9
The Pro-market Housing S
yst
em and
Demographic C
h an ge
in T
aiwan
Yi-
Lin
g
Chen and He
rng-D
a
r
B
in
Introduction
The inadequacies of Taiwan's land tax system and, since the mid-1980s, pro-mar kethousingpolicieshaveledto thecommoditizationof housingin Taiwan (Chen, 2011), resulting in a unique combination of high homeown
ership rates, high vacancy rates and high housing prices, making it difficult for the housing system to react to social chan ge or to fulfil social needs.
This chapter focuses on the interaction of the th ree major actors in the Taiwanese housing system - the state, the housing market and the family. The state has played a passive role not only as a supplier but also as a regula tor of housing. Government supplied housing contributes only 5.3 per cent of all housing stock, and is primarily built for sale rather than rental (Chen and Li, 2011), while only 0.08 per cent of housing stock is public rental housing (Social Housing Advocacy Con sortium [SHAC)r 2010). The design of the tax system and a lack of tran sparency in real housing transaction prices lead to speculation. Low housing tran saction taxes encourage invest ment in housing, while low property taxes reduce the cost of maintaining property.Asaresult,manyhous ingunits areleftempty as a store of wealth, and vacant housing in Taiwan is remarkable not onl y for its prevalence but also for its skyrocketi ng prices.
In this system , it falls to ind ividu al families to seek individual solutions and shoulder the primary respons ibilit y to secure sh elter. Since the mid 1980s, families have found them selves increasingl y exposed to housing affordability issues due to economic restructuring, widening social inequal ity and faulty housing policy. In response to in creasin g economic pressures, families have also gradually experienced great changes including delayed marriage, a dropping marriage rate and a dropping fertility rate. In 2010, Taiwan 's birth rate dropped to 0.9, among the lowest in the world. These changes occur in the context of a generation gap, with young people lack ing the econom icmeans toaccumulate thelevelsof wealth en joyed bytheir parents, and responding by having smaller families later in life. A recently
204
The Pro-market Housing System in Taiwan 205
publ ished book, The Palling Generation (Lin et al., 2011), capt ures the essence of this crisis and lays part of the blame on Taiwan' s speculative 'housing system .
This chapter begins by specifying the role of the state in the housing system , including its means of in tervention and its relation to the housing market. Socioeconomic, political and demographic changes since the 19905 are then analyzed in terms of their effect on the housing system. This is followed by an investigation of the housing affordability crisis beginning in 2005 and the social rental housing movement. Fin ally, the chapter high lights the high degree of commoditization ofTaiwan's housing and suggests that the state should reform the property tax system , be more responsive to demo graphi c changes and place more em phasis on social justice.
Historic al con text
State intervention has played a strong role in the economic developmen t of Asia's four little tigers - Singapore, Hong Kong, South Ko rea and Taiwan but has played very different roles in the development of the ir respect ive housing systems, with public housing being considerably less emphasized in Taiwan and South Korea than in Singapore and Hong Kong. Both Taiwan and South Korea embar ked on programmes of political democratiza tion beginn ing in the late 1980s, and their respective governments have responded to the pressure of political competiti on by expanding social poli cies (Rarnesh,2003;Wong,2004).Pengand Wong (20]0)argued that]apan, Korea and Taiwan have gradually formed inclusive social insurance which is unlike the ind ividualistic social protection in Hong Kong and Singapore. In recent years, the governments of South Korea an d Taiwan have also begun to initiate social housing projects, although a strong social rental housing movement did not begin in Taiwan until 2010.
The development of Taiwan's ho using system can be divided into three stages, with the state changing its role and means of interven tion over time. These three stages are referred to as laissez-faire, regulati on and promotion. In Taiwan, 'public housing' refers to housing provided by the state that pri marily is for sale,as opposed to ren t.
The laissez-faire ho usin g system from 1949 to the mid-1970s
In 1949, Taiwan experienced a massive influx of war refugees from China's civil war. Theserefugeesconc entrated in Taiwan's cities,precipitating a seri ous housing shortage. The Kuomintang (KMT) govern men t was also new to Taiwan and found itself incapable of managing the initial chaos durin g which refugees built illegal squatter settlemen ts (Figure 9.1), which them selves expanded as industrialization later attracted rural migrants to the cit ies. Public housing was provided only to civil servants working for central government and to very poor peopl e. In the 1950s, the govern ment began
.7
T
h
e
Pr
o-mark
et
Hou
sing
S
y
st
em an
d
D
e
m
og
raph i
c C
hange
in Taiwan
Yi-
Ling
Chen and
He
tng-Da
r B
ih
Introduction
The inadequacies of Taiwan 's land tax system and, since the mid-1980s, pro-market hou sing policies have led to the commoditization of housing in Taiwan (Chen, 2011), resulting in a unique combination of high homeown ership rates, high vacancy rates and high housing prices, making it difficult for the housing system to react to social chan ge or to fulfil social needs.
This ch apter focuses on the interac tio n of the three major actors in the Taiwanese housing system - the state, the hou sing market and th e family. The state has played a passive role not only as a supplier but also as a regula tor of housing. Government supplied housing con tributes only 5.3 per cent of all housing stock, and is primarily built for sale rather than rental (Chen and Li, 2011), while only 0.08 per cent of housing stock is public rental housing (Social Housing Advocacy Consortium [SHAC)r 2010). The design of the tax system and a lack of tran sparency in real housing transaction prices lead to speculation. Low housing transaction taxes encourage invest ment in housing, while low property taxes reduce the cost of main taining property.As a result,manyhousing unltsareleftempty asa store of wealth, and vacant housing inTaiwan isremarkable notonly for itsprevalencebut also for its skyrocketing prices.
In this system, it falls to individual families to seek individual solutions and shoulder the primary responsibility to secure shelter. Since the mid 1980s, families have found themselves increasingly exposed to housing affordability issues due to econo m ic restructuring, widening social inequal ity and faulty housing policy. In response to increasing economic pressures, families have also gradually experienced great chang es including delayed marriage, a dropping marriage rate and a dropping fertility rate. In 2010, Taiwan's birth rate dropped to 0.9, among the lowest in the world. These changes occur in the context of a generation gap, with youn g people lack in g theeconomicmeans to accumulatethelevelsof wealthen joyed bytheir parents, and responding by havin g smaller families later in life. A recently
204
206 Housing East Asia
Figure 9.1 Treasure Hill, an illegal settlement in Taipei
Note: With support from many civ ic organizatiom, this squatter village was preserved and repur posed asthe Taipei ArtistVillage.Someof theorigin alresidentsrem ain,andarepermi tted tostay for the rest of their lives, but cannot transfer title. (Yi-Ling Chen)
to emph asize economic development, taking control of financial institu tions and directing investment towards key industries. However, housing was not a high priority for fin ancial policy so that, although the state con trolled the ban ks, there was no mechanism for providing loan s to either private property developers or homebuyers.
