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Editorial: Selling
public land not a solution
The Ministry of Finance¡¦s National Property Bureau is planning to ease the ban
on the sale of public land in Taipei and New Taipei City (·s¥_¥«) by allowing the
sale of plots smaller than 500 ping (1,652m2). While the ministry¡¦s recent
series of measures to utilize national property might boost the national
coffers, the negative consequences could outweigh the positive effects. The
latest proposal is a shortsighted policy that could have disastrous results, and
the government must pull back before it is too late.
Government data show that such a policy change would affect more than 100 plots
of land, covering about 15 hectares in total. The government introduced the ban
in 2010, on the recommendation of the legislature, because house prices in the
two cities were skyrocketing, with real-estate developers driving up prices as
they fought for state-owned land.
However, after a mere two years, the government is considering changing its tune
to improve its finances. Doing so would be a grave mistake.
According to the bureau, the ban on the sale of plots of land smaller than
1,652m2 has not pushed down house prices, which instead have kept climbing. The
ban seems to have had no effect in cooling down prices, and the government is
now thinking of abandoning the policy, cheered on by property developers and
brokers. However, once the ban is relaxed, home prices may shoot up again. As it
is, the government¡¦s land and housing policies appear to be contradictory: While
its stated aim is to drive down home prices, selling public land would only
drive up land prices ¡X and house prices along with them. All attempts to achieve
fairness and justice will collapse.
While selling state-owned land would increase public income and help fill the
deficit, it would be just a drop in the ocean. Historical data show that income
from the sale of public land makes up less than 1 percent of government income.
While the positive effects of such a minuscule sum on the government¡¦s financial
situation would be limited, the negative effects will be huge. The government
has been cutting taxes over the past dozen years because it thought this would
attract more investment. However, not only has investment failed to improve, but
the ministry is once again hoping to solve the fiscal crisis by going about it
the wrong way ¡X by selling state-owned land.
Taipei and New Taipei City cover a relatively small and very densely populated
area, and the main reason home prices are high is because of the limited access
to land for development. Developers say the only way to improve housing supply
is for the government to release more land. However, even if the government
auctions off public land, developers will buy that land at a high cost, building
houses that will still be too expensive for the average person. This will do
nothing to alleviate the demand for housing; instead, it will drive home prices
even higher and create a housing bubble.
If the land is properly used for housing for rent instead of for sale,
communities could be built to provide the young, the elderly and disadvantaged
groups with housing. Not only would that increase government income, it would
also help promote housing justice.
The government is working to improve the economy and government finances. To do
so requires long-term planning and comprehensive consideration of society as a
whole. Short-term solutions to isolated problems will only cause the situation
to deteriorate further.
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