The Ministry of the Interior on Monday said that it would launch a program next month to convert certain hotels into social housing, with the ministry and the National Housing and Urban Regeneration Center giving tax breaks and subsidies to hotels willing to convert their properties. The move is an important step toward housing justice, but it would not be enough to overcome the housing crisis facing young people and lower-income earners in large cities.
In a report published by the Taipei Times (“Are housing prices a national security crisis?” Dec. 13, page 13), contributing reporter Michael Turton cited housing giant Pau Jar Group as saying that it would raise new housing prices by up to 40 percent “in response to the hot market, cost inflation and continued low interest rates.” Turton said that the move would turn away would-be immigrants who might otherwise help offset the country’s declining population over the next decade. He said the property market should instead be reined in with a “resolute set of tax and land policies.”
Taipei Mayor Ko Wen-je (柯文哲) recognized the problem in September 2019 when he said that failing to curb high housing prices could make Taiwan resemble Hong Kong, where “high rent and housing prices are ... causing class struggle, a widening wealth disparity and accumulating resentment among young people.” Ko’s “Housing Justice 2.0” policy aims to build more public housing, amend the tax rate to ease the burden on people who own only one home, raise the tax on owning vacant homes, provide rental subsidies and increase housing price transparency.
More social housing units have been built in Taipei since then, but nowhere near the 50,000 — 5 percent of all housing in the city — that Ko promised ahead of the 2014 local elections. During a news conference on June 6, Ko told reporters that his administration was “very naive to think we would be able to build 50,000 units in eight years,” and that it would aim to build 20,000 before Ko’s second term ends. That leaves the city with a shortage of social housing, meaning that people in need of housing must apply and wait before units become available.
Making matters worse, the law requires that only 30 percent of a city’s social housing units be reserved for disadvantaged households, according to a June 6 Formosa TV report published on its Web site.
“It’s so hard to get one. I think you might have a better chance at winning the lottery,” one Taipei resident cited in the report said of applying for a social housing unit in the city.
The report added that social housing is available only for rent and not purchase, and that rent is often unaffordable since the law allows units to be rented by non-disadvantaged people.
Clearly it will take a number of changes to real-estate practices and laws to bring this situation under control. High taxes on multiple homes to deter hoarding, a low-income requirement for access to social housing that also provides a path to ownership, and the implementation of restrictions on rates for housing classified as social housing are all necessary.
In a promising move, the Kaohsiung City Government on Nov. 25 said that it would impose a property hoarding tax in an effort to contain real-estate speculation. More cities should follow suit. Of course, another important step is to increase the number of social housing units, which the government seems to be addressing through its program to convert underperforming hotels.
The affordable-housing crisis in Taiwan has been on the government’s radar for nearly a decade, and as prices continue to soar, the situation worsens. With housing costs rising faster than wages, it is imperative that the government solve the problem soon.
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