Built to Fail ?
How Taiwan’s Housing System Is Designed to Exclude
Yu Lin (Rachel) Hsu _ Taiwanese Licensed Architect, 2025
Why Taiwan’s Housing Crisis Is a Product of Systemic Design
When I first graduated, I faced the harsh reality of Taiwan’s housing market. Nearly half of my salary went towards securing a “reasonable” rental place in Taipei. What did “reasonable” mean? A place with a window that looked outside, a commute that didn’t exceed one hour, and basic furnishings like a wardrobe. Yet, despite these minimal requirements, the reality was a small room that could barely fit a single bed.
Even though my income increased over the next two years and surpassed the national average, since I started my own practice and essentially had two jobs, the situation didn’t improve much. I still had to spend about a quarter of my income to rent a home with similar conditions, but this time, I had to share a bathroom with five other tenants. For many others, their rental costs took up a third of their salary, or even more. This structural imbalance makes it almost impossible to save any money, let alone save up to buy a home. Housing prices have risen to such an incomprehensible level that, for most of Taiwan’s population, owning a home is now nothing more than a distant, unreachable dream.
As an architect and former public-sector project manager for public works, I’ve seen firsthand the challenges that the construction industry faces today. There is a severe shortage of skilled labor, which has driven up construction costs. However, the story behind the high prices is more than just labor costs. Many developers in Taiwan have been sitting on land they purchased decades ago, when land was cheap. These developers often wait for the property market to appreciate before selling, ensuring that they can profit from the rise in land values.
This “land hoarding” behavior, coupled with government policies that incentivize development in high-demand areas, has led to a situation where many new housing developments are aimed at the higher-income market, further marginalizing those who need affordable housing the most.
The Unstoppable Surge in Housing Prices: A Case Study from Tainan
Take my hometown, Tainan, as an example: In 2020, the price for new homes in the city center was around NT$170,000 per ping (approximately 3.3 square meters). By 2022, this had surged to NT$270,000 per ping, and projections for 2025 suggest prices will reach NT$540,000 per ping. In just five years, housing prices have risen by over 300%. Meanwhile, Taiwan’s minimum wage has only increased by about 50%. This means that the gap between income and housing prices has grown astronomically, pushing homeownership out of reach for the vast majority of people.
In this context, it’s important to recognize that Taiwan’s housing affordability crisis isn’t just a problem for the low-income population. Even those with higher salaries struggle to keep up. According to a 2022 study by the Taiwan Financial Information Center, the average age of first-time homebuyers has risen by five years compared to a decade ago, from the early 30s to the early 40s. This shift is a direct result of the growing difficulty young people face in securing enough capital for a down payment.
The inability to afford a home is no longer just a problem of income disparity.
It has become a national issue, affecting social mobility and the financial future of an entire generation. For many young people, renting has become a way of life, not a temporary phase.
The Housing Market: A Cycle of Speculation and Exclusion
After five years of working, I was fortunate enough to have saved enough for a down payment (though I used it to fund my Master’s degree at Columbia University). But had I not chosen to study abroad, I might have become a part of the speculative cycle that defines the Taiwanese housing market. With property prices rising so rapidly, the most “practical” option is to buy a small two-bedroom apartment, wait for the price to appreciate, and then sell it for a profit to buy a larger home. In other words, in order to live in a comfortable home, you have to join in the speculation and contribute to the rising prices.
This system has created a vicious cycle where prices keep escalating, driven by speculation, and the benefits largely go to those who already own property. The few people who own homes can leverage them for financial gain, while the majority of people, especially younger generations, are left out of the market. As prices continue to rise, those who eventually manage to buy into the market are more likely to experience financial stress and anxiety about maintaining ownership rather than simply enjoying the stability of homeownership.
The property market has transformed from a space for housing into a financial instrument. Housing is no longer primarily a place to live; it’s a commodity that can be bought, sold, and speculated on. This shift in how housing is viewed has profound consequences on society, and it highlights the need for systemic change in how the housing market is structured and regulated.
The Systemic Nature of Housing Inequality in Taiwan
We often hear that the housing market has “gotten out of control,” but in reality, it is operating precisely as it was designed.
