Two Side of the Same Coin? Neoliberalism, Social Housing and Class in Southeast Asia


Author: Dr Sidh Sintusingha, University of Melbourne

Abstract

In the contemporary environment of fluid, instantaneous cross-border investments and exchanges of products, images and ideas, the paper interrogates social housing as an interconnected, interrelated and relative phenomenon across social class, cities and national borders. The interrelatedness and relativeness are framed and discussed through the notion of modernization/modernity and socio-economic class aspirations. In this context, short of a radical shift in global wealth redistribution advocated by Thomas Piketty, social housing depends on the success of the neoliberal model of economic growth. Here, subsidized housing are sustained with revenue from the expansion of GDP – whether directly through taxation and/or indirectly through development controls, and the mode of delivery is increasingly through the multiple manifestations and degrees of public-private partnerships. Through discussions of examples from Southeast Asian cities, the paper argues that the key ingredient of social capital, its formation, expansion and expenditure needs to be integral in the production of social housing to increase the inhabitants’ capacity to negotiate with powerful state and market forces and untangle the hegemonic inequality explicit in global housing practices.

Keywords: Neoliberalism, social housing, class, Southeast Asia, social capital

Introduction

“As oil prices suffered more sickening blows this week, and iron ore and coal languish, only one force stands between Australia and a serious recession — Chinese investment in our residential property market.” (Gottliebsen 2014)

Globally entrapped in the “modern religion of development” (Rist 1999), cities manifest a wide spectrum of housing issues reflecting the economic development stages and the socio-cultural specificities of each city. Broadly, driven by economic expansion, cities worldwide will experience population growth in the next decades with the prediction that this will manifest in slums and squatter settlements (UN 1987) in emerging economies and acute housing unaffordability worldwide. Yet, while discussions and debates on the issue are rife, actual plans, actions and investments to pre-empt and address the identified and predicted problems are relatively scarce – reflecting the hegemony of the neoliberal-driven global inequality trends and the historic lack of real redistribution encapsulated in Piketty’s book “Capital in the Twenty-First Century” (2014). Expanding on a previous Southeast Asian (that includes Australia) cross-cultural housing study (Sintusingha 2008), this paper synthesizes an overview of housing and social housing practices in the region. Continuing the multiple country approach, the paper interrogates housing as an interconnected, interrelated and relative phenomenon, appropriate to the era of fluid and often instantaneous cross-border exchanges of investments, products, images and ideas.

In this reading, ironically social housing ultimately depends on the success of the neoliberal model of economic growth and expansion with social housing mainly subsidized with revenue from the expansion of GDP – whether directly through taxation and/or indirectly through development controls. Moreover, it is often delivered through one of many manifestations and varying degrees of public-private partnerships, the “Trojan horse” of Neoliberal development according to Miraftab (2004). Economic expansion also manifests in the increased housing demand from rural to city migration in industrializing, emerging economies and the national/international city to city migrations of post-industrial economies. Moreover, during economic downturns (‘glitches’ in neoliberalism) when funding and resources dry outup, social housing efforts cannot be sustained and the inhabitants are often further compounded compromised by diminished economic prospects (as encapsulated in Perlman’s (2011) longitudinal fieldworks in Rio de Janeiro). This highlights the challenge for the inhabitants of social housing to develop resilience to economic recessions that disproportionally affect lower socio-economic groups and their housing prospects, an issue that often has a lower priority than secure tenure in the implementation of social housing.

The key frameworks to articulate this global interrelatedness and relativeness are the notion of modernization/modernity and socio-economic class aspirations. Here ‘modernization’ is simply defined as “…directed change (of which reform is a part)” (Askew, 2002, p.33). ‘Modernity’, often a wide-ranging outcome of state modernization and increasingly the neoliberal forces of globalization, is “…any attempts by modern men and women to become subjects as well as objects of modernization” (Berman, 1988, p.5) which is evident in socio-economic class aspirations. In relation to housing, these aspirations manifest in: the global elite’s penchant for ‘world-class’ investment properties (and not ‘homes’); the local middleclass access to affordable housing in ‘good’ locations; and the lower socio-economic groups’ struggle for secure tenure and economic opportunities. Concerning the middle and lower socio-economic groups, cases are discussed that utilized social capital and could point to avenues to untangle the hegemonic inequality that is explicit in global housing practices.

