With the presidential election approaching, and World Habitat Day and the anniversary of the Housing movement — [a coalition of civic groups that staged sleep-out protests in Taipei last year] — around the corner, Democratic Progressive Party (DPP) presidential candidate Tsai Ing-wen (蔡英文) and Chinese Nationalist Party (KMT) candidate Hung Hsiu-chu (洪秀柱) were eager to reveal their housing manifestos.
Tsai is proposing a social housing plan that is to provide 200,000 homes in eight years, while Hung said she would make public housing ownership affordable for those who have worked for at least five years.
The Ministry of the Interior said it plans to build 20,000 homes for young people within the next five to 10 years, and also offer surface rights.
Are these policies enough to combat housing injustice, which society is so concerned about? It is imperative to determine the root cause of housing injustice. More than 80 percent of the nation’s housing is privately owned. However, real-estate flipping has led to unreasonable prices and numerous vacant homes, distorting demand in the market. A healthy and functional housing market is the key to fixing the problems.
Less than 20 percent of housing is tenancy-based. Not only is the quantity inadequate, but the quality is also undesirable, not to mention the amount of unregulated transactions, leaving the rights and welfare of landlords and tenants in jeopardy. The fundamental solution to this problem is, again, a healthy and functional housing market.
Furthermore, less than 1 percent of housing is government-sponsored, which is small in number and ineffective in bringing real benefits to disadvantaged people. This is what makes the construction and management of social housing so important.
The market is relatively unregulated, compared with those in Singapore, Hong Kong and China. Introducing structural change to Taiwan’s housing market would be difficult and of debatable use. Therefore, it would be better to accurately diagnose the ailment troubling the patient. These issues should be addressed, instead of avoided, in the manifestos of those running for office. Without doing so, housing justice cannot be achieved and government policies would remain senseless to the public.
The manifestos of both the DPP and the KMT place emphasis on the “supply” side, in which the government builds social housing for non-homeowners to rent or purchase, including properties and surface rights. However, most land is privately owned, which makes it difficult to obtain. Hence social housing development would be limited and it would be difficult to make the manifestos a reality. They would instead become only slogans.
An in-depth examination of the situation would reveal that the problem does not lie in the lack of supply, but the oversupply of investment demand, which crowds out housing demand, leading to undue increases in home prices, an excess of vacant houses and insufficient housing for rent.
In other words, the core of the housing problem is on the demand side, but the government is fixated on the supply side, where there is insufficient public land for the government to make use of. The government is apparently mistaken about what the problem is and how to solve it.
Why is it that candidates are inclined to address problems on the supply side?
One reason is that they have failed to come to grips with the problem. Another reason is that the supply side is unlike the demand side — making a difference on the supply side does not affect investment demand and the vested interests of the housing industry and its investors. Additionally, making changes on the supply side brings about investment opportunities.
Hence, in light of the political and business structure, and the feasibility of implementation, fixing the supply side is usually what is on the agenda, which is why housing manifestos always evade the real problems, fail to address them and, more often than not, exacerbate the problems.
Housing manifestos should include the establishment of a healthy housing market for home ownership and tenancy, and should comprise taxation and monetary systems that can curb investment demand of those who buy real estate for sale or rent. The manifestos should also accommodate the public’s basic residential demands. Candidates should come up with policies that provide housing subsidies in a variety of ways that are fair and effective in addressing the housing problems of disadvantaged groups. For instance, the government could provide subsidies on the demand side, such as rental subsidies, or provide subsidies on the supply side, such as social housing.
The presidential candidates should get a full understanding of the housing problem, recognize the injustice of the current situation, re-examine the root causes, and reallocate resources so that their housing manifestos can be delivered and fairness achieved.
Chang Chin-oh is a professor of land economics at National Chengchi University.
Translated by Ethan Zhan
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