Thu, Apr 07, 2022 page8

• EDITORIAL: More than housing subsidies needed

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  High housing prices and rents — especially in Taiwan’s major metropolitan areas — have for many years prevented young people from becoming established, and been a major impediment for those wanting to buy property or move to Taipei in search of better career opportunities.

  These problems have been exacerbated by inflation and long-term wage stagnation.

  Politicians have for many years tried to tackle the inequities in the housing market, with little success, and, as always, it is the poor and disadvantaged who get the short end of the stick.

  The difficulties faced by renters, young couples, and the economically and socially disadvantaged are not only a question of housing justice, they are a factor of the burgeoning wealth disparity, and directly affect the ability and willingness of couples to start a family, placing a drag on the nation’s birthrate.

  Ministry of the Interior data showed that Taiwan’s economic growth last year hit an 11-year high, and it is only right that the government redistributes some of that wealth to relieve the burden on groups that need it the most.

  The government on Thursday last week announced a new package of rent subsidies to help those struggling to make ends meet.

  First, it would increase the pool of renters eligible for subsidies by raising the minimum qualifying salary from 2.5 times the level of basic living expenses to three times, increasing the number of qualifying households from 120,000 to 500,000.

  Second, the scheme would further expand the pool by including unregistered properties, and third, increase funding for the scheme to more than five times the original annual budget of NT$5.7 billion (US$198.12 million) to NT$30 billion. There would also be more support for unmarried people aged 20 to 35 — 1.2 times the original rent subsidy — and for those married within the past two years — who would receive at least 1.3 times the original subsidy, depending on whether they have children, with couples with three or more receiving 1.8 times the original subsidy.

  Fourth, people who are disadvantaged economically (defined as having low or low-middle incomes) or socially (defined as being a member of an indigenous community, being 65 or older, or being disabled) would also be eligible for the subsidies.

  Landlords would be encouraged to help their renters apply for the subsidies, with the government offering landlords tax breaks with regard to their individual income tax, house tax and land value tax.

  The plan to expand the rental subsidy scheme is certainly welcome, as it goes some way to addressing the effects of structural problems. In the short term at least, the changes are likely to have a meaningful effect on low-income households: In New Taipei City, for example, a family with three children previously eligible for a subsidy of NT$4,000 would now receive NT$7,200.

  However, the new policy only tackles part of the problem and does not address the root causes — neither the imbalances within the housing market nor the underlying structural problems that have allowed them, and the wealth disparity, to form.

  It also comes at significant cost at a time when Taiwan has seen more than a decade of economic growth, raising questions of whether the policy is sustainable.

  Academics have long been arguing for the adoption of a more transparent and regulated actual price registration system to give renters access to reliable information about the appropriate level of rent, as well as more public housing, as Taiwan has a public housing stock of only 1 percent, compared with as much as 5 percent in Japan and South Korea.

  Adopting such policies could help redress the imbalances, as subsidies provide some relief, but are no cure.
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