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One Taichung, Two Worlds

Who Profits from Perpetual Urban Development?

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Who Profits from Perpetual Urban Development?

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In stark contrast to the opulence of Taichung's newly developed Zone Seven, the city's dilapidated and empty central district is like another world. The alliance of government and commerce has become a zero-risk game of wealth redistribution.

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Who Profits from Perpetual Urban Development?

By Yi-Shan Chen, Ming-ju Hsieh
From CommonWealth Magazine (vol. 452 )

This October the Taichung city government is slated to move from a historical building in Taichung's old city district to a new home in the Phase Seven Urban Development Zone (Zone Seven). Basking in the glow of constantly escalating real estate prices in Zone Seven, Taichung has come to life.

"You can't compare a young lady with an old geezer!" So laments Chen-Hsiang Ho, old commercial district representative and head of the Dafeng Flour Factory.

First Square Falls Behind

Taichung's old administrative Central District was the first example of urban planning in Taiwan, with a straight checkerboard street arrangement and public market area with a distinctive Japanese feel. The downtown area's First Square and its five department stores were once an indelible part of the memories of young military recruits attending basic training at Chenggong Hill boot camp outside the city.

At some point along the way, First Square became the main stomping grounds of the area's foreign laborers. In the commercial district where the popular Ji Guang Delicious Fried Chicken franchise got its start, half the shops are locked behind iron doors on a Thursday night, and most of the ones remaining open cater to foreign laborers. Shen Su-yu, chief of the Central District's Gongyuan Ward, relates that while each block in her area has about 50 housing units, only around 20 are presently occupied. The rental occupancy rate of the average office building in her ward is only 40 percent, and the apartments in the smaller lanes are practically empty.

It cannot be said that Taichung mayors from both the Democratic Progressive Party and Kuomintang, as well as residents of the old commercial district, have made no efforts. Chen-Hsiang Ho's shop, situated catty-corner from the main branch of the Chang Hwa Bank, once held the distinction of being the city's most valuable property, and his Mystore Bakery enjoyed tremendous popularity. In an effort to boost Central District prosperity, Chen-Hsiang Ho not only organized and funded a Mid-Autumn Festival event out of his own pocket, but even bought a Mercedes Benz and parked it in front of Chang Hwa Bank to promote a raffle, losing NT$3 million.

"I haven't given up; it's just that it's out of my power," he relates. "Taichung has become such a vast area. Friends try to get me to think of it this way: I profited in the Central District for so long, and now it's time for someone else to do well."

"The Central District has declined so rapidly. New things are coming in too slowly, while the old things are fading too fast." Wang Ta-li, Associate Professor at Feng Chia University's Department of Urban Planning and Spatial Information, believes that while cities have their own "metabolism" that replaces the old with the new, Taichung's urban expansion has far outpaced the rate at which the city has updated.

Taichung's overnight urban expansion has been intense. Prior to the tenure of Mayor Tseng Wen-po in 1981, municipal Taichung occupied just 57.4 hectares. However, after eight urban development programs under Tseng and successor Lin Po-jung, the city expanded by 1754.2 hectares, growing 30 times over.

From retaining a considerable amount of agricultural land, Taichung suddenly turned into a concrete jungle. Land rezoning, thought of as cost-free by local government leaders, is a good way to curry favor with new landowners, political factions, and commercial developers. But as a city grows larger, the government must spend increasingly larger amounts of public money on such services as schools and police. And when high rises are built on agricultural land, there is no turning back, raising the cost of "greening" and environmental protection efforts. If the government's proportionate income does not grow enough, the new downtown will be unable to afford keeping the old downtown aboard.

"The price of land is determined by the market mechanism. If infrastructure development is only good in one area, of course the prices will be high," says Ms. Zhang Lili, president of Treasure Dragon Corporation, offering a developer's perspective. "And if even the Taichung city government has moved to the Western District, why would we want to go back to the old neighborhood?"

The city's expansion has rapidly taken Taichung's real estate supply from a shortfall to a surfeit. Research conducted by Associate Professor Liu Yao-hua of the Feng Chia University Department of Urban Planning and Spatial Information, indicates that the ratio of residential housing units to households rose from 0.92 to 1.27 between 1980 and 2000.

If it is already enough for everyone, then why is it necessary to continue with urban development plans? In an exclusive interview with CommonWealth Magazine, Taichung mayor Jason Hu said that a moratorium on development following an urban rezoning program 20 years ago unfairly hurt the interests of landholders, so efforts were made to lift the ban.

Development and Rezoning: Vital Revenue Generators

Besides currying favor with the public, it has additional benefits for the Taichung city government. Since the 1980s, development of rezoned city districts has become a major source of income for the city. Nearly all of the Taichung city government's dozen urban rezoning projects have made money. In the Phase Seven Urban Development Project – the most profitable of them all – sales of land alone generated revenues of NT$9.45 billion, and after subtracting development costs, it still produced net profits of NT$5.2 billion.

Responding to accusations that the city has expanded too rapidly given the decline of the old district, Jason Hu believes the market mechanism will sort things out, suggesting that government planning cannot just look at projected urban growth. Mayor Hu does not believe in conducting city development based on projected figures, but favors an international competition approach. "According to scholars, we in Taichung don't need development," he stresses, noting that he has expended considerable efforts to revive the central district. He adds that since land holders in the downtown district are wealthy and not anxious to lease or sell their properties, it is more difficult to integrate the area into a coherent plan.

Huang Ching-sheng, director of the Litou Dian Local Culture Association, a group with a long record of working to save old trees, historical landmarks and culture, opines that what Taichung most needs at this time is not relentless expansion but deeper cultivation of fine local culture, which would include the revival of the city's central district. "For a city to make progress, culture must lead the way."

Translated from the Chinese by David Toman

Keywords:

好友人數