The ‘World-class’ narrative at the cutting-edge of modernization: Housing as asset/equity: From London and Sydney to Iskandar, Malaysia

“In both cities [London and Sydney] property rights are protected. Both cities are in transparent democracies and within an overnight flight away from less democratic countries with less transparent governments. And both the UK and Australia have their borders open to new immigrants, especially if they are rich.” (Janda 2014, quoting a Credit Suisse report – italicized by author.)

In the worst excesses of neoliberalism, which pit cities in fierce economic and cultural competition, housing is produced to attract investment from the global wealthy citizens. Here, cities are reduced to “brands” (Anholt 2005), and housing is reduced to a for-profit commodity with success gauged by the rate of returns. A less excessive manifestation of this practice is the city as a ‘lifestyle choice’ where housing is produced for the wealthy and/or skilled outsiders. Arguably all modernizing cities fall into this category, from the established global financial centres that attract the ‘best and brightest’ to the many ambitious pretenders across the globe that provide well-publicized (marketed) examples of the practice (Figure 01). The Australian housing market manifests both of these excesses and, for example, in 2014 almost half of all residential lending went to investors with a high of 60% in Sydney (Dow 2014), a highly-ranked ‘world city’.

In middle-income Malaysia, Johor Bahru (Iskandar Malaysia) is one of the most ambitious examples in Southeast Asia of a small centre wanting to emulate this ‘success’, taking advantage of its proximity to the important global financial hub of Singapore (Nasongkhla and Sintusingha 2013), itself a major developmental benchmark for other Southeast Asian cities. From a population of 1.4 million in 2005, the Iskandar Malaysia region aims to house 3 million by 2025, by which time the country is expected to achieve a high-income economic status according to the government’s 1Malaysia plan. Many of the residents are to be skilled and affluent migrants from around the region. Those targeted include Singaporeans who desire house and land packages (which are unaffordable in high-density, land-scarce Singapore) with convenient access back to the city-state, and those from fellow Muslim societies seeking a more secular, economic-aspirant place to re-settle. This is consistent with the above quotation about London and Sydney, where being a stable ‘liberal democracy’ is arguably an integral part of the city’s branding. The urban area is to expand from the original centre of Johor Bahru with an area of 185km2 to be 2,217km2 or “3 times the size of Singapore” (Iskandar Malaysia), which in the process displaces pre-existing (perceived as antiquated) forms of settlements – such as the kampongs – as well as high quality agricultural and ecologically sensitive lands. These are to be replaced with a comprehensively planned city-region that accommodates the needs and aspirations of the future inhabitants, from new hi-tech industrial parks, foreign campuses of prestigious UK and Australian universities to international theme parks – essentially a practice of collecting recognized, international brands.

In such scenarios, the role of design and planning disciplines are in full service of the elites of neoliberalism, but mainly limited to reproducing ‘iconic design’ imageries to brand, market and sell the development. Here, in practice, housing is a highly exclusive product and must not be compromised by socio-economic mix and, hence, the resistance developers and investors have for the inclusion of affordable housing in their developments and/or the practice of spatial exclusion through “poor doors” (Speed 2014). Affordable or social housing is perceived to be detrimental to the financial growth potential of assets.

Figure 01 Artist's impression of the new business-residential development in Danga Bay part of Iskandar Malaysia 'Flagship B'.  It overwhelms and displaces pre-existing 'Kampong' Skudai Kiri and other indigenous fishing 'kampongs' (Figure 05).  Source: Modified from Danga Bay Holding by author.

Figure 01 Artist’s impression of the new business-residential development in Danga Bay part of Iskandar Malaysia ‘Flagship B’. It overwhelms and displaces pre-existing Kampong Skudai Kiri and other indigenous fishing kampongs (Figure 05). Source: Modified from Danga Bay Holding by author.

