Landlords, Subsidies, and Policy Failures: Renting in Taipei and New Taipei City

Written by Natalie Dai(戴淨妍), Jessica Hsu(徐卉馨), Sophia Lee(李昕儒), Dennis He(何正生); Translated by Sam Robbins.

This article is a section of a piece originally published by The Reporter, you can find the original article here. A seperate section of this article was published yesterday here.

Image Credit: Photo taken by  Chen Hsiao-Wei(陳曉威)provided by  The Reporter

To ease the pressure faced by young renters, the Ministry of the Interior implemented the first “subsidy for unmarried young people to encourage marriage and childbirth” in 2019. A total of 4,097 households applied for this subsidy in the Taipei City and New Taipei CIty. This accounted for 37% of applications across all of Taiwan, highlighting the challenges renters faced in the twin cities. This policy was combined with general rental subsidies in 2020, expanding a system that aimed to help a total of 12,000 households (up from 6,000). 

The expansion of rental subsidies in 2020 by the Ministry of the Interior seemed like it would help many renters. Still, the system has long faced a single and unrelenting problem: most landlords are unwilling to allow their renters to apply for the subsidy. Tsai Ya-fang, of the Tsuei Ma Ma foundation for housing & community services, described the subsidy as a policy visible yet out of reach for those who needed it. 

Lin Nuo-Nning, a 27-year-old Pingtung County native, has been studying and working in Taipei City for several years now and has lived in many spots across both cities. In 2019, a year after moving to her current apartment on Wenzhou Street near Taipower Building station, she applied for a new rental subsidy. She received a sizeable 4,000NTD (£102, $145) towards her 13,500NTD (£345, $489 monthly rent.

In August 2020, Lin Nuo-ning signed a half-year contract with her landlord and planned to stay in this apartment during her career move. However, when Nuo-ning applied for the subsidy for a second time, she received a call from her landlord whilst at work, criticising her for applying for the subsidy without telling her landlord first. As a result, her landlord asked her to move immediately. In applying for the subsidy, Nuo-ning had unintentionally caused the national tax bureau to contact her landlord to expect her tax records. 

When renters apply for the subsidies, their contracts must be reviewed, and other documents about the property often bring landlords’ unlawful practices to light for the first time. Unfortunately, according to the tax offices, most landlords refuse to allow renters to apply for the subsidies because it means their tax records will be checked. 

The landlord explained to Lin Nuo-ning that their contracts stipulated that the renter would pay additional taxes. The renter, not the landlord, would undertake the additional unpaid taxes uncovered during the investigation for the subsidy. However, according to the relevant law on the matter, landlords cannot pass on the tax burden in this fashion.

Despite knowing that the law supported her position, Lin Nuo-ning still felt uncertain when talking to her landlord: “why did applying for the subsidy become a tool to threaten me” “what’s going to happen to me tonight?.” Although she knew that her landlord’s requests were unreasonable, she decided to move out early and pay the fee for early contract termination. 

Lin Nuo-ning posted about her experience in Facebook and received many responses, with many providing her with legal and policy resources. When we interview Tsai Ya-fang, she told us that she too had paid attention to Lin Nuo-ning’s case, and sighing, said, “the subsidy was meant to help those most vulnerable to ease their economic worries, but in reality, it’s just reinforced the threat of being forced to move out at any time.”

There are, in fact, many similar cases of this happening. Tsai Ya-fang explained the two main reasons for this: the longstanding “black market” for renting and the fact that the official policies lack substantive punishment measures. Subsidies from the central government often fail to be given to those who need them the most due to the opaqueness of the market, and local governments have not yet produced any plans that successfully support renters. According to Tsai “over 90% of black market renters have not yet been uncovered”

Taipei City and New Taipei City local governments limit subsidy applications to those with low salaries or low family incomes. In New Taipei City, an “MRT rental subsidy” policy has been in effect since 20212, targeting students and workers in the city aged 18 to 40, but the demand outstrips supply. The city government had planned to offer 300 subsidies but received 817 applications, 526 of which were considered to meet the criteria. As a result, the government had to locate funds elsewhere, and the policy has been shifting every year since. It is yet to be seen whether it can be expanded in a more systematised manner. Regional governments have also tried to bring people into the cities through other policies (進城政策), but none have provided any meaningful aide to young people. 