In the 19605, the economic agenda emphasized the develop ment of labour-intensive light industry, shifting from an impo rt-substitutive towards an export-led econo mic strategy. With econom ic growt h averagin g around 9 percent through the1960s,Taiwan rosetobecom ea newlyindustrialized country in the system of the new international division of labour (Hsu, 2011). Rapid urban expansion during this time forced the government to begin improvingurban infrastructure,with asmall amou n tof public hous ing constructed for househ olds affected by urban constructio n (Figure 9.2). The shortag e of urban housing stimulated the development of the housing market an d, most import antly, the establis hment of privat e construction companies (Tseng, 1994: 91- 96). With out any institutional intervention or finan cial su pport from the state, privat e developers created an informal pre salehousingsystemtoaddressthehousing financ e problem.In thispre-sale
tJuUmllea cook, file Falling Generation (Lin et al., 2011), captures the essen ce of this crisis and lays part of the blame on Taiwan's speculative housing system .
This Ch apter begins by specifying the role of the state in the housing system , including its means of intervention an d its relation to the housing market. Socioeconomic, political and demographic changes since the 1990s are then ana lyzed in terms of their effect on the housing system. Th is is followed by an investigation of the housing affordability crisis beginning in 2005and thesocial rentalhousing movement. Finally,thechapterhigh lights thehighdegreeofcommoditization ofTaiwan 'shousing andsuggests that the state should reform the property tax system, be more responsive to demographic changes and place more empha sis on social justice.
Historical context
State intervention has played a strong role in the economic developmen t of Asia's four little tigers - Singapore, Hong Kong, South Korea and Taiwan but has played very different roles in the developm en t of their respective housing systems, with public housing being considerably less emph asized in Taiwan and South Korea than in Sin gapo re an d Hong Kong. Both Taiwan and Sou th Korea embarked on programmes of political democratiza tion beginn ing in the late 1980s, and their respective govern ments have responded to the pressure of political com petition by expandin g social poli cies(Rarnesh, 2003;Won g,2004).Pengand Wong (2010)arguedthatJapan, Korea and Taiwan have gradually form ed inclusive social insurance which is unlike the in dividualistic social pro tection in Hong Kong and Sing apore. In recent years, the governments of Sou th Korea and Taiwan have also begun to initiate social hou sing projects, although a strong social rental housing movement did not begin in Taiwan until 2010.
The development of Taiwan's housing system can be divided into thr ee
...
stages,with the statech angi ng its roleandmeansofintervention overtim e. These three stages are referred to as laissez-fane, regulation and promotion. In Taiwan,'public housing' refersto housingprovided bythestate that pri marily is for sale, as opposed to rent.The Iaissez-falre housin g system fro m 1949 to the mid-1970s
In 1949, Taiwan experienced a massive in flux of war refugees from Ch in a's civilwar. These refugeesconcentrated in Taiwan 'scities, precipitatin g aseri ous housin g Shortag e. The Kuo mi n tang (KMT) government was also new toTaiwan and found itself incapable of managing the initial chaos during which refugees built illegal squatter settleme nts (Figure 9.1), which them selves expand ed as industrialization later attracted rural migrants to the cit ies. Public housing was provided on ly to civil servants working for central government and to very poor people . In the 1950s, th e government began
...
The Pro-market Housil/g System ill Taiwal/ 207
Figllre 9.2 Fu-Yuan District Public Housing
Note: Built around 1969forhouseholds forced outby publicconstruction. Eolch unitisonly363 m (Sheau-Wen Tarng)
.
sche m econsumerspaida proportionof the housing priceprior tocon struc tion, and paid the balan ce when the project was completed, thus providing the developers with the funds to complete construction (Wu an d Wu, 200 4). However,buying pre-sale housingwashighl y riskybecauseof a lackoflegal protection , and its developmentwas amanifestation ofth eabsenceofstate
...
in terventio n (Li , 1998).
Beforethe mid-1970s, theKMT governmentintervened minimallyin social welfare,adopting a laissez-fairepositionin the housingmarket. Demand for housin g prompted the form ation of a private housing market, but much of this market was informal and ch aracterized by construction without permits, unlicen sedarchitectsand pre-salehousing.While the state failedto establish form al fina ncial an d legal systems to facilitate and regulat e the housing market, the inform al housing sector helped mitigate the housing shortage and reduce the cost of social reproduction, for example through the use of pre-sale fina ncing and the development of squatter settlemen ts. However, key drawbacks included the lack of legal protection for consumers and the fact that,in the absence of con sumerloansand publicassistance,each family had to put up the purchase price in cash, which generally involved saving or borrowin g through their kinship netw ork
Figure 9.1 Treasure Hill, an illegal settlemen t in Taipei
Note: With suppo rt from man y civic organ izations , this squatter villa ge was preserved and repur posedas theTaipeiArtistVillage. Some oftheorigin al resid entsremain, andare permitted to stay
for th e rest of their lives, but can n o t tra nsf er title. (Yi-Ling Chen )
to emphasize econom ic development, lakin g con trol of fin ancial institu tions and directing investment towards key industries. However, housing
was not a high priority for financial policy so that, although the state con trolled the ban ks, there was no mechanism for providing loans to either private property developers or hom ebuyers.
In the 1960s, the economic agenda emphasized the devel op ment of labour-intensive light industry, shifting from an import-substitutive towards an export-led economic strategy. With economic growth averaging around 9 per cent through the 1960s, Taiwan rose to become a newly industrialized country in the system of the new international division of labour (Hsu, 2011). Rapid urban expansion during this time forced the government to begin improving urban infrastructure, with a small amount of public hous ing constructed for hou seholds affected by urban construction (Figure 9.2). The shortage of urban housing stimulated the development of th e housing market and, most importantly, the establishment of private construction companies (Tsen g, 1994: 91-96). Without any institutional intervention or financial support from the state, private developers created an informal pre sale housing system to address the housing finance problem. In this pre-sale
208 Housing East Asia
The era of state promises:The mid-19 70s to the mid-1980s
The mid-1970s marked a major change in social policy as well as in hOUSing policy.The KMT governmenten acted the 'Public Housing Act'in 1975and incorporated the 'Six-year Housing Construction Programme' (1976-1981) into the national economic plan, aiming to provide 100,000 units of public hou sing (Figure 9.3). The driving force for th is large-scale housing project came not from labour or social movements, but was rather in response to two oil crises and diplomatic isolation (Mi, 1988, p. 113). In 1971 Taiwan lost her seat in the Un ited Nat ions to China and in 1979 the United States terminated diplomatic relations, leaving the KMT government without a valid claim to sovereign ty over Mainland China. Meanwhile, domestic democratic movemen ts emerged to question the legitimacy of the authori tarian state. The KMTstatefaced asevere confidence crisis, and thesituation worsened when the two oil shocks of the 1970s hit Taiwan's im port- based,
energy-dependent economy. The resulting rapid inflation, combin ed with
rapid GDP growth and an increase in the money sup ply contri buted to a
housin g boom. Upper-income families, seeking to preserve their wealt h in real estate, drove up housing prices so quickly that middle-income people found themselves even less able to afford housin g. Introducing the public housing program me therefore served to help th e govern men t to restore
Figure 9.3 Da-An District Pub lic Housing, completed in 1985 under the Six-year Housin g Construction Programme
Note: The newer units are lar ger with two to three bedroom s a piece and mor e public space. (Herrig-Da r Bih)
Figure 9.2 Fu-Yuan District Pub lic Housing
Note: Bullt around 1969for householdsforcedoutbypu b licconstruction. Each unitis only363 m -. (Sheau-Wen Tamg)
schem e consumers paid a proportion of the housing price prior to construc tion, and paid the balance wh en th e project was comp leted, thus providin g the develop ers with the funds to complete construction (Wu and Wu, 2004). However, buying pre-sale housin g was highly risky because of a lack of legal protection, and its development was a manifestation of the absen ce of state intervention (Li, 1998).