 

The local ‘housing affordability narrative’: The tyranny of ‘location, location, location’

“Many contemporary housing problems in Johor Bahru arose from the state sponsored rural–urban migration of Bumiputera and, lately, foreign expatriates that resulted in housing unaffordability for the middle- and low-income residents (Lee, 2005; Ahmad Ariffian and Mohd Razali, 2008).” (Nasongkhla and Sintusingha, p.1843)

Development practices that are biased towards investors and high-income residents not only displace the economically disadvantaged but also conversely affect the local middleclass’ 1 access to housing and specifically, housing with good access to urban assets and employment. In many instances, the local middleclass find themselves left out – either priced out and/or having limited access to credit. In general, regardless of countries and societies, affordable and social housing are often located in less desirable areas, such as in the sprawling exurbs as is the case in Australian cities. In a middle-income economy Thailand, an ardent neoliberal economic participant with a wider market (social class) spectrum, there are smaller developers who specifically cater to the middle to lower-income groups through units for purchase and rental. In developed, high-income economies, the planning tool of quotas for affordable housing are ‘required’ in new developments (e.g. 15% touted in City of Melbourne’s draft Housing Strategy (2014, p.7), but are often severely compromised in implementation in the unequal negotiations between the council planners and the large, often multinational developers (Wainwright 2014).

In Thailand, without such quotas and relatively weaker planning controls, some developers strategically increase the number of units and decrease unit size to compensate for the land price of a good location (serviced by good transportation) – but without any form of means-testing, many units are speculatively bought by higher income groups (Sintusingha, Dhalabutra and Natakun 2010). In Australia, as buyers of new units and developments do not have to be Australian residents, this opens up the market to foreign investors especially from China, which further exacerbates the affordability problem rather than resolving it 2, as one of the popular preferences for foreign buyers are units near the centres of major cities (Leggatt 2014). These issues demonstrate the fierce competition in the middleclass housing sector regardless of country and developmental stage.

Figure 02 Bangkok's skyline in the intter-ring road of Ratchadapisek which has become one of Bangkok's business centres.  In the middle foreground is an LPN development project that is priced to be affordable to the middleclass without trading off good location.  Source: Author's image 23/06/10

Figure 02 Bangkok’s skyline in the iner-ring road of Ratchadapisek which has become one of Bangkok’s business centres. In the middle foreground is an LPN development project that is priced to be affordable to the middleclass without trading off good location. Source: Author’s image 23/06/10

 

Critically engaging with these issues, designers can advocate for and make meaningful contributions to housing in this sector, albeit in a comparatively very small scale of development, such as in the case of Ten Bangkok project by Community Architects for Shelter and Environment (Case). The key innovation is in the adoption and application of community-based organization methods and practices that have been applied to ‘slum-upgrading’ projects (which Case has helped pioneer in Thailand) to experiment on the middle-classes. Case classified the middleclass as the “informal urban poor” arguing that “While the overpriced housings are out of reach, the people of medium income are also ineligible for the governmental housing aids. They are forced to enter the dead-end route of Bangkok housing, with neither opportunity nor alternative” (Case Studio 2007).

For TEN Bangkok, Case outlined their strategy and process as: “The working members/designers/inhabitants … began defining their ideal site and location. First and foremost, the site has to be affordable. Even though each of the TEN inhabitants realizes their economic limitation, the notion of convenient location and reasonable access to all urban facilities is not to be relinquished… The site has to be situated in a location that is equally convenient for everyone. Future expansion of Bangkok’s transportation system is thus taken into account. This means that currently the site does not have to be situated in the most central of location of the city.” (Case Studio 2007)

The major differentiating point from the predominant market driven practices, is that community formation is the critical, prerequisite step before any housing is built. In the specific case of TEN Bangkok, this is achieved through the fact that the 10 households have established relationships as friends and associates with a good degree of trust. This is purposefully reinforced through the housing process in the search for the appropriate piece of land and the intense, collaborative design process. With more participants, they were able to pool financial resources to purchase a good size plot of land in an area with future potential (Minburi, a commercial node in Bangkok’s northeast with convenient access to the planned Pink mass-transit line that has been recently approved by the Thai government). However, since the completion of the project in 2007 and despite the wide dissemination of the project’s approach in local and international design media, this practice has not gained traction amongst the wider (individualist and time-poor?) middleclass.

