Taipei had a population of 2.48 million people last year, more than 8 percent below its peak eight years ago. That rate of decline was the third highest of any city or county in Taiwan, after Chiayi and Nantou counties.

Taipei’s population loss is even more stark compared to major cities in East and Southeast Asia. Similar to Taiwan, Singapore, Japan and China are all struggling with low birth rates, but the number of people living in their capital cities – Singapore, Tokyo and Beijing – remains on the rise. 

Only in Taipei and Seoul in South Korea has there been a population decline, and Seoul’s decline can partly be explained. A new administrative capital, Sejong City, was built in the central part of South Korea to ease congestion in Seoul, leading to an outflow of people. Even so, the Korean capital’s population has only declined 6.8 percent over the past 10 years, less than Taipei’s. 

Taipei’s population decline reflects more the high cost of living in the city, especially its expensive real estate that does not always offer premium value.  

The unaffordable Taipei dream

“Taipei is basically an upscale slum,” said Hsieh Hung-ming (謝鴻銘) the president of the Taiwan Horticultural Well-being Association (台灣園藝福祉推廣協會), who lived in an alley off Dunhua South Road in Taipei for more than 40 years. Now, the entrances and top floors of whole rows of buildings are illegal, he complained.

“The alleys are narrow, dirty, and messy. Even on the fourth floor you find rats and cockroaches. Wouldn’t you call that a slum?” Hsieh said.   

Even though Hsieh’s apartment building was in a prime location featuring high housing prices, the corresponding quality of life failed to live up to the area’s high price tag. Two years ago, Hsieh decided to sell his apartment and move to the Taipei suburb of Luzhou in neighboring New Taipei, where his new place faced a 400-hectare park.

“Taipei has everything, other than decent living spaces,” said Wang Chun-hsiung (王俊雄), an associate professor of architecture at Shih Chien University. 

He said that when friends of his visit Taipei from abroad, they all ask why people in Taipei, who are relatively affluent, are willing to accept expensive, subpar housing.

“Our city services and facilities are really good. What we’re missing is an affordable housing environment,” Wang said.

Long-time residents fed up with the situation choose to move out. Anyone interested in living in the center of power and culture who wants to settle in Taipei must first survive the sticker shock of available residential units.

According to realtor Evertrust Rehouse Co. statistics, Taipei units that had been built within the previous five years sold for NT$980,000 per ping (about US$9,885 per square meter) in 2022, and the average unit sold measured 52 pings (about 172 square meters or 1,872 square feet). In other words, a new apartment in Taipei costs NT$50 million on average, with a mortgage of about NT$140,000 a month, well beyond the means of most young adults.

Day-night population gap of 720,000                    

The outflow of people from Taipei has only exacerbated the congestion of all forms of transportation, especially during morning and evening rush hours. It has also meant that New Taipei has become a “bed city” where Taipei’s office workers sleep.

At the end of 2020, the Ministry of the Interior estimated that 720,000 people flocked into Taipei to work every day and returned home at night, the biggest day-night population gap of any city or county in Taiwan.

Even then, Taipei’s night-time population is 180,000 people higher than the number of people whose households are registered in Taipei, consisting of renters who are not allowed to vote in the city (In Taiwan, people must vote where their households are registered).

Huang Li-ling, an associate professor in National Taiwan University’s Graduate Institute of Building and Planning, questioned how such a large group of people with housing concerns could remain creative and innovative on the job, and she suggested that Taipei’s unstable population structure was a major challenge for the city.

Lin Chung-chieh, the former commissioner of Taipei’s Department of Economic Development and Department of Urban Development, agreed, calling the ongoing outflow of people a warning signal.

“Taipei should attract outstanding entrepreneurs and talent to the city if it wants its residents to feel they have plenty of opportunities,” Lin said.

Taipei’s population shrinking… and old

As of the end of 2022, one out of every five people with households registered in Taipei were 65 or older, a ratio higher than all other cities and counties in Taiwan except for Chiayi County and the city of Keelung.  