Before the mid-1970s,theKMT governmentintervenedmini mallyinsocial
-
welfare, adoptin g a laissez-faire position in the housing market, Demand for housing prompted the form ation of a private housing market, but much of this market was informal and characterized by const ruction without permits, unlicensed architects and pre-sale housin g.While thestate failed to establish formal financial and legal systems to facilitate and regulate the housing market, the informal housing sector helped mitigate the housing shortage and reduce the cost of social reproduction, for exam ple through the use of pre-sale financing and the development of squatter settlements. Ho-wever, key drawbacks included the lack of legal protection for consumers and the fact that,in the absenc eof consumerloans and public assistance, each family had to put up the purch ase price in cash,whichgene rally involved saving or borrowing through their kinship network.T
Tile Pro-market Housing System ill Taiwan 209political legitimacy (Mi, 1988). These public construction project s also
..
.
served to prop up domestic construction companies, an d thus stimulate the econo my, in imitation of Sing apore.However, Taiwan experienced considerable difficulty in implementing the Singaporean model. Urban land in Taiwan was mostly in private hands, making the cost of land acquisition prohibiti ve,especiallygiventhatTaiwan had no source of funding equivalent to Sin gapore's Central Providen t Fun d. Taiwan 's housin g authority had plann ed to build low-cost housing for sale to low-incom e families, but the high cost of land boosted the fin al price of the flats out of thereach ofthe target cons umers.Rat herthan furthersu bsi dizetheprice, the governmentrelaxed the income ceiling.In th eend,many of the flats built for low-income fam ilies were purch ased by middle an d upper-in come consumers (Housing Department ofTaipeiCity Government, 1987). Yet, the purchase price was still lower than the market price, att ract ing speculators who later resold the flats at a profit.
Taiwan'spublichousing, then,wasalm osten tirely builtfo r sale,not rent. In this sense, these large-scale housing pro jects in th e 1970s established last in g trends in housing policy: housing was treated as a commodity, an d not built for those who most needed access to public assistance.
During the econo mic stagnation in the 1970s, the housi ng project boosted
the constru ction industry and created some jobs. However, the project failed to reduce the cost of social reproducti on or labour costs, and public housing had little role in stimulating economic growth. Rather, th e national eco nomic plan implemented another major project: Ten Great Constructions,
including the constru ction of Taiwan 's first highway, an overhaul of the railway system, harbour expansion an d th e construction of petrochemical and steel facilities, which helped transform Taiwan 's industrial base towards heavy industry. The economy soon recovered and achieve d a sus tainable footing.
Themassivehousingconstruction programme, however,didmark achange in the government's attitude towards the hou sing market, with act ion being taken to control the housing market by direct involvement in housin g con-" struction, aiming to increase the housingsupplyand lower housingprices.In addition, the government also began to control funding for house pu rchases an d to adjust taxes related to housing sales. The purpose of these actions was to put a stop to unregulated housing development and speculation. Wherea. authoritarian rule could impose these measures with little opposition and speculationsoon cooled down,they were only temporarysincethere wasactu ally no intention of establishing com preh ensive regulations for the housing market.
The nature of state interv ention in housing from the 19 70s to the mid 1980s, then, was regulatory and Keynesian. The government began to take action to regulate the housing market but did not intend to establish long term market regulations. Although housing policy was incorporat ed in to
--- - - - - .... _ - ... ...., ...,.... r..v U I \:" 1I11U-.l 'OUS
The mid-1970s marked a major change in social poli cy as well as in hOuSing policy.The KMTgovernme n tenacted the 'Publi cHousingAct 'in 1975 and
incorporated the 'Six-year Housing Construction Programme' (1976-1981) into the national economic plan, aiming to provide 100,000 units of public
housin g (Figure 9.3). The driving force for this large-scale housing pro ject came not from labour or social movements, but was rather in response to two oil crises and diplomatic isolation (Mi, 1988, p. 113). In 1971 Taiwan lost her seat in the United Nations to China and in 1979 the United States terminated diplomatic relations, leaving the KMT government without
a valid claim to sovereignty over Mainland China. Meanwhile, domestic democratic moveme nts emerged to question the legitimacy of the autho ri tarian state.The KMTstate faced a severe confiden ce crisis, and the situation worsened when the two oil shocks of the 1970s hit Taiwan 's import-based, energy-depen dent economy. The resulting rapid inflation, co mbined with rapid GDP growth and an increase in th e money supp ly con tributed to a housing boom. Upper-income families, seeki ng to preserve their wealth in real estate, drove up housing prices so quickly that middle-income people found themselves even less able to afford housing. Introducin g the public
housin g programme therefore served to help the government to restore
Figure 9.3 Da-An District Public Housing, comp leted in 1985 under the Six-year Housin g Co ns truction Programme
Note: The newer units are larger with two to three bedrooms a piece and more public space. (Herrig-Da r Bih)
210 Housing East Asia
the nation al economic plan, its contribution to econ omic development was limited, and the social welfare aspects of housing were largely ignored. Liberaliza tio n from th e mid-1980s
In the early 1980s, the United States respo nded to its surging trade deficits
by institu ting protectio n ist trade policies and pressed Taiwan to open its
markets to internationa l trade (Mi, 1988). In addition , under US pressure,
Taiwan's currency appreciated by abo ut 40 per cen t against the US dollar
between 1986 an d 1989 (Chang, 1995), but with foreign exchange restric tionsloosenedin 1987 foreign capitalsurged intoTaiwan's financialmarkets for investmen t in Taiwanese dollars (Hsiao and Liu, 1993). With a saVings
rate of about 30 per cent of GNP thro ugh the 1980s, Taiwan had a large
supply ofidlemoneyto furt herfuelpropertyspeculation. The govern men t
respon ded to calls for economic liberalization from the US and large domes
tic enterprises by privatizing state-owned enterprises, abolishing contr ols on interest rates and exchang e rat es, and reducing tariffs. Fina ncial markets vere de-regulated in the mid-1980s and in terest rates began to drop (Li, 1998). Investors could get more fundin g from bank s and deposito rs wer seeking better returns than those available from banks, so the decrease of interest rates intensified housing speculation. The govern ment also moved from controlling the housing market to estab lishing regulations to stimulat
it. This in cluded such measures as encouragin g ban ks to provide mortgages
and facilitating th e establislunent of real estate management firms to in ter
vene in housing inve stment, consum ption and finance to ameliorate the problems associated with pre-sale housing (NU, 1988).
1986 also saw the establishment of Taiwan's first formal opposition party,
the Democratic Progressive Party (DPP). The forces of economic liberaliza
tion and political democratization gradually challenged the authoritarian KMTstate and its top-d own relation ship with the market.The government lost contro l of the housing market an d prices more than tripled in the six
years from 1986 to 1992 (Chang, 1995). Rampant land speculation in the
late-1980s, however, provoked Taiwan's first popul ar housing movem ent, which pushe d the government to increase the construction of public hous ing and improve financial controls on loans to private developers . These actio ns successfully slowed the rise of housin g prices.