“As they work together to frame the design, the community is formed and the cooperative dwelling has thus begun. Architecture is no longer the familiar cult of objects, which is the product of the architects’ determination and control. Rather, architecture is the fruit of cooperative design where the architects are also the clients; the clients are also the architects.” (Case Studio 2007)

Figure 03 Ten Bangkok project model and during construction.  The project was  aresult of the pooling of social, financial and creative captial amongst the ten households.  Source: Pongpol Yutharat http://www.gotarch.com/projects/tenhouse_bangkok.html

Figure 03 Ten Bangkok project model and during construction. The project was aresult of the pooling of social, financial and creative capital amongst the ten households. Source: Pongpol Yutharat (http://www.gotarch.com/projects/tenhouse_bangkok.html)

 

The ‘housing the poor’ narrative: Modernizing subjects through housing and building social capital

“…space is viewed as a product of dominant social class conception, consistent with Antonio Gramsci’s term ‘cultural hegemony’ (Strinati, 1995), and represents the desire of the upper class to control, through economic manipulation, the state, ideology (Castells, 1998) and image.” (Nasongkhla and Sintusingha, p.1837).

In Southeast Asia, addressing housing for lower income households provides a picture of mixed practices. In the worst case the well-documented practices of eviction in the name of ‘development’ still predominate, such as in the case of Danga Bay and Nusajaya, part of Johor’s Iskandar Malaysia project (Nasongkhla and Sintusingha 2013). While this is partially mitigated by government top-down housing provisions, the housing units are often located in far-flung suburbs and, moreover, are priced beyond the means of the inhabitants. This was also the case of the ambitious Thai National Housing Authority’s top-down delivered 3 Baan Eua-Arthorn project (2003-present) where the household income threshold to qualify was later doubled (Sintusingha, Dhalabutra and Natakun, 2010, p.73). At the opposite end of the spectrum is the application of community-based bottom-up practices discussed above, the most enlightened (i.e. truly socially-oriented) being in the form of in-situ ‘slum-upgrading’ that retains access to inner-city economic opportunities (Sintusingha, Dhalabutra and Natakun 2010).

In Thailand, the government sponsored Baan Mankong project (BMK; 2003-present) builds on pre-existing social capital, particularly of established trust amongst residents, in long-settled slum and squatter communities. The objective of the practice is to embed and incubate a more participative, democratic practice in the housing process through the community’s own formation of a savings group. Government subsidies for the housing process are only made available upon the establishment and functioning of the savings group. This is a process of conscious social capital building and, critically, involves the identification of indigenous leaders who can transparently facilitate the process between the key stakeholders of the residents and the state agencies. If in-situ upgrading is not possible (e.g. due to landlord objection), a search for alternative land plots occurs. In the latter stages, the process involves collaborative design and construction that involves all residents, facilitated and trained by designers and building practitioners from the local council and nearby university institutions. Post-construction, the savings-group and the residents’ cooperative are meant to facilitate and sustain the community engagement and collaboration.

Also combining both top-down and bottom-up practices, the Philippines offers a unique NGO-led model to social housing through the Gawad Kalinga Community Development Foundation (GK; 2003 to present) which, through mainly private donations (funds, land, in-kind etc.) and partnership with local government, supports the construction of “villages” for the poor. Similar to Iskandar Malaysia, GK also exploited a modernizing ‘nation-building’ narrative (with 2024 identified as the year when “First World Philippines” (Gawad Kalinga 2015) status will be achieved) to rally the widest spectrum of society. These include large and small businesses, local governments and the huge expatriate Philippines communities, whose personal remittances form a substantial proportion of national GDP (World Bank 2015). The community-building process is through the implicitly faith-based “values formation” led by in-situ, permanently based volunteer “caretakers” (who manage the GK villages in coordination with the residents’ group Kapitbahayan), while acknowledging the significant challenge in forming new communities of low-income strangers. This implicit social and behavioural conformity is consistent with Gramsci’s notion of cultural hegemony with GK stating that its approach “… addresses poverty through environmental and social engineering” (Gawad Kalinga 2015). The BMK process can be accused of some degree of top-down social engineering through the practice of inculcating a savings habit amongst its residents in the process of being upgraded and integrated into becoming urban middleclass subjects 4.

