On July 4, the Cabinet announced four urban-renewal plans. Having read about these plans in the press, I find them very worrisome. Clearly, this is another election campaign strategy of the Democratic Progressive Party (DPP). The plans are also aimed at attracting foreign investment without due regard for the local consequences, which further highlights the carelessness of the government.
The most obvious mistake the government has made is to designate Keelung Harbor as the site of one of the planned Chinese tourist centers. The primary task of a harbor is the transportation of goods and the government's attempt to revive a port by setting up a tourist center there is likely to become an international joke.
Of the other three locations -- one in Kaohsiung, one in Taipei's Nangang District and one in Taipei's Huaguang Community -- two will force the Taiwan Railway Administration (TRA) to give up some of its land. No planning is in place to provide alternative land for the TRA's operations, which may in the long run result in difficulties in the management of urban railroads.
In addition, these three areas have a massive shortage of parks and other green spaces and suffer from traffic congestion. Furthermore, Kaohsiung has problems with inferior tap-water quality and inadequate sewage systems. If the government doesn't first make a major investment in basic infrastructure, these areas will not be able to attract investment from the international community.
The old Kaohsiung Harbor already has a shopping mall, a trade park and a logistics center built by Uni-President Group, Taiwan Sugar, Chiahsin Cement, China Petroleum and Chemical, Formosa Plastics Group and others. This use of land for both residential and business use means that the area was sloppily developed by the government. A 15-hectare iron sulfate heptahydrate readjustment plant in the area is also suspected of contributing to water pollution.
It would be better to identify which areas are best suited to urban renewal plans by gauging the age of buildings and their state of disrepair based on land use data gathered every five or 10 years.
Experts in the fields of construction, culture, finance and innovation should be selected to form task forces to implement renewal plans. While some areas can be developed by corporations alone, others require the government's assistance in widening road and parks.
Financially speaking, urban renewal should encourage bottom-up participation by residents, businesses and the government. Tax incentives should be offered to land owners. Those who participate from the inception of the project should be exempt from land tax, land value increment tax and house tax. Those who join the project within five years of its completion should have their taxes cut in half. The loss of tax revenue could be covered by selling publicly owned land for which planning has been completed.
Before each renewal project is announced, the central and local governments should reach an agreement on how the construction costs should be divided. This should be based on estimates of probable land value after completion of the project. This is the only way to feasibly implement an urban-renewal plan. Such a complicated and far-reaching national policy should of course be carefully planned.
A truly solid election strategy for the DPP would be to submit a well-thought-out policy for urban renewal projects prior to next year's presidential elections.
Chen Lee-in is a research fellow at the Chung-Hua Institution for Economic Research.
TRANSLATED BY LIN YA-TI
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