To ease public discontent over high housing prices, the Cabinet early this year proposed a plan to improve the lives of the general public by providing what they referred to as “affordable housing” for 4,000 households around the Gueishan station near the airport MRT line in Taoyuan County.
According to Construction and Planning Agency estimates, the housing was originally priced at between NT$170,000 (US$5,320) and NT$180,000 per ping (3.3m²). Criticism of this price range led the agency to adjust the price less than NT$150,000 per ping and changed the name from affordable housing to “appropriate housing.”
It is difficult to say how appropriate the agency’s proposed housing will be, but I do know that most people who are unhappy with the high housing prices belong to the economically and socially disadvantaged.
The former come from low-income households who do not own and cannot afford to buy their own houses. The socially disadvantaged are those who are physically challenged or belong to a certain age group, gender, sexual orientation, family, culture or some other minority group that is basically unable to find affordable housing in friendly areas on the real estate market.
This is why they are big supporters of affordable and appropriate housing.
Although affordable housing is aimed at the economically disadvantaged and those with incomes in the low to middle range who cannot afford to buy houses, these groups still cannot afford to pay the prices proposed by the Ministry of the Interior. A typical 30-ping apartment with three bedrooms, a living room and a dining room costs about NT$4.5 million. With interior decoration, taxes and other expenses, the total cost would come to between NT$5 million and NT$6 million.
According to the Directorate-General of Budget, Accounting and Statistics, the average annual income for the lowest-earning 20 percent of households was NT$282,000 last year. The income of this group does not cover their expenses. For the second-lowest-earning 20 percent of households, average income was NT$545,000
Thus, the bottom one-fifth of wage earners will only be able to afford such “affordable” houses if they stop eating and drinking for 21 years. The fifth above them would need 11 years without food and drink to buy the homes on offer.
It is generally considered reasonable for housing to account for a quarter of a household’s total expenses. In that case, it would take the bottom 20 percent 84 years and the second-lowest 20 percent of households 44 years to buy these “affordable” houses. Can families on this level of income really afford to pay such high prices? At the same time, aren’t these people in the greatest need of a place to live? And shouldn’t any affordable housing policy be aimed at meeeting their needs?
Does Premier Wu Den-yih (吳敦義) consider the housing needs of the socially disadvantaged important? Do these needs even exist in the eyes of big business? If they don’t, then the so-called “appropriate” housing is evidently not appropriate at all.
This “affordable” housing plan is clearly based on real estate market thinking. It is simply a new take on the failed public housing policies of the past. Ultimately, selling national land like this only benefits the middle and upper classes, construction companies and developers. For those who urgently need reasonably priced housing, this is nothing but a political ruse.
Lin Wan-i is a professor in the Department of Social Work at National Taiwan University.
TRANSLATED BY EDDY CHANG
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