Friday, 15 January 2016

Comment On "What Young Taiwanese Voters Want" - Article At "Thinking Taiwan" By Marie-Alice Mclean-Dreyfus

As below, with quotations in italics as usual. Article here. There is so much I could have picked apart in this article but I think I went with the most important bit...

"... while the starting wage for a fresh graduate in NT$25,175 per month. But housing prices in certain parts of Taiwan are among the highest in the world, and those wanting to buy a house in Taipei must save 15 years worth of wages..."

So just over NT$4.5 million for a "house" in Taipei? More than likely that's not a house, but rather a decaying, cramped apartment with rotten concrete in a bad part of town on the top floor of a fifty year old building without any elevator and no effective fire-escape mechanism, nor any space to allow a fire-engine to get close enough to the building. Fifteen years of peanut-wages means a 30 year mortgage, if at all possible, for what is basically a death-trap that would not pass a cursory safety inspection and should have been knocked down and rebuilt properly decades ago.

So I think it is fair to say the problem is largely understated.

The more typical scenario of a young Taiwanese actually buying a house is the guitar playing arts graduate, whose mommy gives him NT$10 million to put down on a small apartment (sold at just under NT$13 million) with him taking out a 20 year mortgage worth NT$3 million, which he is responsible for on an aggregate and variable income of less than NT$50,000 a month (his only stable job will be on the order of NT$24,000 - NT$26,000 per month). But that boy is only one of the lucky few with well-off Mommies and Daddies down in Tainan.

However, there is then the additional problem that private property rights in Taiwan are extremely weak, so that even those of us who do manage to buy a property are not secure in title - which rather defeats the point of buying in the first place. This was highlighted by the rapacious behaviour of the former KMT Miaoli County commissioner three years ago along with the failure of the Taipei city government to protect the rights of the Wang family who also had their properties legally stolen from them. When I asked my landlord's son (the landlord is an elderly gentlemen) if he'd be willing to sell me the little house I rent from him down here in the best part of Tainan, I was told the answer was no because they are waiting for a large developer to come along in a year or two and buy them and the neighbours out for more money than I could possibly afford. Yet even if I had persuaded him to sell, the house would probably have been "expropriated" from me once the developers got their word in the ear of the local planning officials.

This is what, to my mind, killed the KMT. Yet the opposition party leaders have shown no sign of favouring a stronger system of private property rights, which is what the poor need more than any warmed-up serving of yesteryear's social housing policies.


I should add that there is something which makes the property rights aspect of the problem especially bad. And that is the fact that most of the more remotely "affordable" housing stock in Taiwan is old and situated in areas ripe for urban renewal. This means (a) these are the only properties those of us on modest incomes can afford, and (b) these properties are also plum targets for developers and thus for legalized theft in the event the owners don't want to sell or they miscalculate in negotiation over price. So the possibility of future "expropriation" is a cloud that hangs over everyone in Taiwan who gets by on a modest income (e.g. NT$100,000 per month or less).

And which political party promised to repeal the land expropriation act? Why, none of them, of course! What is the point in little people having actual private property rights, when instead they can just have the "social impact" on their lives managed for them by the respectable academics and activists in government?

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