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Taipei's Middle Class Moves Out

It's Springtime in the Suburbs


It's Springtime in the Suburbs

Source:Kuo-Tai Liu

More and more of members of the middle class are joining an exodus from the city, trading a long commute for cheaper home prices. Is the move worth it?



It's Springtime in the Suburbs

By Yi-Shan Chen, Elaine Huang
From CommonWealth Magazine (vol. 403 )

Early every morning, a carefree Professor Chen-Jai Lee, dean of the National Taipei University (NTPU) College of Public Affairs, leaves his front door, and within ten minutes has reached the trailhead leading to Yuan Mountain.

He has begun each day the same way for the past decade. From the bell tower atop Yuan Mountain, it takes him a mere three minutes, by way of his own private short-cuts, to reach the low-altitude broad-leaf forest. "I don't like being in crowded places," he confides. "Here, I feel I'm far away from the city, away from the pressure."

Contrary to the population shift of the 1970s, in which Taiwanese moved into Taipei City in droves, the multitudes are now leaving, in a second wave of suburbanization.

With the advent of national highways and the popularization of personal automobiles, the first wave of suburbanization saw people moving into Sijhih City in Taipei County and Nankan Rural Township in Taoyuan County in the late 1980s. This time, people are moving to second-tier cities within an hour's commute, courtesy of the expanding Taipei Rapid Transit System (TRTS). "The suburbanization rate will only accelerate as the Sinjhuang, Lujhou, Songshan and Neihu TRTS lines commence operation," predicts Honda Appraisers Joint Firm president Alpha Jwo.

From First Tier to Second

According to census records compiled by the Directorate-General of Budget, Accounting, and Statistics (DGBAS), Taipei has seen a steady population outflow since the previous major real estate bubble back in 1989. This means that more people have been moving out of the city than into it every year for the past 20 years. Since real estate prices began rising back in 2003, 50,000 people have moved out of the city.

The opposite is true for Taipei County, which has gained 76,000 residents over the past five years – 13,000 in Lujhou City, 11,000 each in Linkou Rural Township and Sindian City, and smaller numbers in Taishan Rural Township, Sijhih City, Sansia Township, and Danshui Township. (Table 1)

High Housing Prices: the New City Wall

High housing prices have built a wall around the city, keeping out those who cannot afford the cost of living inside. For those who are searching for wide-open spaces, this means leaving town for suburban opportunities.

Benson Liao, president of Yungching Group and Yung-Ching Real Estate, states that the M-shaped structure of Taiwanese society dictates that only those at the top of the "M" will have the means to move into the city, shutting out the middle class.

Three-bedroom second-hand houses in Taipei's Daan District now start at NT$24 million. "What line of work could anyone fresh out of school be in to afford prices like that?" Liao asks. "Only forty-something baby-boomers could possibly afford that."

Yungching's statistics reveal that the average age of buyers for residences in Taipei City rose to 40 in 2007 – a significant increase from the former average of 35. According to calculations by National Chengchi University land economics professor Chang Chin-oh, as of the first quarter of this year, the ratio of real estate costs to annual household income for buyers of Taipei real estate has grown to a historic high of 10-to-1. In other words, to buy a home in Taipei, a buyer and his whole family will not be able to even eat or drink anything for 10 years. "This only reflects the situation for people who've been able to buy a home – many more people couldn't even afford to build a threshold!" Chang exclaims.

Rapid Transit Shortens Commutes for the Masses

Sansia is the perfect example of the transformation of suburbia from remote location to TRTS stop.

In the past, commuters from Sansia would have to carefully time their arrival at a bus stop to board an occasional bus into Yingge Township or Shulin City before transferring to the train. Another method was to take a 90-minute bus ride into Taipei that left every half hour. The TRTS expansion has cut that commute down to under an hour.

A dramatic change in commuting times is also apparent in Shulin City, which relies on the rail-line that runs through town. Dennis Lee, a certified public accountant for Baker & McKenzie, is a native of Yunlin County who moved to Taipei's Shipai District for his career, then to Shulin with his wife 15 years ago.