The Taipei Government unveiled a “promoting young people to move to the city policy” in 2020, in which the government jointly developed a housing unit called “hope city” by Luzhou MRT station [in New Taipei City]. The property had 30 4-room large apartments designed for co-living for those studying and working in Taipei City. When four or more applied together, the price of the house was discounted by 15%. 

However, 27-year-old V (pseudonym) and their three flatmates became the only young residents in Hope City. After moving to study in Taipei, V became a renter and decided to apply to the policy after considering the price and transport links on offer. The rent was lower than the market price, and the property was a 55 ping (180 square meters; 2000 square feet) four-bedroom two-bathroom apartment with an MRT entrance and bus station right outside the building. However, V asked over 40 friends, and in the end, had to rely on shared-tenancy face groups to find three others willing to move into Hope City. 

Lin Wan-Jung, director of leasing and financing at the Department of Rapid Transit Systems, Taipei City Government, confessed that the policy was much less successful than was expected, with only 15 groups applying in total. The reason was that the 15% discount in combination with the strict requirement for at least four tenants was not appealing to young people. In addition, the rental period had to be a minimum of three years, with a two-month rental penalty fee for leaving early. V explain that, to unmarried young people, a three-year rental period is the limit “At this stage in our lives, everyone’s still running around, and things change as the time. No one knows what’s going to happen down the line.”

“We would have assumed that the low rent was very appealing, but the lack of applicants really shocked us,” Wan-jung told us. After an internal investigation, they decided to offer a 21% rental reduction (up from 15%) in the third round of application and opened application up to young people with families. As a result, of the 14 groups who entered Hope City, 13 were young families.

New questions arose after moving in. Due to the requirements of the joint development, the property was empty at the beginning of the rental period, with only a boiler, a gas cooker, a shoe rack, and cabinets. The tenants even had to instal their own air conditioning. V’s flat H said, “we tried to rely on the second-hand furniture store nearby as much as possible. We looked for the simplest version of things to keep our cost low.” In addition to not providing anything, the contract also requires renters to take everything with them when they move out, which drastically increased the cost of moving out. 

V told us, even if there are many issues with the programme, the reduced rents are still attractive. However, Wan-jung told us that there are no plans to work on a similar policy in the future due to the inadequate response. 

“How can you call moving to Luzhou entering the city (進城)? It’s leaving the city!” said Tsai ya-fang. “Taking a joint-developed building that hadn’t been rented out and framing it as a great opportunity for young people is just old wine in a new bottle.” Whether in the rental prices or other stipulations, this policy never actually considered the needs of young people.

“Entering the city policy” is part of the local government response to young people’s rental issues. There are now 20 locations in Taipei that are built specifically to rent out to young people, and there are a further 10 in New Taipei City. In 2017, the Taipei City Government unveiled the “Public housing Youth Innovation” project. From then until now, it is estimated that 136 young households have entered social housing units. New social housing units have already been put up for rent in New Taipei city, all of which are allocated to people aged 20 to 40 who can apply through the Youth Priority Household or Youth Co-living Programmes. There are a total of 1,125 households, so that young people could live in many locations across the city. 

Comparing the rental policies for young people in Taipei City and New Taipei City, it is clear that The Taipei City Government still does not have a comprehensive plan and relies on sporadic subsidies for individual projects. In contrast, the New Taipei City Government has provided a certain percentage of social housing units to young people on average and has done so through a more consistent plan. This said, compared with the remaining hundreds of thousands of young renters across the two cities, those who have benefited from these policies are still a minority. Thus, to ease the burden on the young renters, deeper structural reforms are still needed. 

This article was published as part of a special issue on Housing in Taiwan. You can find all articles in the special issue here.

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