Econom ic liberalization again became popular in the 1990s as Taiwan applied to join the World Trade Organization. Taiwan app lied for member ship in 1992 before the WTO was forma lly established, and finally became
a member in 2002. Public policies in the 1990s were more explicitly aimed at economic liberalization and deregulat ion to prom ot e Taiwan's WTO bid. In housing, the KMT govern me nt sought ways to balance the demands of
voters and the goal of liberalization, partially through the development
of housin g mort gage program mes. In 1990, the govern ment establi shed a number of mortgage subsidy programmes for different groups of people.
political legitimacy (Mi, 1988). These public construction pro jects also
servedto prop updomestic constructioncomp an ies,and thusstim ulatethe
economy, in imitation of Singapore.
However, Taiwan experienced considerable difficulty in im pleme ntin g the Sin gapo rean model. Urban land in Taiwan was mostly in private hands,
making the cost of land acquisition prohibitive, especiallygiven that Taiwan had no source of funding equivalent to Singapore's Central Providen t Fund.
Taiwan's housing authority had planned to build low-cost hous in g for sale to low-income families, but the high cost of land boosted the final price of
the flats out of the reach of the target consumers. Rather than further subsi dize the price, the government relaxed the income ceiling. In the end, many
of the flats built for low-income families were purchased by middle and upper-income consumers(Housing Department ofTaipeiCityGovernment,
1987). Yet, the purchase price was still lower than the market price, attract
ing speculators who later resold the flats at a profit.
Taiwan'spublichousing, then, was almostentirely built for sale, not rent. Inthissense, theselarge-scale housing projectsin the 1970sestablished last ing trends in housing policy: housing was treated as a commodity, and not built for those who most needed access to public assistance.
During th e economic stagnation in the 1970s, the housing project boosted the construction industry and created some jobs. However, the project failed
to reduce the cost of social reproduction or labour costs, and public housing had litt le role in sti mulatin g economic growth. Rather, the national eco
nomic plan implemented another major project: Ten Great Constructions, including the construction of Taiwan's first highway, an overhaul of the
railway system, harbour expansion and th e construction of petrochemical and steel facilities, wh ich helped transform Taiwan's industrial base toward
heavy industry. The economy soon recovered and achieved a sustaina ble
footing.
Th emassive housing construction programme, however, did marka change in the govern me nt's atti tude towards the housing market, with action being
taken to contro l the housing market by direct involvement in housing con-"
struction, aiming to increase the housing supply and lower housing prices. In
addition, the government also began to control funding for house purchases
and to adjust taxes related to housing sales.The purpose of these actions was
to puta stop to unregulated housingdevelopment an d speculation.Whereas authoritarian rule could impose these measures with little opposi tion and
speculationsooncooleddown,theywereonlytempo rarysince therewas actu
ally no intention of establishing comprehensive regulations for the housing
market .
The nat ure of state interven tion in housing from the 1970s to the mid 1980s, then, was regulatory an d Keynesian. The government began to take action to regulate the housing market but did not intend to establish long term market regulati ons. Although housin g policy was incorpor ated into
The Pro-market Housing System in Taiwan 211
Although state employees and military personn el still enjoyed the great
est housing suppo rt, benefits were extended to other groups, including workers, aborlgi nals and first tim e home buyers. The government began to
play an active role in ch annelling money from banks to the housin g mar ket (Construction and Planning Agency [CPA], 2006). Another significant change was an increase in the proportion of privately constructed pub lic
housing, built for sale rathe r than rent, which in the 1990s equalled that con structe d by state agencies (CPA, 2007). Qualifications and subsidies for residents in privately constructed public housing were simila r to those used in government-built public housing built by the government.
Respon ding to popular pressure, mortgage programmes were further boosted in 2000 under the DPP presidenti al administration which created a
mortgage programm e specifically targeting people between 20 an d 40 years
old. Thu s, since the early 2000s, with the goal of promoting the housing
market, mortgage program mes have become the key elem ent in housing
policy.In2008,the Ki\1Tregained power and continued thispolicy.
Thepro-market tr ansformation of thehousingsystem since the 1980s was accompanied by the rise of Taiwan's capita list class. Pollowing economic lib eralization in 1986, busin ess groups began to play an increasingly vital part
in Taiwan 'seconomy and have increasingly consolidated their position.The
marketgradu allycame underthecon trolofasmall number of largebusiness groups (Chu and Hung, 2002), many of which had interests in real estate. In
2010, Forbescou nted 18Taiwanesebillionaires,eight ofwhom were heavily
involvedin realestate (China Times,20 10b). Since the 1980s, the KMf had
drawn legitimacy from the support of these real estate developers.Pollowing democratization, the relationship between the state and the developers
grew even closer, as the state needed to rely even more on their support.
The developers themselves participated in elections and promoted their
own representativestostand in thelegislatu re. Thisresul tedin the focus of
housing policy sh ifting towards increasing the proportion of consum ers in
the housing market through the ext ension of mortgages, and indeed with
subsidized mortgages becom ing the prim ary focus of housing policy. ...
Alongside these developments, only very limited financia l assistance has
been provided to renters. In 2000, under the KMT, the Ministry of Finance implemented an income tax deductio n of up to NT$120,000, while in
2007 the DPP administration provided low-income renters with a monthly
subsidy of NT$3,OOO, ben efittin g at least 120,000 hou seh olds annually.
However, compared to market ren tal rates, the subsidies are quite small, and renters usin g these subsidies are treated poorly by the housing market. Th us,
the housing market is still seen as the best solution for both mortgages and rent subsidies, but it is questionable whe ther market mech an isms can solve the problem of low-incom e housing.
In contrast to the nee-liberal reforms in man y European and Nor th American countries, Taiwan's state intervention in the housing market
,,- - ----< --_·••~ J. u,,_ 1-'''''1, lIScouuru u non to economicdevelop mentwas limi ted, an d the social welfare asp ects of housing were largely ignored. Liberalization fro m the mid-1980s
In the early 1980s , the Unit ed States responded to its surging trade deficits by institutin g prot ectionist trade policies an d pressed Taiwan to open its markets to internatio nal trade (Mi, 1988). In additi on , under US pressure, Taiwan' s curren cy appreciated by abou t 40 per cent against the US dOllar betw een 1986 and 1989 (Chang, 1995), but with foreign exchange restrj-, tionsloosenedin 1987foreign capitalsu rgedintoTaiwan'sfinanci almarkets for investment in Taiwanese dollars (Hsiao and Liu, 1993). With a savings rate of about 30 per cent of GNP through the 1980s, Taiw an had a large supply of idle money to further fuel property speculati on. Th e governm ent respondedto callsforeco nomicliberalization from theUS andlarg edom es tic en terprises by privatizing state-owned enterprises, abolishing controls on interest rates and exchan ge rates, and redu cin g tariffs. Financial markets were de-regulated in the mid-1980s an d in terest rates began to drop (Li,
1998). In vest ors co uld get more fund in g from banks and deposito rs were seeking bet ter returns than those availabl e from banks, so the decrease of interest rates in ten sified housing speculation . The govern m en t also moved from con trolli ng th e housing marke t to establishing regu latio ns to stimulate
it. This in duded such measur es as encou raging banks to pro vide mortgages an d facilitating the establls hment of real estate management firms to inter vene in housing investment, consumption and finance to ameliorate the problems associated with pre -sale housing (Mi, 1988).