Here, design and planning disciplines have a more meaningful (yet, less acknowledged in mainstream design practices), less explicit role in the highly participative, community-based process. Most critically, both the Thai BMK and Philippines GK cases demonstrated the capacity to scale up practice and have been the model that is applied countrywide in both countries. In fact GK has now become the default mode of social housing delivery in the Philippines with the ambitious mission to “…end poverty for 5 million families by the year 2024” (Gawad Kalinga 2015). In 2011 the Community Organizations Development Institute (CODI), the facilitating agency for BMK projects, published their progress as having operated in 1,546 communities covering a total of 90,813 households (CODI 2011 – significantly revised down from 300,000 units by 2008 set by the government at the time). GK’s website revealed its operations as “2,000 communities and affecting 60,000 families” (Gawad Kalinga 2015).

Figure 04 Bangbua Community, one of the first Baan Mankong projects located next to Paholyothin Rd. (one of themain roads of northern Bangkok) successfully negotiated a 30 year renewable lease with the Treasury Department, the landlord.  Before upgrading, the community resembled the Saphanmai Community in the opposite side of the canal (right of image).  While detractors have argued that the prime location could have been used to accommodate and benefit more poeple through building high-rises, it would hav eruined the pre-existing economic productivity of the community that is integral with the low-rise housing form.  Source: Author's image 6/05/10.

Figure 04 Bangbua Community, one of the first Baan Mankong projects located next to Paholyothin Rd. (one of the main roads of northern Bangkok) successfully negotiated a 30 year renewable lease with the Treasury Department, the landlord. Before upgrading, the community resembled the Saphanmai Community in the opposite side of the canal (right of image). While detractors have argued that the prime location could have been used to accommodate and benefit more people through building high-rises, it would have ruined the pre-existing economic productivity of the community that is integral with the low-rise housing form. Source: Author’s image 6/05/10.

 

Figure 05 An image pairing from the Gawad Kalinga website that suggests before and after GK involvement scenarious that lcearly mainifests the cultural hegemony view.  Perhaps this is a necessary concession (to reinforce predjudices against the poor) to solicit support from the middle an dupper clasess.  Source: http://www.gk1world.com/gk-2024-roadmap (accessed 30/01/2015).

Figure 05 An image pairing from the Gawad Kalinga website that suggests before and after GK involvement scenarios that cearly manifests the cultural hegemony view. Perhaps this is a necessary concession (to reinforce prejudices against the poor) to solicit support from the middle and upper classes. Source: http://www.gk1world.com/gk-2024-roadmap (accessed 30/01/2015).

 

Conclusion: Addressing hegemonic inequality (1% owns 50%); the ‘public’ in PPPs and the ‘social’ in ‘social housing’

“The study found about 65,000 of 1.5 million properties in prime areas of greater Melbourne could be left empty at time when more than 22,000 Victorians are believed to be homeless. These homes either used no water at all, or less than 50 litres a day over 12 months. A leaky tap is estimated to use up to 55 litres of water a day, according to the report.” (Dow 2014 referring to the seventh annual Speculative Vacancies study)

“What would happen if each of these powerless individual begin [sic] to build up its strength through cooperation and collaboration with others. As a collective force, will they stand a chance against the brutal economic stream in the housing world? As an individual each of them remains powerless, but as a community, both their economic and creative power may multiply. Thus, a number of individuals began to form both the ideas and the potential community.” (Case Studio 2007)

This paper articulates unequal, fundamentally conflicting narratives and processes that pit the city, efficiently mass-produced by global capital flows, against the pockets of ‘resistance’ within that are concurrently built by and build up the community’s social capital. On the one hand, the world-class city narrative focuses on the accumulation and concentration of financial wealth, consistent with Piketty’s notion of the broader historic trends of personal wealth expanding faster than GDP growth, 5 versus another narrative that diffuses and grounds wealth socially in the community.

