Taipei city grapples with housing woes

A residential building at the Cheng-Kung public housing estate in Taipei. Only 0.68 per cent of the city's 2.7 million residents live in 6,500 social housing units, with the rest renting or buying private properties.
A residential building at the Cheng-Kung public housing estate in Taipei. Only 0.68 per cent of the city's 2.7 million residents live in 6,500 social housing units, with the rest renting or buying private properties.PHOTO: BLOOMBERG

Taiwan's capital seeking to build cheaper public housing units as property prices spike

Hard-pressed to find a flat that he could afford with his NT$50,000 (S$2,100) monthly salary, civil servant Gao Der-jhih and his wife decided to move out of central Taipei to the Sanxia district in 2006.

Their 1,400 sq ft three-room flat in neighbouring New Taipei city cost only a third of the price of a flat of the same size in the city centre.

But one drawback is that Mr Gao, 41, has to endure an hour-long commute on the train and bus into the city centre to his workplace at the Ministry of Justice. "We had no choice... It just didn't make financial sense to me to spend more than half of my salary to get a studio flat in a dingy neighbourhood in Taipei," said Mr Gao, whose wife is a property agent in Sanxia.

Faced with stagnant pay and skyrocketing housing prices, many home buyers have been priced out of the property market in Taipei.

Housing prices have tripled since 2005 while monthly wages have inched up only about 3 per cent. As a result, many are forced to settle for cheaper alternatives outside the city.

Grappling with a greying population, the Taipei city government wants to stop the outflow of these young professionals and their families by offering cheap public housing, or social housing, in the city.

  • Exchanging ideas with cities in Asia

  • Taipei city is looking to tie up with cities in the region to come up with ideas to better develop public housing.

    It has started the Asian Housing Alliance to allow officials from different cities to exchange ideas and work together in joint projects, including to design and build new public housing estates. So far, Taipei and Seoul are in the grouping, with officials from Taipei working to include Singapore and Hong Kong, said Taipei city's Deputy Mayor Lin Chin-rong.

    Mr Lin said he extended the invitation to Singapore when he met officials from the Republic's Housing Board. He was on a three-day visit to Singapore last week to study how the HDB and Urban Redevelopment Authority implement policies on public housing, urban renewal and social welfare.

    During meetings with Singapore officials, Mr Lin also raised the possibility of Singapore contractors partnering their Taiwanese counterparts to build Taipei's public housing estates. HDB told The Straits Times he had brought up the housing alliance. "We will study the proposal when more details are presented to us," said its spokesman.

    Jermyn Chow

In Taipei, only 0.68 per cent of its 2.7 million residents live in 6,500 social housing units, with the rest renting or buying private properties.

Its deputy mayor Lin Chin-rong told The Straits Times: "We should not be punishing the young who want to live in the city with such high property prices.

"They should be given a chance to rent units at (lower) prices so that they can live in the city and keep it young and vibrant."

The plan is to build some 50,000 social housing units by 2021. For a start, hopefuls can apply for three-year leases, with the rent of flats likely to be pegged at 85 per cent of the average rental rates. The less well-off will need to pay only half of the rent.

Construction of the first 700 units in Nangang district in the city's south-east will start at the end of next month and the flats are expected to be ready by the end of 2018.

Demand for social housing is high, with the upcoming units oversubscribed. Mr Lin revealed that there are as many as 12 applicants vying for each unit. "This is a good start for us and, hopefully, the higher demand will spur more contractors to come in to build so that we can enjoy economies of scale. This could make rents even cheaper."

To ramp up construction, Mr Lin said, the city government hopes to work with President-elect Tsai Ing-wen, who has promised to build 200,000 affordable rent-only units islandwide in eight years.

The city will ask Ms Tsai's new government to release 10ha of land in the Xinyi and Wenshan districts for social housing.

It hopes that the central government will help defray costs of the first 20,000 units it is building, which are expected to be about US$3.5 billion (S$5 billion).

The deputy mayor was in Singapore last week to learn how the Housing Board builds and manages public housing for 80 per cent of the Republic's residents.

Undergraduate Hong Miao-shen, who moved from Taichung to Taipei to study engineering, said he hopes to be able to apply for one of the new social housing units.

"Jobs in Taipei pay more so I want to live here," said the 23-year-old.

A version of this article appeared in the print edition of The Straits Times on January 25, 2016, with the headline 'Taipei city grapples with housing woes'. Print Edition | Subscribe