The recent controversy over housing prices began with a public opinion poll by the Research, Development and Evaluation Commission showing surging housing prices topping the list of public complaints. The Cabinet’s attempts to address the issue were criticized as harming property prices, however, with critics branding the moves an unwise political move that would undermine the assets of most home owners and hurt the local economy.
Premier Wu Den-yih (吳敦義), who has promised to listen to public opinion, was at a loss as to how to deal with the complaints, and government policy kept swinging back and forth. Wu’s wavering is a reflection of how a dearth of information on the real-estate sector has made decision-making difficult. The “home ownership rate” is one of the most distorted and misunderstood data points, and this has directly affected the administration’s judgment.
The official home ownership rate refers to homes registered as “self-owned.” That rate is currently about 88 percent. However, given that some individuals own more than one property, the home ownership rate does not directly translate into the number of households owning a home. Equating the two is either an honest mistake or a deliberate distortion. To investigate the source of the complaints, we need to know the real home ownership rate based on the number of households that own a house. Unfortunately, no such data exist, so one can only make estimates.
The total number of households in the country — registered households — is about the same as the total housing stock, which is about 7.8 million. What does Taiwan’s home ownership distribution look like? Following are my estimates based on a national census conducted 10 years ago, an Academia Sinica survey involving home ownership from many years ago and the semi-annual telephone surveys on housing demand conducted by the Institute for Physical Planning and Information that I work for.
For every 100 registered households, about 30 do not own a home. Among these 30, 12 households either rent or stay in dormitories, and 18 either share a home with other households or individuals such as relatives and friends, mainly parents or children. The other 70 households own a total of 88 houses, and this is the source of the government’s home ownership rate. Among those 70, 60 households own one home each, seven households own two homes each, and three households own three or even more homes each.
Assuming these estimates are correct, how do high housing prices affect the public? For the 30 households that do not own a house, one-third are likely part of the socially and economically disadvantaged group who have long lost hope of owning their own home and are indifferent to politics. The remaining two-thirds want to, but have given up hope of ever owning a home — these make up the most angry group. At the other end of the spectrum are the 10 households who own two or more homes: Rising home prices mean a continued expansion of their assets.
The situation for the rest — those in between these two extremes — is more complicated. Although their wealth increases in value on paper, it is difficult for them to make use of this wealth since they still live there. Rising home prices also make it difficult for them to raise their standard of living by moving to a bigger or better place. Generally speaking then, they are also victims. Surging housing prices are also squeezing out small investors, leaving the wealth concentrated in the hands of the rich.
In short, there is reason for the public complaints. This evaluation looks at the overall situation in Taiwan, so there is likely to be even more and stronger complaints in urban Taipei.
How can we make the government aware of this issue? Those who have the ability to influence government policy are mainly business lobbying groups and the minority who own two or more houses. Still, democratic politics is based on individual votes, and this is still a good way to express public discontent. The housing issue looks set to be a contentious issue in the five special municipality elections in November and the 2012 presidential election. Instead of a chaotic political battle between the ruling and opposition camps, we should rationally discuss the situation and public opinion to formulate a clearer and more decisive housing policy.
Hua Chang-i is a research fellow at the Institute of Physical Planning and Information.
TRANSLATED BY EDDY CHANG
In Chinese author Lu Xun’s (魯迅) novella The True Story of Ah Q (阿Q正傳) — one of the earliest works of modern Chinese fiction, first serialized in 1921 — the story’s hapless protagonist, Ah Q (阿Q), is a poor itinerant worker from China’s peasant class, living during the part-feudal, part-colonial dying embers of the Qing Dynasty. Ah Q is a feeble and psychologically flawed individual who bullies the meek and cowers before the powerful. Despised and regularly mocked by villagers, after every episode of public ridicule and failure, Ah Q consoles himself that he has won a “spiritual victory.” Utterly
Taiwan Semiconductor Manufacturing Co (TSMC) chairman Mark Liu (劉德音) said in an interview with CNN on Sunday that a Chinese invasion of Taiwan would render the company’s plants inoperable, and that such a war would produce “no winners.” Not only would Taiwan’s economy be destroyed in a cross-strait conflict, but the impact “would go well beyond semiconductors, and would bring about the destruction of the world’s rules-based order and totally change the geopolitical landscape,” Liu said in the interview, according to the Central News Agency. Bloomberg columnist Hal Brands wrote on June 24: “A major war over Taiwan could create global economic
Washington’s official position on US House of Representatives Speaker Nancy Pelosi’s visit to Taiwan is that nothing has changed: The US government says it is maintaining its “one China” policy, that Pelosi is free to arrange international trips with congressional delegations independent of the government and that she is not the first US official to visit Taiwan even this year. Yet there is no denying that the fact and the optics of the second-in-line to the US presidency speaking with lawmakers at the Legislative Yuan about inter-parliamentary discussions and learning from each other as equals are hugely significant, as were
Amid a fervor in the global media, US House of Representatives Speaker Nancy Pelosi and her congressional delegation made a high-profile visit to Taipei. President Tsai Ing-wen (蔡英文) awarded a state honor to her at the Presidential Office. Evidently, the occasion took on the aspect of an inter-state relationship between the US and the Republic of China (ROC) on Taiwan, despite no mutual state recognition between the two. Beijing furiously condemned Pelosi’s visit in advance, with military drills in the waters surrounding coastal China to check the move. Pelosi is a well-known China hawk, and second in the line of succession to