“Taipei has not had an overall development strategy for the past 20 years,” said Peng Yang-kai, the secretary-general of the Organization of Urban Re-s (OURs). Successive Taipei mayors have only thought about development, but have not thought about urban development, lacking policies to address aging and low birth rates.

Urban planning in Taipei has made little progress over time, and while urban renewal policies have generally not been effective, they have resulted in spiraling housing prices, experts said.

Urban renewal: Triggering greed

Taiwan’s Urban Renewal Act was passed in 1998. In the 25 years since, 539 projects have been approved for buildings to be torn down and rebuilt, but only 225 projects have been completed, fewer than 10 per year.

The head of Taipei’s Urban Regeneration Office, Chen Jian-hua (陳建華), said the Urban Renewal Act originally targeted dilapidated structures that could not be renovated. The government would first demarcate the area affected and then provide construction companies and households with floor area ratio incentives to give them newer, safer homes. 

The incentives were designed to allow contractors to build structures with substantially more floor space in place of the previous structure on a particular lot, and then sell the additional units to cover the cost of the rebuild. Special incentives were also given to upgrade public spaces around the revamped properties. 

It was essentially framed as a public welfare policy, Chen said.

But when former Taipei Mayor Hau Lung-bin declared a policy of “swapping a ping for a ping” (households getting the same floor space in the new building as in their old dwelling), Taipei residents came to expect that they could get a brand new home cost free. 

Under this plan, given their construction costs and financing risks, construction companies felt they could only turn a profit on urban renewal projects in areas where they could resell the additional units built at the highest prices.

As a result, the section of Taipei most in need of urban renewal, Wanhua District, with 16,000 households in buildings that are 50 years or older, has only registered 31 urban renewal projects to date, the fewest of any of Taipei’s 12 districts. 

Conversely, Da’an District and Zhongshan District, which are both known for their high housing prices, have had the highest number of urban renewal projects.

Chang Hsin-min (張欣民), who runs a real estate company, said coordinating and executing urban renewal projects is extremely time consuming, with projects often taking 10 years or more to complete, and construction companies have to tie up a sizable amount of capital.

“The higher the risk, the bigger the profit has to be. That’s a type of risk control,” Chang said.

As the concept has evolved, urban renewal has been a driver of higher housing prices, argued OURs official Peng, who was critical of the process.

“The government’s constant pushing of urban renewal for old apartment buildings created expectations that turned old buildings into investment vehicles,” he said.

“Urban renewal led to speculation that sent housing prices higher, which then led to social housing policies and rent subsidies because there was never a core concept for urban renewal. [Governments] only wanted to please voters.” 

Thus, a new well-meaning policy intended to incentivize residents to participate in urban renewal eventually evolved into a high barrier for Taipei residents to scale.

Peng believes the government’s use of floor area ratio incentives in all districts of the city and the deeply ingrained concept of spending nothing for a new home has exacerbated housing issues.

“Everybody anticipates that housing prices will rise, because otherwise urban renewal cannot continue. That has become a structural problem,” he said.

Housing experts have suggested three solutions to these problems.

Solution 1: Using urban renewal to attract talent to Taipei

Despite the obstacles noted above, Taipei does have successful urban renewal cases, and the common thread seems to be the engagement of several city agencies.

In 2015, Taipei launched a publicly led urban renewal plan. Former deputy mayor Charles Lin (林欽榮) and former Urban Development Department chief Lin Jou-min promoted the program together and decided on a third phase urban renewal project in Siwen Ward in Zhongshan District to test it. The Urban Regeneration Office took control of the initiative, and every household was consulted.

The key to the project was cooperation among city departments. The Department of Social Welfare was responsible for checking with residents about continuity issues and assisting vulnerable individuals. The Urban Development Department searched for public housing or the rental market in advance for places building residents could live during the construction phase. The Department of Health set up a work station in Siwen Ward to provide community health care.

