The other issue is whether the state ought to get involved at all, especially where government meddling in the economy often results in distortion, corruption and waste. Still, housing is undeniably a basic need, and it seems a cop-out, if not political suicide, for any government to let the market alone sort out who gets to own the roof over his head. Singapore's enviable program, funded by hefty pension contributions, has enabled nine out of every 10 households to own their homes. Other Asian nations harness state-managed provident funds for cheap housing loans. But such programs could use more money, and relying on pension contributions alone is insufficient.
Tax policy can also generate funds.
In the U.S., mortgage interest is tax-deductible, a big help to homebuyers. Real-estate taxes are another good source of funds. Such collections now go to a government kitty for all ministries to fight over. A better system is to allot a percentage of property taxes to housing. Besides providing soft loans and undertaking joint projects, the state can bring social services and infrastructure to raw land, opening it to private development.