1986alsosaw th eestablishmentofTaiwan'sfirst fo rm al oppositionparty,
the Democratic Progressive Party (DPP). The forces of econo mic liberaliza tion and political democratizati on gradually challenged th e authoritarian KMT state and its top-down relationship with the market. The governm ent lost con trol of the housing market and prices more than trip led in the six
years from 1986 to 1992 (Chang, 1995 ). Rampant land spe culati on in the
late-1980s, however, provok ed Taiwan 's first popular housing movem ent,
which pushed the govern me n t to increase the constructi on of public hous ing and improve financial co n tro ls on loans to private develop ers. These actions successfull y slowed the rise of h ousing prices .
Economic liberalization again became popular in the 1990 s as Taiwan applied to join the World Trade Organization. Taiwan applied for member
ship in 1992 befor e the WTO was formally established, and finally became a member in 2002. Public policies in the 1990 s were more exp licitly aimed at econ om ic liberalization and deregulati on to prom ot e Taiwan's WTO bid.
In hou sin g, the KMTgovern men t sou ght ways to balance the demands of voters an d the goa l of liber alizati on , parti ally through the development of hou sing mortgage programmes. In 1990, the govern men t establishe d a number of mortgage subsidy programmes for different groups of people.
212 HOI/sing East Asia
increased in th e 1990s, but the logic of hous ing interventio n gradually shifted towar ds market mechanisms and neo-liberal principl es as th e sta te str ategically ap plied neo-Iiberal reforms (Ch en and Li, 2011). While state
intervention in hou sing had been m inimal previousl y, foll ow in g 1990 the state began to increasingly intervene, moving from the constructio n of public hou sing to en couraging hom eownership throu gh the liberalization of mortgagepolicies. Thein creased avail abili ty of mortgages andsubsidized in terest rates allowed more consumers to en ter the private hous ing market,
boosting the real estate and financial markets, while public ren tal h OUSing
rem ain ed a margin al comp on ent of th e overall housing syste m.
S
o
cioe
conomic,
p
olitical an
d demographic
c
h a n ges
si
n ce
t
he 1
990s
With these attempts to promote home own ership, the housin g market has faced a growing schism. Econom ic restructu ring in creased social in equality,
while housing policies have favoured the continued growth of the hous ing market and prevented the declin e of house prices. Taiwan's wealthy have
taken advantage of these conditions to invest their wealth in real estate,
while middle-and low-in com e families in creasin gly have struggled to afford
housing in th e face of eroding incomes and risin g housing prices. Since the 1990s, socioecon omic, politi cal an d dem ogra phic changes have exerted a strong impact on housing and future housing policies, but th e high degree
of comm oditization of housin g prevents th e govern ment from effectively
addressin gtheseissues.Depen den ce on the privateho usin g market toprovide
solutions also sign als that the government is not inclined to con trol house
prices or assist those Wh o have little chance of achieving homeownership. Economic restructuring and social inequality
FollOWingthecolla pseofTaiwan's assetbubble in the late 1980s, eco no mic grow th began to slow down an d fell below 10 per cen t (see Figu re 9.4). Begin ning in th e 1980s, Taiwan also faced increasin g competition for foreign investment from Ch in a and Southeast Asian coun tr ies. The rapid appreciation of the Taiwan dollar in the lat e 1980s inc reased th e cost of
labour, eroding th e com peti tivenes s of labour- intensive industries, which gradua lly moved ou t of Taiwan, initially to cou n tries in Sou th East Asia but, after 198 7, increasin gly to Mainland Ch ina (Hsu, 2011). Taiwanese direct capital investment in Ch in a increased rapidly. In 2005, Ch ina surpassed the USand Japan as Taiwan 'slargest tradepartn er (Wu, 2010).In a new interna tional division of labour, Taiwan transferre d many of its industrial produc tion lines to Ch ina, beginning with low-skill ed, labour- int ens ive in dustries in the 1980s an d then follo wed by high-skilled, high-tech indu stries in the late 1990 s (Hsu,2011).Alth ough cross-st rait inves tme n ts have enhancedthe compe titive adva n tag e of Taiwan ese firms, they also sign ifican tly reduced job oppor tu niti esan d workers' con ditio ns in Taiwan .
Although stat e em ployees and military perso nnel still enjoyed the great est housing support, benefits were exten ded to other groups inclu din g workers, abor igin als and first time home buyers. The government began to play an active role in channelling money from banks to the housin g mar ket (Constructio n an d Planni ng Agency [CPA],2006). Another significant cha nge was an increase in the proportion of privately constructed public housing, built fo r sale rath er than rent, which in the 1990s equalled that
constructed by state agen cies (CPA, 200 7). Qualifica t ions and subsidies for
residents in privately constructed public hous ing were similar to those used in government-bu ilt public housing built by the governmen t.
Respo ndin g to popular pressure, mortgage program m es were further boosted in 2000 under the DPP presidential adm in istratio n which created a mort gage progr am m e specifically targeting people between 20 and 40 years old . Thus, since the early 2000s, with th e goal of promoti ng th e housing
market, mortgage programmes have become the key element in housing
policy, In 2008, the KlvlT regained power and con tin ued th is policy. The pro-markettransform ationof the hou singsystemsince the 1980s was accom panied by th e rise of Taiwan's capi talist class. Following economic lib eralizati on in 1986, business grou ps began to play an increasingly vital part in Taiwan 's economy and have increasingly con solidated their positi on . The market gradually came under the control of a small number of large busines groups (Chu and Hung, 2002), many of wh ich had interests in real estate. In
2010, Forbes counted 18 Taiwanese billionaire s, eight of whom were heavily
involved in real estate (Chin a Times, 20 10b). Since th e 1980s, the KMT had draw nlegitimacyfrom the su pportoftheserealestate developers.Following demo cratization, th e relationship between the state and the developers
grew even closer, as the state needed to rely even more on their suppo rt. The developers them selves participated in elections and promoted their
own represen tatives to st and in the legislature. This resulted in the focus of
housin g policy shifting towards in creasing the proportion of consumers in the housin g market th rou gh the exten sion of mortgages, and in deed with subsidized mortgages beco m in g the primary focus of housing poli cy. ...
Alongside thes e dev elopments, on ly very limited fin an cial assistan ce has been provid ed to renters. In 2000, under the KMT, the Min istry of Finan ce implemented an in com e tax dedu ction of up to NT$ 120,OOO, whi le in 200 7 the DPP admin istration provided low-income renters with a m onthly su bsidy of NT$3,OOO, benefitting at least 120,000 households annually.
However, com pared to market ren tal rates, the subsidies are quite sm all, and renters using these subsidies are treated poorl y by the housin g market. Thus,
the housi n g market is still seen as the best solu tion for both mortgages and rent subsidies , but it is questionabl e whether market me chanisms can solve the problem of low-in come hou sing.
In co n trast to the nee-l iberal reforms in many European and North Ame rican countries, Taiwan 's state intervention in the housing market
Tile Pro-market Housing System ill Taiwan 213
- Economic growth rale ('!oj Percent 01unemployed to labor force (%)
12 107 ~ o \ , I I _ __ _ -1.65 -2- - - -- - - ~ ~ ~ -~ ~~~ ~ ~~~~~_~ _~~ ~~ ~ ~_ ~ _ N~ m ~ ~~~_~~ _ ~ ~ _ gN ~§gN NN§g gN g N g 8 S~N No N N
Figure 9.4 GDP growth rate an d unemployment rate, 1987-2011 Source: DGBAS (20 11a).
