Media reports that Premier Jiang Yi-huah (江宜樺) has said — after bemoaning how his own children could not afford to buy property in Taipei — that the house-price-to-income ratio in the nation’s capital should come down from the present 15 to 10.
The good news, these reports say, is that this policy is to be implemented within Jiang’s term in office. Since these revelations, the issue has become a hot news topic.
The implications of high property prices go beyond the difficulties the younger generation face in buying a home. They also increase the speed by which wealth is concentrated, resulting in a reduction of consumption and a resultant slowing of economic growth.
The high price of housing also makes it difficult for later generations to establish themselves. This means that they will need to depend on inheriting property, which complicates family dynamics and also creates a new propertied class, thereby widening social divisions.
Finally, the high cost of housing makes it more difficult for people living in studio apartments to improve their living conditions by moving into larger accommodation, leaving them cramped.
Overall, high property prices are not about increasing people’s material assets, but are a serious social problem in Taiwan, as is quite evident from the significance attached to this issue in protest movements.
The Snails Without Shells Alliance is a social housing movement that has advocated its position for close to a quarter of a century.
However it was the Sunflower movement, mainly concerned with the government’s handling of the cross-strait service trade pact that made the authorities pay attention to the mood of young people. It was not because of an establishment epiphany regarding the implications of high housing prices.
The most efficient way to keep property prices down is — and always has been — raising housing and land taxes, but this axiom has been reiterated for more than 20 years without results.
Perhaps the best explanation for this failure is that many politicians — regardless of political affiliation — own land and several properties themselves and stand to benefit from low taxes and high property prices.
It is easy enough to show that this is not an exaggeration.
Even though Jiang has said that he is intending to encourage those holding on to unused property to put it on the market, he also needs to get all his Cabinet colleagues to play along. Then, armed with the property assets reports they have filed with the Control Yuan, they must make it clear that they will sell all the properties that exceed their own housing needs right away.
This would be a substantial, powerful political statement to make, and one that would get people listening.
If the opposition wants to win the next election, it will have to rise to the challenge, and announce that if it does return to power, all members given official appointments will not hoard property and keep only the real-estate they intend to inhabit.
This would be to the benefit of the nation.
Hua Chang-i retired as a professor at the Graduate Institute of Building and Planning at National Taiwan University.
Translated by Paul Cooper