. The young females,
however, hibernate, and each one that lives through the winter is the
potential founder of a new nest in the way we have already
described. It might be supposed that in tropical countries where no
cold season occurs the phenomena would be different, that the
colonies would be permanent, and that the nests would be inhabited
until they were worn out. De Saussure, however, informs us that this
is not the case, but that in the tropics also the colonies die off
annually. "The nests are abandoned," he says, "without it being