In 2010, overseas pro duction by Taiwanese manufacturers reach ed 50 per
cen t of Taiw an's total ma nufacturing output (Li, 2010). Taiwan's em ploy ment st ructur e has gradually transformed from manufacturing to services,
with employment in the service sector first exceedin g the industrial labour force in 1987. Labour-intensive manufacturing had previously helped balan ce regio nal develo pm ent in Taiwan becaus e the distribution of fac tories was relatively uniform throughout the islan d. However, the decline
of bot h the industrial and agricultu ral sector s accelerated the process of urbanization. Over th e past decade, Taiwan's pop ulatio n has in creasin gly concent rated in the island's three majo r metropolitan areas, especially in the northern region where most of the high -tech companies are located
(DGBAS, 2011b). 10
Sin ce th e 1990s , structu ral unemployment has gradually increased, with overall unemployment reaching a record 5.9 per cen t in 2009 (Figure 9.4). Workin g con dit ion s have also deteriorated as the number of n on-regular worke rs hasincreased. From 2001 to2009, the numberof part-t imewor kers tripled (Li, 2010), with these workers earning on average 50 per cent less than their full time cou n te rpar ts (Lin et al., 2011). Following the 1990s,
workers' conditions were ch aracte rized by lon g working hours, high con sumer prices, an d low wages (Lin et al., 20 11).
Theyoungergeneration hasbeen most affected bytheecon om icrestruc turing. By 2009, the long-term unemployment rate reached 34.2 per cent amo n g people below 30 years old, of which 30 per cen t had a univ ersity education or above (Li, 2010 ). In addition , the income gap has widened. In 1998, the average income for thosewit h the top 5 percent of incomeswas
increased in the 1990s, but the logic of housing in tervention gradually
shifted towards market mechanisms an d neo-liberal prin ciples as the state
strategicall y applied neo-liberal reforms (Ch en and Li, 20 11). While state
intervention in housing had been min imal previously, foll owing ]990 the
state began to increasingly intervene, moving from the constructio n of public housing to enco uragin g homeownersh ip through the liberalization
of mortgage policies.Theincreased availabil ity ofmortgages and subsidized interest rates allowed more consumers to enter the private housing market, boosting th e real estate and financial markets, while public rental housing remain ed a marginal component of th e overall housing system.
So
cioeconomic
,
poli
tical a
nd demogr
aphic
c
h an ges sinc
e
th
e
1990s
With th ese attempts to promote homeownership, the housing market has faced a growin g schism. Economic restructuring increased social in eq uality, while housing policies have favoured the con tin ued growth of the housing
market and prevented the decline of house prices. Taiwan's wealthy have
taken advantage of these conditions to invest th eir wealth in real estate,
while middle-an d low-income families increasin gly have stru ggled to afford housin g in the face of eroding income s and rising housing prices. Since the
19905, socioeconomic, political and demo graph ic ch anges have exerted a
strong impact on housin g and future hou sing policies, but the high degree of commoditization of hou sin g preven ts the government from effectively
addressingthese issues.Dependen ceon theprivate housingmarkettoprovide solutions also signals that the government is not inclined to control house pricesor assist thosewho have little chan ceofachieving homeown ersh ip.
Economic restructuring an d soci al in equ ali ty
Followin gthe collapse ofTaiwan's asset bubblein the late 1980s,economic
growth began to slow down and fell below 10 per cent (see Figure 9.4).
Beginning in the 1980s, Taiwan also faced increasin g competition for foreign investmen t fro m China and Southeast Asian countries. The rapid appreciation of the Taiwan dollar in the late 1980s in creased the cost of labour, eroding the competitiveness of labour-intensive industries, which
gradually moved out of Taiwan, initially to countries in South East Asia but,
after 1987, increasingly to Mainland China (Hsu, 2011). Taiwanese direct
capital investment in China increased rapidly. In 2005, China surpassed the US and Japan as Taiwan's largest trade partner (Wu, 2010). In a new interna tional division of labour, Taiwan transferred many of its industrial produc tion lines to China, beginning with low-skilled, labour-intensive industries in the 1980s and then followed by high-skilled, high-tech industries in the
late 1990s(Hsu, 2011).Although cross-strait investmentshave enhanced the competitive advan tage of Taiwanese firms, they also significantly reduced
job opportunities and workers' con ditions in Taiwan .
2 14 HOI/sing East A sia
33 times greater than for those with the lowest 5 per cent, but this increased
to 65 times in 2008, 75 in 2009, and 93 in 2010. The 2008 financial crisis hit the lowest 5 per cent group hardest because their incomes dropped more
dram atically than other groups, thus accelerating the increase in th e inCome gap after 2008 (Liberty Times, 2011 and 2012).
Dem ograph ic transform a ti ons
Econ omic restructuring has also slowed th e process of family format ion. From 1956 to 2010, the percen tage of adults aged 25 to 34 who had never married rosefrom 11.4 per centto56.7percent (Table9.1).Familiesarealso
smaller, and while nuclear families are still th e domin ant household type,
their numbe rsare falling asthenu mberofoneperson householdsincrease.
In 2010, nuclear families accoun ted for 54.5 per cen t of all households, as
opposed to 22 per cent for one person ho useholds (Table 9.1).
The risingstatu sof women inTaiwan hasalso contribu ted tofam ilychange.
Since the start of econ omic restructuring, women have played a growing role in the labour market, with female labo ur part icipation increasing from
32.3 per cent in 1980 to 49.9 per cent in 20]0, and that of men decreas ing from 77.] per cent to 66.S per cent over the same period (Table 9.1).
The wage gap between men and women has also gradually closed, with the
ratioofaveragesalariesfor womento men risin gfrom69percentin ] 980 to 80.1 per cent in 20 10 (Table 9.1). In ]990, women were the primary inc ome
earn er in 18.2 per cen t of households; by 2010, this had increased to 33 per
cen t (Table 9.1).
Women'simproved economicstatushasalso given the mgreater autonomy
in decisions regardIng marriage and family life. From 1999 to 2009, th e proportion of women aged 15 and above wh o were married declin ed from
57.2 per cent to 51.7 per cent, while the proportion of divorced women rose from 4.2 to7.2 per cent,and that for womenwho had nevermarried alsorose slightly from 30.3 to 31.6 per cent (DGBAS, 2011c). The increase of never
married women was especially pron ounced amon g the younger gen eration.
In 2010, 95.9 per cent of women aged 15-24 were unmarried, as opposed to 47.8 per cent for women aged 25-34, and 14.7 per cent aged 35-44. Compared with 2000, the percentage point increases were 6.2, 14.6 and 5.7, respectively
(Table 9.2). The ratios of men who were never married, or were divorced or separated all increased significantly over the period 2000-2009 (Table 9.2).
Although an increasing number of households are headed by women,
thesehouseholdsare morelikelyto be poor,with an average incomeof only 81.3 per cen t of those headed by men in 2009 (DGBAS, 2011c). Among the low-income households that receive social welfare programmes, the ratio of female-h eaded households reached to 45.2 per cent in 2008 (Department of Stati stics, Ministry of Interior, 2008).