After eight long years, the Siwen Ward project was finally completed in 2022, giving the 198 households that originally lived there a new home.

But architect Wu Sheng-ming (吳聲明) feels that was not good enough. He said that while in Japan and Singapore, urban renewal projects are the responsibility of the government, Taipei has promoted such projects for 25 years with only the Siwen Ward building to show for it. “Isn’t that totally absurd?” he wondered.

“Urban renewal should enable outstanding talent to become ‘Taipeiers’ just like New Yorkers or Londoners,” he said. In contrast, however, younger people studying in Taipei have to return to the places where they grew up by the age of 30 because they could not afford housing.

“We have not allowed for ‘New Taipeiers’ the opportunity to settle in the city,” he said.

Since taking over as the new mayor of Taipei at the end of 2022, Chiang Wan-an (蔣萬安) has sought to expedite urban renewal projects. He has lowered the threshold for agreement to pursue urban renewal to 75 percent of a building or complex’s residents, which increases to 90 percent who have to agree with the formal proposal for incentives put forth by the urban regeneration office and 90 percent who have to agree with the selection of a simulated design for the new building. 

If a small minority still does not agree, “the government will carry out the demolition of the old building. That is the last mile of urban renewal,” said Wang Yu-fen (王玉芬), who currently heads Taipei’s Department of Urban Development.

Industry insiders believe, however, that holdouts opposing the demolition and rebuilding of their apartment building will not suddenly change their minds because the thresholds for proceeding with an urban renewal program have been lowered. The key, they say, will remain the government’s boldness and credibility in exercising and integrating public authority.

"We never thought the 'old Taipei' could be pretty, but it has its potential," Architect Wu Sheng-ming (吳聲明) said.

Solution No. 2: Alternatives to demolition, rebuilding

Regardless of whether the central or local government sets the rules of the game, real estate insider Chang believes they both should devise policies that guide the thinking of the market and local residents. Housing should not be framed as a financial commodity, he argued, but as the key to personal safety.

The most urgent priority, Chang said, was to conduct a complete check of the health of old residential buildings, with a particular emphasis on whether the structures have any safety concerns.

“Other than complete rebuilds, you can also try maintenance by strengthening the building’s ability to withstand earthquakes,” he said, stressing that demolishing and rebuilding old structures was not the only urban renewal option.

Taipei needs the government to come forward and coordinate with the private sector in establishing a vision for future development.

Shigeru Ito, a professor of urban engineering at Tokyo University and renowned expert in urban planning, said in a recent interview that governments should establish coordination mechanisms with private enterprises and local residents to help cities strengthen their international competitiveness.  

In Japan, before an urban renewal initiative is formally launched, the local government or district office takes five to 10 years to get households potentially affected by urban renewal plans to participate in seminars to build consensus over the government’s urban regeneration plan, giving them a say in how it proceeds. 

Solution No. 3: Back to basics, find what makes Taipei special

National Taiwan University’s Huang said urban renewal initiatives need to remember that mainstream tourism culture has changed. Tourists, she said, are less interested today in shiny, even glamorous city scapes. “A city’s special characteristics are now more important.”

Chifeng Street once was a old neighborhood with 50% empty house rate. 

That is most evident around Chifeng Street (赤峰街) near the Zhongshan commercial district. Once known for its many metal-working and scrap metal shops, it was an old community with more than 50 percent of its residential units vacant. 

Ward chief Chen Jing-yun improved the neighborhood’s drainage system and brought in artists to colorfully decorate local walls, encouraging young people who had grown up there to return. Today, the community is full of hip, edgy stores.

Taipei unquestionably needs urban renewal, but beyond rebuilding old edifices or giving them a facelift, much more needs to be done, such as strengthening the functions of communities and giving residents a feeling of pride, so that urban renewal initiatives can better meet future needs.  

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Translated by Luke Sabatier
Edited by TC Lin
Uploaded by Ian Huang