A Timetable-Free Commute

Dennis Lee admits that Shulin was indeed an extremely inconvenient place to live in the early years. However, that changed with the completion of National Highway No. 3. And since the Eastern Train Line began running, he has never had to wait more than a quarter hour for a northbound train to Taipei, which takes just 18 minutes to reach Taipei Main Station. "The train comes so often now that I never need to look at a timetable," Lee says.

He once drove to work every day, but now he takes a NT$17 train ride, followed by a NT$15 subway ride and a NT$7 bus ride each morning. The commute takes him to his office opposite Taipei's Chang Gung Memorial Hospital in no more than 50 minutes.

The luxury residence he owns in Shulin, which cost NT$160,000 per ping (a unit equivalent to 36 square feet) is one of his most gratifying investments. His large, 50-ping designer home was designed by the same architect that planned Taoyuan City's upscale Zhongyue housing development, where apartments go for NT$300,000 per ping, but he paid only NT$9.5 million for both his home and a parking space. His property stands near a small public park, and the community has a shared 1,500-ping courtyard where he can take a pleasant stroll after dinner. The cost of consumer goods is also low in the area.

Dennis Lee firmly believes that this is a better way to live than shouldering a NT$30 million mortgage for a 60-ping home neighboring Taipei's Daan Forest Park. "I think being a mortgage slave for your whole life is the most ridiculous way to manage your finances," he says, with the incomparable mathematical clarity of an accountant.

Longing for a Living Environment

Aside from economic and transportation factors, suburbanization is a natural development for a mature city.

NTPU professor Chen-Jai Lee observes that Taiwan is no different from other nations with industrialized cities. Industrialization goes hand-in-hand with urbanization, and once centralization reaches a certain threshold, a population will start to return to the suburbs. In the U.S., the ones who move to the suburbs are in fact members of the middle class with secure jobs and stable incomes who are able to arrange their own schedules. With the advent of the information age, knowledge workers are no longer even bound to an office, but can work anywhere with an Internet connection.

Professor Lee is a researcher who can work from home and not go into the city everyday. For NT$120,000 per ping, he bought an 87-ping house, with two rooms for each person in his family of three. "My daughter has taken over an extra bedroom," he says. "Every morning I have to hunt her down, because I'm not sure which room she decided to sleep in."

Professor Lee notes that as a person ages, his or her longing for noise and a crowd are supplanted by a need for peace and stress-free surroundings. As Taiwanese society ages more and more rapidly, the urge for suburbanization will only grow stronger. He, for example, is looking to buy some farmland in the future. Having grown up in the countryside in Miaoli County's Houlong Rural Township, Lee now hopes to sink his roots in a real farm plot.

The Hidden Worries of Suburbanization

Whether forced or voluntary, middle-class suburbanization has exposed a host of problems. A lack of planning in Taipei County's second-tier cities has led to the unchecked construction of dense high-rises and a deterioration of quality in residential environments, casting a pall over the entire process of city expansion.

For example, in the paintings of the late master painter Li Mei-shu, Sansia City was a beautiful and spiritual place, but it has now devolved into a dense cluster of buildings crowded around National Highway No. 3. As a large number of these homes are unoccupied, banks have classified this as a real estate trouble spot. "Many NTPU professors who invested in local real estate over 20 years ago now feel cheated," says Professor Lee.

NTPU associate professor Chien-Wen Peng, who has made an expert study of the Sansia real estate market, believes that the problem stems from an impoverished Taipei County government. Eager to attract developers, they have provided too many incentives for building in bulk, even allowing designated commercial district lands to be converted to residential areas. Greed then propelled developers to build not only out, but up, and now Sansia has more than six 1,000-home high-rise communities. "We know that Taipei is a crowded place to live – why should we have to live like this in the suburbs?" demands Chen-Jai Lee.

"The middle class has been weakened – they are the government's biggest problem," declares geography professor Jinn-Yuh Hsu of National Taiwan University.

Taipei is on the brink of becoming a city of exclusively luxury residences, as the middle class is becoming increasingly less able to afford anything in the city that is not secondhand, if at all. The government's most urgent task is maintaining quality of life for the middle class.

Springtime in the suburbs can be beautiful, if we can keep greed in check.

Translated from the Chinese by Ellen Wieman

Chinese Version: 城外有春天