Th e most stnking effect of the econ omic restructuring has been the dra matic fall in Taiwan's birth rate, with births per 1,000 women aged between
Econorntc growth rate (0/01 ... Percent oi uosmptoyec to labor force (% )
12 tn 7 10 ~ .;;2 .·--~· ~ f" \ f \ . i 7.88 _._ I \ 8 . 1 1 ~ i ,'«::A: 4. ..,. rn 6 "I" 6 .4 6 I r \- 687 .... "'i't. O~ .~.- ~... d~ . ~ • -1 65
-4
- -
O _-
N~~~~- - --
~-
OO-
~g-
~NM~~~~~~-
- -
- - - --
g-
-NM~~~~-
-
- -
-
-
OO~- -
O~
~ _ ~ _ - 0 ~ NNN N~~ NN N N gs g;; ~ ~ en_ 0)~~ ~ ~m
0' g ~ ~ ($) g; ~ gm
~ 8 g :3 0~ 8 ~ gg ~ ;; 0Figure 9.4 GOPgrowth rate andunem ploymen t rate, 1987-2011
SOl/ree: DGBAS (2011 a).
In 2010, overseas produ ct ion by Taiwanese manufacturers reache d SO per
cent of Taiwan's total manufacturing outpu t (Li, 2010). Taiwan's employ
men t structu re has gradually trans fo rmed from manufacturing to servi ces, with employmen t in the service sect or first exceedi ng the industrial labo ur
force in 1987. Labour -intensive manufacturing had previously helped
balan ce regional development in Taiwan because th e distr ibutio n of fac tories was relat ively uniform throughout the island. However, the decline of both the industrial and agricultura l sect ors accelerated the proc ess of
urbanizat ion. Over the past decade, Taiwan 's popu lation has in creasingly concentrated in the islan d's three major metropolit an areas, especially in the nort h ern regio n where most of th e high-tech companies are located
(DGBAS, 2011b). ;"
Since the 1990s, structural unemployment has gradually increased, with overall unemployment reaching a record 5.9 per cent in 2009 (Figure 9.4).
Working conditions have also deteriorated as the number of non-regular workers has increased. From 2001 to 2009, th e nu mber of part-time workers tripled (Li, 2010), with these workers earn ing on average 50 per cen t less
than their full time counterparts (Lin et al., 2011). Following the 1990s,
workers' con ditions were characteri zed by long working hours, high con sumer prices, and low wages (Lin et al., 2011).
The younger generation has been most affected by the economic restruc turing. By 2009, the iong-term unemployment rate reached 34.2 per cent
among people below 30 years old, of which 30 per cent had a university
education or above (Li, 2010). In addition, the income gap has widened. In 1998, the average income for those with the top 5 per cen t of incomes was
The Pro-market Hal/sing System in Taiwan 215 Table 9.1 Gen der,marriage, familyand housing statusinTaiwan, 1956-20 10
1980 1990 2tlOO 20 10 195 6 1966 1970
Women's status
39.3'16 44.5% 46.0% 49.9% fe male labour
participation rate (°/6) *
77.1% 74% 69.4% 66.5%
Male labour participation
rate (%) * 69.0% 67% 74.19{, 80. 1% Female to male average wage (%) •• 2.5 1.8 1.7 0.9 Total fertility ratc"' " 6.5 4.8 4 18.2% 29.2% 33%
Female householders (%) Marital sta tu s
11.4% 15% 14.3'Vo 20.9% 31.6% 42.3% 56.7'Jof)
Age 25-34 popula tion ,
never married (%)
Age 15 and older population, 27.6% 33.2°/(, 35.2% 35.7% 34.2% 33.59{, 33%
never married ('Yo)
2.9% 5.5%
Age 15 and older population, 1% 1.6% 1.8% 1.3% 2%
divorced or separated (%)
:' 5.7% 4.7% 4.8% 5.3% 5.4% Age 15 and older 8.49' 6.2% pop ulation, widowed (%) Family status 5.5 3.3 Average persons In household 5.7 5.7 4.8 4 3 6.7% 11.8% 13.4% 21.5% 22%
One person househol d (% ) 9 .4%
63.6% 55.1°/(, 54.5%
Nuclear famil ies (% )
5.8n;., 5.8% 7.6% Single parent families (%) 167,827 299,328 350,456 Number of elderly living alone (age 65+) Ho us ing status 66.3% 66.1% 79.1% 78.5% 82.5% 83.9% Homeownership rate (%) lA% - 13.1% 13.3% 17.6% 19.3% Vacant housin g rate (%)
Note: * DGBAS, 20 12; ** Cha ng, 201l, p. 283; *** Departmen t of Hou sehold Registration, ;, imLl ry
of In terio r, 2012.
Source: DGIlAS (1980 , 1990, 2000, 2010).
15 and 49 dropping from 6.5 in 1956 to 0.9 in 2010 (Table 9.1). The rapid
declinein thefertilityrate hasgreatly changed the compositi on of thepopu
lation, contributing to its rapid ageing: the proportion of the population 65
or older rose from 2.5 per cent in 1966 to 10.7 per cent in 2010, while the population aged 15 or under shrunk from 44.2 per cen t to 15.8 per cent
(Figure 9.5).
The sudden drop in the fertility rate could be a manifestation of a 'fertility
'
'
''
33timesgreat er than for those with thelow est 5per cent,bu t thisincreasedto 65 times in 2008, 75 in 2009, and 93 in 20 10. The 2008 financial crisis hit the lowest 5 per cent group hard est because their inco me s dropped more dramatically than oth ergro ups,thu saccelerating the increasein theincome
gap after 2008 (Libe rty Tim es, 2011 and 2012). Demographic transformations
Econo m ic restruct uring has also slowe d the process of famil y formation.
From 1956 to 2010, the percentage of adu lt s aged 25 to 34 who had never
married rose from 11.4 per cent to 56.7 per cent (Table 9.1). Families are also
smaller, an d while nuclear families are still the domin ant household type, their numbers are falling as the number of on e person households increase.
In 2010, nuclear families accounted for 54.S per cent of all households, as
opposed to 22 per cent for one person households (Table 9.1).
Th erising status ofwom en inTaiwan hasalsocontribu tedtofamilychange. Since the sta rt of econom ic restru ctu rin g, women have played a gr owin g
role in the labour market, with fem ale labo ur par ticipation increasing from 32.3 per cent in 1980 to 49.9 per cent in 20 10, and that of men decreas
in g from 77.1 per cent to 66.5 per cent over the sam e period (Table 9.1). The wage gap between men and women has also gradually closed, with the ratio ofaveragesalaries forwomen to men risin g fro m69 per centin ] 980to 80.1 per cent in 2010 (Tabl e 9.1). In 1990, women were the primary income
earnerin18.2percen tof households;by20 10, this had increasedto 33per
cen t (Tab le 9.1).
Women'simprovedeconomicstatushasalsogiven themgreaterautonomy
in decision s regarding marriage and family life. From 1999 to 2009, the
prop ortion of women aged 15 and above who were married declined from
57.2 per cent to 51.7 per cent, while th e proportion of divorced women rose
from 4.2 to7.2 per cent,andth at forwomenwhohadnever marriedalsorose
sligh tly fro m 30.3 to 31.6 per cen t (DG BAS, 20 11c). The increase of never
married women was especially pron ounced amon g the younger generation.
In 2010, 95.9 per cen t of women aged 15- 24 were unmarried, as opposed to
47.8per cent for women aged 25-34, and 14.7per cent aged 35-44.Com pared
with 2000, the percentage point increases were 6.2, 14.6 and 5.7, respectively
(Table 9.2). The ratios of men who were never married, or were divorced or separated all increased significantly over the period 2000-2009 (Table 9.2).
