Taipei Mayor Ko Wen-je’s (柯文哲) recent remarks on high rental and housing prices have stirred up the debate on social housing and housing justice.
Social housing projects are extremely rare in Taiwan. Last year, there were about 11,000 households registered in social housing units, accounting for just 0.12 percent of the total of 8.78 million households in the nation.
In comparison, the rate of social housing households in many developed countries ranges from 5 to 10 percent — 5 percent in the US and South Korea, 6 percent in Japan, and even 30 percent in Hong Kong and 32 percent in the Netherlands.
Taiwan should build more social housing, as it is crucial to housing justice.
However, building more social housing is easier said than done, and some major difficulties include land expropriation, construction costs and a presumed negative effect on real-estate prices in the neighboring areas.
No matter who is in power, it would be difficult to increase the share of social housing to 10 percent, let alone 32 percent as in the Netherlands.
The Population and Housing Census conducted by the Directorate-General of Budget, Accounting and Statistics shows that the percentage of vacant housing units has since 1980 remained in the double digits.
As former Taipei deputy mayor Chang Chin-oh (張金鶚), a professor at National Chengchi University’s Department of Land Economics, pointed out last year, the vacancy rate in other advanced countries is usually about 3 to 5 percent, while the rate in Taiwan is nearly 20 percent.
The large number of empty houses is obviously a big waste of land resources.
According to 2018 data on housing units with low electricity consumption — which are believed to be vacant — and data on new housing units for sale released by the Construction and Planning Agency this year, there were a total of 916,383 empty apartments and houses in the nation, accounting for 10.56 percent of the housing on which taxes are levied.
This rate has also remained in the double digits since 2008.
To solve the housing problem once and for all, apart from building more social housing, it is also necessary to tackle the high vacancy rate.
With nearly 1 million vacant houses and apartments, Taiwan has the highest housing vacancy rate in the world.
In addition to public sentiment and historical factors, the phenomenon is also caused by property holding costs which are much lower than in other developed countries.
As a result, Taiwan’s wealthy invest mainly in real estate and thus use housing as objects for speculation.
On the contrary, in countries such as Germany, Japan, the UK and the US, housing speculation is less widespread because house holding taxes are much higher.
To curb the rise of housing prices, the government is planning nine major proposals, including adjusting housing tax exemptions on residential housing to prevent owners from dividing their properties to avoid housing taxes.
However, if the government really wants to curb real-estate speculation, it should increase house holding costs through taxation.
This would not only reduce the large number of vacant homes, but also curb the rise in rental and housing prices and might prove more effective than controlling real-estate speculation through increasing transaction costs and registration fees.
Wei Shih-chang is an information technology engineer.
Translated by Eddy Chang
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