The government has raised land prices, increased the minimum wage, and yet fewer people are willing to work in construction due to difficult working conditions and low wages. Furthermore, the government has been reluctant to ease restrictions on foreign labor, exacerbating the shortage of workers in the construction industry. As a result, the cost of building homes continues to rise, and property prices follow suit.
One of the critical factors that has perpetuated this cycle is the commodification of land and property. Land in Taiwan has become a store of value, a commodity for investment rather than a fundamental need. As long as housing is treated as a speculative investment, the market will continue to favor the rich, with lower-income and middle-class families being increasingly shut out of the possibility of homeownership.
The government’s policy responses, such as the implementation of measures like the vacant housing tax, the real price registration system (實價登錄), and selective credit controls, have been insufficient in tackling the root causes of the housing crisis. These measures are primarily aimed at curbing speculation and providing some transparency in the housing market, but they are not enough to address the underlying systemic problems. Political pressure, lobbying by powerful interest groups, and the lack of a comprehensive housing policy have all played a role in preventing meaningful change.
Taiwan’s government has made some efforts to tackle the housing crisis, including the promise of 200,000 new social housing units by 2024. However, there remains a severe imbalance between the demand for affordable housing and the government’s progress in delivering it. As noted by the Taiwan Housing and Urban Development Foundation, social housing in Taiwan accounts for less than 1% of the total housing stock, far below the levels seen in other developed countries. The 200,000-unit target, while ambitious, is far from adequate given the size of the housing gap (Taiwan Housing and Urban Development Foundation, 2016).
Furthermore, the government’s recent efforts to curb speculation, such as the revision of the Land Rights Act to reduce speculative land acquisitions, have had limited success. While these measures aim to slow down the rampant speculation that has driven up housing prices, they fail to address the root cause: Taiwan’s fundamental housing market design and the entrenched interests of developers and investors (TaiwanPlus, 2023).
The Need for a Robust Social Housing System in Taiwan
Taiwan’s social housing system is grossly underdeveloped compared to other advanced countries. Social housing refers to affordable rental housing that is built and managed by the government or non-profit organizations to provide housing for low-income individuals and families. In many European countries, social housing is a significant part of the housing market, and it provides a much-needed safety net for vulnerable populations. In the Netherlands, approximately 30% of housing stock is social housing, while in Austria, it’s around 24%. Singapore, with its government-run Housing Development Board (HDB), has managed to provide affordable housing for over 80% of its population.
In Taiwan, however, social housing makes up less than 5% of the total housing stock, and the government has been slow to build enough units to meet demand. In 2022, there were only around 10,000 units of social housing in operation across the entire country, and most of them are located on the outskirts of cities, far from essential services and transportation hubs. This has resulted in a situation where low-income families are forced to compete for limited and increasingly expensive rental units in the private market, while developers continue to build luxury apartments that are out of reach for most people.
According to a 2016 report by the Taiwan Housing and Urban Development Foundation, Taiwan’s social housing shortage is one of the main contributors to the housing affordability crisis.
The government has set a target of building 200,000 units of social housing by 2024, but this goal remains far off, and the implementation process has been slow. The government’s reluctance to invest in social housing, combined with the lack of effective regulation in the private market, has left Taiwan in a precarious position.
The Need for Systemic Reform: A New Vision for Housing
Taiwan’s housing crisis is not just about skyrocketing prices or rising rents; it is a reflection of deeper systemic issues that need to be addressed.
At its core, Taiwan’s housing market is designed to benefit the wealthy, with little regard for the needs of lower-income groups. Housing has been commodified, treated as a financial asset rather than a basic human need. In order to address the crisis, Taiwan needs to adopt a new vision for housing that prioritizes accessibility, affordability, and social equity.
The government must start by investing in a robust social housing system, ensuring that vulnerable populations have access to affordable housing options. At the same time, stricter regulations should be put in place to curb speculation and reduce the role of property as an investment vehicle. The government should also focus on improving labor conditions in the construction industry, attracting skilled workers, and streamlining the process for foreign laborers to work in Taiwan.
The goal should be to reframe housing as a fundamental right, not a luxury reserved for those who can afford to speculate. The commodification of housing must end, and we must shift toward a model that treats homes as places for people to live, not just assets to be traded. Only then can Taiwan hope to achieve a fairer, more equitable housing system for all.
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