Although an increasing number of households are headed by women,
these households are more likely to be poor, with an average income of only
81.3 per cent of th ose headed by men in 2009 (DGBAS, 20llc). Among the
low-income households that receive social welfare programmes, the ratio of
female-headed households reached to 45.2 per cent in 2008 (Departm en t of
Statistics, Ministry of Interior, 2008) .
The most striking effect of the economic restructuring has been the dra
matic fall in Taiwan's birth rate, with births per 1,000 women aged between
21 6 Housing East Asia
Table 9.2 Gende r, marita l statusand age, 2000and 2010
~"
2000 2A
V-.!.V
Gender/age never divorced or never divorced or
married (%) separated (% ) married (% ) separated (%)
Men 15-24 96.7 0.2 98.6 0.1 25-34 51.3 2.0 65.8 2.9 35-44 14.5 4.6 20.2 8.2 45-54 5.7 5.2 8.0 8.9 55-64 3.4 3.3 3.5 7.2 65+ 7.2 2.4 3.4 3.9 Women 15- 24 89.7 0.4 95.9 0.3 25-34 33.2 2.6 47.8 4.0 35-44 9.0 5.5 l t 7 3.9 45- 54 4.2 5.4 6.5 10 ' 55-64 1.5 2.7 3.6 7.5 65+ 1.0 1.3 1.9 2.9 Source. DGBi\S (2011 b). IOunder 15 []15 - 64 . above 651 100 I I I I I I I I 15,8 21,2 80 60 40 20
o
~"lL..,..-li'«:iL,-..)I! .I~. I -*JI U 1966 1970 1980 1990 2000 2010 Figure 9.5 Age distribution, 196 6-2010Source: DGBAS (2011 b, p. 11).
elevation of women's status has weak ened Taiwan's dominant patriarchy,
though its intluence persists. Women con tin ue to be largely responsible for housework. As of 2004, 75 per cent of women over the age of 15 reported
regularly handling housework duties and providing primary care for family
Table 9.1 Gender, marriage, tamily and nou smg Slaw, ill 1,11
Vi
1970 1990 20 00 20 to
L9 56 1966 1980 Women's sta tus
39.3% 44. 5% 46. 0% 49.9%
Female labour
participation rate ('Yo) *
66. 5°,1,
77.1 % 74% 69 .4%
Male labour participation rate (%) •
69.0% :)7% 74 .1% 80.1'X,
Female to male average
wage (%) ..
';.8 4 2.5 1.0 1.7 0.9
Total fertility rate ' · 6.5
18.2% 29. 2% :-}3(X>
Female householders (%) Marital sta tus
14.3% 20.9% 31.6% 42.3% 56 .7% Age 25- 34 population, 11.4°/(, 15%
never married (%)
27.6% :.2'K 35.2% '~5 .7'Vo 34.2% 33. 5% 33%
Age 15 and older po pu l.vi or i,
never married (o/h)
i.6% 1.3% 2% 2.9% 5.5%
Age 15and older po pulatio n, 'l'Yo 1..(',°/6
divorced or separated (%)
Age 15 and older 8.4% :,.2% 5.7°/" '.,7% 4.8% 5.3% 5A%
population, widowed (%)
Family status
3.3 3
Average persons in household 5.7 5.7 5.5 4.8 4
9.4% 6.70/0 L1.80/0 13.4% 21.5% 22%
One person household (%)
63.6% 55.1%> 54.5%
uclear families (%)
5.8% 5.8% 7.6%
Single parent families (%)
16 7,827 299 ,328350,456
Number of elderly living
alone (age 65+)
Housing sta tus
66.3% 66.1% 79.1% 78.5% 82.5% 83.9% Homeownership rate (% )
13. 1% 13.3% 17.6% 19.3%
Vacant housing rate (%) 1.4%
.
-Note: •DGBAS, 2012;•• Ch ang. 20II,p. 283;••• Dep artmen t of Household Registra tio n,Ministry of In terror, 20 12 .
SOllrce: DGBAS (1980, 1990, 2000, 2010).
15 an d 49 dropping from 6.5 in 1956 to 0.9 in 2010 (Table 9.1). Th e rapid decline in thefertilityratehas greatly changed the com po sitio n of the popu
lation, contributing to its rapid ageing: the proportion of the population 65
or older rose from 2.5 per cent in 1966 to 10.7 per cen t in 20 10, while the
population aged 15 or under shrunk from 44.2 per cent to 15.8 per cent
(Figure 9.5).
The sudden drop in thefertility rate could be a manifestationof a'fertility
strike' against the lack of public support for child care (Lin et al., 2011). The
,
u .) ,,-,;.v . v~
The Pro-market Housing System ill Taiwan 217 members and their child ren, as opposed to 31.3 per cent for men (DGBAS,
Z007).Social welfare policies are based on a'familial ideology' thatholdsthe
family primarilyresponsibleforpro Vidin gfor thewelfareof its me mbers (Hu,
1995; Fu, 2010). In 2010, 88.3 per cent of children under four did not attend
day care (DGBAS,20 llb) . Only 7.1 per centofdaycare centresare run by the government (X ie, 2010). While some subsid ies are provided fo r the day care
expenses of the lower inc ome families, child care policy is largely reliant on private initiatives and market mechanism s (Lin et al., 201 1).
Families are also the prim ary carers for old er people in Taiwan. In 2010, 52.2 per cent of people over 65 years old lived with their ch ildren (DGBAS,
ZOllb). How ever, the number of people, aged 65 or older who were liv
ing alon e more than doubled between 1990 and 20 10 (Table 9.1). About
16.8 per cent of olde r peo ple require assist ance in their everyd ay lives. Amon g these, 3.9 per cent live in institutions, 16.6 per cent hired a foreign
or domestic helper, 62.8 per cent relied on their families and the remain ing 12.1 per cent lived withou t an y assistance (Department .of Statistics,
Ministry of Interior, 2011).
nd er the 'familial ideol ogy ' ap p ro ach, direct state intervention in t he
car e of old er people is very limited. The social welfare policies of Taiwan's
governm en t offer little support for families, however. Rather than provide direct aid or services, the go vern m ent prefers to su bsidize the purchase of servi ces from the private market, and the marke t-led housing system leaves families primarily respon sible for securi ng th eir own housing. However,
with the increasin g prevalence of one-person and single-paren t house holds, family formation is more un stable than befo re, but housing policies
contin ue to favour nuclear families, with unmarried people unable to ben
efit from housin g policy until th ey tum 40 year s old. Housing policy also
implicitly discriminates agains t gay and lesbian couples because the state
does not recognize gay marriages. The deceleration of family formation is a
signal that the fam ily unit is no longer able to assume such a heavy burden
for social reprod uction, espe cially in times of econo m ic restru ct urin g and
evolving gen d er relations. ...
Set agains t this, policy makers seem to favour members of th e yo u nger
generation. Since 2000, householders between 20 and 40 can apply for
government-backed low-interest mortgages. However, housing prices have
continued to rise quickly, and det erior ati ng working con ditio ns have
reduced incomes in this age group, creating a Widespread housin g crisis
am o n g this group.
Re
ce
nt
d
evelopme
nt
Hou sing affordabil it y crises since 2005
Given the vol atility of the economy, Taiwan 's housin g boom, beginning