Arguably, this other narrative might be consistent with the 1996 UN Habitat II Conference in Istanbul adoption of the “market-enabled” policy, which explicitly recognized the significant role and influence of the private agents (developers and finance institutes) in global housing and their capacity (over public agents) to quantitatively address housing shortage. While the policy can be viewed as a yielding of ground to market forces, it acknowledges global and local realities. However, the reduction of the public’s role/agency to negotiating social benefits (‘profit-sharing’?) has not proven effective given the tendency of contemporary democracy to conflate public and private interests. Here it is argued that the focus must be on the ‘public’ in PPPs and the ‘social’ aspect of social housing. In the case of BMK, the ‘public’ is less the government agents as representatives and advocates for the vague notion of public – rather the active, participating public that directly benefits from the housing program itself. A key ingredient from the ‘best practice’ discussed in this paper is social capital, its formation, expansion and expenditure in order to enable more effective negotiation with powerful state and market forces. This leads to questions in terms of the relevance and applicability of the practice to other societies.

Could the private bottom-up initiative led by like-minded individuals of TEN Bangkok be adopted by other urban middleclass groups affected by housing unaffordability? Can the state facilitated bottom-up Baan Mankong process (a partial wealth redistribution via taxes), where the public agents support a community-led housing process – that equips the inhabitants with the confidence, means, network and networking capacity 6 to negotiate for themselves – be adaptable to other societies? Could GK’s mass-production based, not-for-profit model, 7 yet on the whole top-down, NGO-led approach to housing and community formation – that essentially entails a direct redistributive process (donation and in-kind) through a collaborative approach engaging the widest spectrum of society from businesses, to government to individuals in the Philippines – be applicable in other societies? The challenge remains how to build any of these models to a critical mass strong enough to negotiate with powerful economic forces on a more level playing field. This is arguably achieved in varying degrees in the case of BMK and GK, which are examples that pose and suggest possible alternative ways forward – short of a radical top-down shift in global wealth redistribution as advocated by Piketty:

“… absent aggressive policy intervention, the Western world appears to be headed towards a plutocratic dystopia characterized by wealth inequality approaching that of ancien régime France.” (Weltzer 2014)

Figure 06 'Kampong' Skudai Kiri parts of which has been in the process of being displaced by Danga Bay development, Iskandar Malaysia.  Source: Author's image 12/03/2010

Figure 06 Kampong Skudai Kiri parts of which has been in the process of being displaced by Danga Bay development, Iskandar Malaysia. Source: Author’s image 12/03/2010

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About the Author

Dr Sidh Sintusingha is Coordinator, Landscape Architecture Major, Bachelor of Environments at the University of Melbourne. His research addresses socio-cultural, environmental and scalar problems relating to urban sprawl and the speculation of retrofits towards urban sustainability in Southeast Asian cities. He has widely presented and published in these areas both locally and internationally in research books and refereed journals.

  1.  Acknowledging that the ‘middleclass’ is not a homogeneous group and is relative across cities and economies.
  2. Even if foreign investors also significantly increase the supply of units available in the market (Janda 2015). Thailand has similar rules on foreign ownership that results in incidents of unaffordability particularly in the expatriate areas of Bangkok and the well-known tourist centers of Pattaya, Phuket and Koh Samui etc.
  3. Where the national housing authority operates as a developer in the real estate market.
  4. This is more apparent in BMK projects where residents buy the land and hence become owners of appreciating assets.
  5.  Consistent with Oxfam’s projections (2015) that, globally, the richest 1% will own more than the rest by 2016.
  6. Which manifests a culturally specific practice of ‘democracy’ where protests are important tactical means to an end. This is one topic investigated in Kitapatr Dhabhalabutr’s PhD thesis at the University of Melbourne.
  7.  What Tony Meloto, GK’s founder, termed “GK philosophy of enlightened capitalism”
Designed by Chris Orchard