Lifts are a public good

Heng-Cheong Leong of SingaporeSurf takes issue with the Lift Upgrading Programme. Under the programme, residents of buildings with limited lift service vote whether to upgrade to lifts that stop at every floor. If 75% of residents vote for upgrading, construction moves forward, with a portion of the upgrading costs to be split among the residents. So far 1,032 blocks out of 1,063 that have been polled have voted to upgrade.

Lift Upgrading: Where We Steal Money From Everybody To Build Something I Like
by Heng-Cheong Leong

There is one aspect of the Lift Upgrading (and the estate upgrading) plan that really bothers me, and that is you don't need 100% agreement in order to go ahead with the upgrading plans.

And even though these upgrading are subsidized (with people's money, of couse), the upgrading is still not cheap.

In order to counter pro-upgrading proposals like Fok Kah Hon writing in Straits Times, urging a change of policy by not counting votes by people who don't vote, I propose thus:

That the cost of upgrading, after deducing the subsidies, should be borne entirely by people who voted yes. Those who voted no should not need to pay, althought they will still be in terrible living quarters for quite a few months or even years.

We should not simply have the rich folks imposing additional burdens to the poorer folks, in the name of a better living environment. Just because one has some additional monies sitting around in the CPF accounts doing nothing shouldn't entitle anyone to force other people to pay money for "common good" that the poor can do without.

Sometimes, when you are poor, all these "essentials" are simply just luxuries.

I won’t address Heng-Cheong’s opinion that the rich folks are imposing costs onto the poor folks. Instead I will comment on what the outcome of the proposed scheme would be.

A lift is an example of what economists call a public good. A public good is a good that is nonrival and nonexclusive. Nonrival means that consumption by one person does not affect consumption by another. Nonexclusive means that the good is accessible to everyone. Textbook examples of public goods are television broadcasts and national defense.

The best way to finance a public good is for each person to contribute his or her personal valuation of the good. This scheme is difficult to implement because, by human nature, there is an incentive to lie and to shirk fiscal responsibility. Since a lift is nonrival and nonexclusive, everyone can enjoy the lift once it is upgraded, even those that don’t contribute to the cost of upgrading. Under Heng-Cheong's scheme, it will likely be the case that people who will benefit most from an upgrade, such as the elderly and families with children, will vote yes while those that will benefit least, such as young childless couples, will vote no. Those that vote no will hope to be free riders, benefiting from knowing that others with a greater need for an upgrade will vote yes.

Instead of spreading the cost of an upgrade among all residents as under the current scheme or alternatively onto the rich as desired, the cost would be borne only by those that need it the most even though all residents would be benefactors. It is also possible that under the proposed scheme no upgrade is undertaken even though residents are willing to pay for one.