From Opportunism and Bigotry to Housing Justice
United Daily News editorial (Taipei, Taiwan, ROC)
April 19, 2011
The legislature swiftly passed the luxury tax. The Executive Yuan may begin levying the tax in advance, on June 1. What is the significance of the luxury tax? It may help prevent soaring housing prices. It also represents an important event in our political evolution. The government must assist the underprivileged and the middle class. Only then can we promote social equality and social justice.
In the past, when government authorities dealt with housing prices, they used the free market as an excuse. They said they could not interfere. They used the free market as an excuse for inaction. But limited land and housing have been the monopoly of a handful of consortiums. They, along with capitalists and opportunists have kited housing prices. Housing has become a luxury that salaried workers cannot afford. It has became a hurdle younger people struggle against but cannot overcome. Such abuses in the housing market are intolerable. And that is why President Ma promised to promote "housing justice."
Consider the recent legislative process. Everyone expected powerful interference from vested interests. But it never happened. Both ruling and opposition legislators knew that sky high housing prices were a problem. They knew that the public shared a deep distaste for housing speculators. Interestingly enough, the luxury tax was merely an anti-speculation trial balloon. Yet it significantly inhibited housing market transactions. That shows just how rampant speculation in the housing market was. To achieve housing justice, the authorities have numerous policy instruments at their disposal. Reforms must be implemented. Trading prices must be determined by the tax system and by transaction prices. Real estate prices must be rationalized.
For example, the luxury tax does not apply to pre-sold housing units. That constitutes a giant loophole. Government financial agencies can expand their inventory of transaction records. They can target the proceeds from such transactions. But if the results are ineffective, speculators will continue to exploit such loopholes to turn a profit. Legislators should amend the law to include pre-sold housing units. Also, the land price quotation system is extremely unreasonable. Prices quoted are far below the actual market price. This leads to serious inaccuracies in the calculation of land values. In particular, land speculation allows consortiums to enjoy windfall profits. They are not required to give anything back to the community. The system must be changed. We must revive the spirit of Sun Yat-sen, who insisted that "profits must acrue to the public."
So-called housing justice is easier said than done, This is not the job of the government alone. Social consensus and community participation are required as well. For example Taipei City is promoting "social housing." Plans for both luxury condos in the city center and residential units in the suburbs of Mucha have met with strong opposition from local residents. They oppose construction in their neighborhoods. This may be the result of inappropriate choices in building location. They may be the result of the city government's inability to communicate and coordinate. But it also reflects public rejection and public mistrust of social housing. People feel that social housing will reduce market values and living standards in their community.
This "not in my backyard" mentality has a long history. But solutions are possible. More importantly, the government must come up with a persuasive scheme for the construction and management of social housing. It must win community support. Members of the public must also open their hearts. They must set aside class prejudices. They must not discriminate between the rich and the poor. They must welcome neighbors living under different housing regimes. Only a non-discriminatory atmosphere can establish community spirit and achieve the ultimate goal of housing justice.
Frequent fliers who shuttle back and forth between Taiwan, the Mainland, and Hong Kong, and those with cosmopolitan backgrounds, know that class divisions are less clearcut on Taiwan, and that Taiwan society is comparatively egalitarian. This is an achievement we should be proud of. But in recent years, imbalances in industrial development, the existence of a mercantilistic tax system, and runaway housing speculation have gradually undermined this hard won equality. That is deeply worrisome. The government has now introduced a luxury tax. The luxury tax will help crack down on speculation and stabilize prices. It also amounts to a declaration that the government intends to "care for the underprivileged." This trend, from "wealthy," to "egalitarian," should continue.
The luxury tax is merely one small step in the direction of housing justice. But it is one giant leap for social justice. Its passage shows that the government has a positive role to play in policy formulation. The luxury tax is not enough. Speculators should forget about short-term speculation. They will need to find other investments. Building contractors will need to create more appropriate housing for people to live in. They must not be wildly extravagant and expensive. The public must understand what it means not to have a home of one's own, and to commute long distances each and every day. Please give social housing a chance. Do not look down your noses at your new neighbors.