Who Can Afford to Live in Taipei?

Taipei was once a place where young adults chased their dreams. But today the city’s population has aged, and 25 years of urban renewal initiatives have led to spiraling housing prices and an outflow of people. What can be done to revitalize the city?


Last year Taipei’s population declined to 2.48 million, more than 8% below its peak eight years ago. Its population decline rate was the third-highest among all cities and counties in Taiwan, following 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 capitals remains on the rise. Of all capitals in the region, only Taipei and Seoul have recorded a population decline. Seoul’s decline can be explained in part by the construction of a new administrative capital, Sejong City, which was built in the central part of South Korea to ease congestion in Seoul. Even so, the Korean capital’s population has only declined by 6.8% over the past 10 years.  

Taipei’s population decline reflects the high cost of living in the city, especially its expensive real estate, which doesn’t always translate into premium value.  

“Taipei is basically an upscale slum,” says Hsieh Hung-ming, president of the Taiwan Horticultural Well-being Association, who lived in an alley off Dunhua South Road in Taipei for more than 40 years. Now, whole rows of buildings have been extended with illegally built entrances and top floors, he complains. “The alleys are narrow, dirty, and messy. Even on the fourth floor, you find rats and cockroaches. Wouldn’t you call that a slum?”  

“We never thought the ‘old Taipei’ could be pretty, but it has its potential,” says architect Wu Sheng-ming.

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

“Taipei has everything other than decent living spaces,” says Wang Chun-hsiung, an associate professor of architecture at Shih Chien University. He notes that when friends of his visit Taipei from abroad, they all ask why Taipeiers, who are relatively affluent, are willing to accept such expensive, subpar housing. “Our city services and facilities are really good. What we’re missing is an affordable housing environment.” 

According to statistics from realtor Evertrust Rehouse Co., 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). In other words, a new apartment in Taipei costs NT$50 million on average, with a mortgage of about NT$140,000 per month – well beyond the means of most young adults. 

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 turned New Taipei into 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 to Taipei to work every day and returned home at night. Even with this outflow, Taipei’s night-time population exceeds the number of people whose households are registered in the city by 180,000 individuals, which includes renters who are not allowed to vote in Taipei. (Taiwan requires voters to cast their ballots in the county where they are registered.) 

Huang Li-ling, an associate professor at National Taiwan University’s (NTU) Graduate Institute of Building and Planning, questions how such a large group of people with housing concerns could remain creative and innovative in their jobs. She suggests that Taipei’s unstable population structure is a major challenge for the city. 

Lin Chung-chieh, the former commissioner of Taipei’s Department of Economic Development and Department of Urban Development, agrees, 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 says. 

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

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

Unintended effects 

Urban planning in Taipei has made little progress over time, and while urban renewal policies have generally been ineffective, they have resulted in spiraling housing prices, experts say. Since Taiwan’s Urban Renewal Act was passed in 1998, a total of 539 projects for the demolition and reconstruction of buildings have been approved. However, only 225 of those projects – less than 10 per year – have been completed. 

Chen Jian-hua, head of Taipei’s Urban Regeneration Office, says 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.  

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 says. 

But when former Taipei Mayor Hau Lung-bin declared a policy of “swapping a ping for a ping” (granting households 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 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 high 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 and Zhongshan districts, both known for their steep housing prices, have had the highest number of urban renewal projects. 

Real estate company owner Chang Hsin-min says coordinating and executing urban renewal projects is extremely time-consuming, often taking 10 years or more to complete. Additionally, construction companies must tie up a considerable amount of capital to undertake such projects. “The higher the risk, the bigger the profit has to be,” Chang says. “That’s a type of risk control.”  

As the concept has evolved, urban renewal has been a driver of rising housing prices, argues OURs’ Peng. “The government’s constant pushing of urban renewal for old apartment buildings created expectations that turned old buildings into investment vehicles,” he says. “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 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,” he says. “That has become a structural problem.” 

Building on success 

Despite many obstacles, Taipei does have successful urban renewal cases to showcase. The common thread among these seems to be the engagement of several city agencies. In 2015, as Taipei launched a publicly led urban renewal plan, former Deputy Mayor Charles Lin and former Department of Urban Development Chief Lin Jou-min promoted the program together. The pair decided on a third phase urban renewal project in Siwen Ward in Zhongshan District to test the plan. The Urban Regeneration Office took control of the initiative, and every household was consulted. 

The Department of Social Welfare was responsible for checking continuity issues with residents and assisting vulnerable individuals. The Department of Urban Development searched public housing and the rental market in advance for places where residents could live during the construction phase. The Department of Health set up a workstation in Siwen Ward to provide community healthcare. The Siwen Ward project was completed in 2022, providing the 198 households that originally lived there with a new home. 

But architect Wu Sheng-ming says that was not good enough. He notes that while governments in Japan and Singapore have successfully shouldered the responsibility of urban renewal projects, Taipei has promoted such projects for 25 years with only the Siwen Ward building to show for it.  

“Isn’t that totally absurd?” he asks. “Urban renewal should enable outstanding talent to become ‘Taipeiers’ just like New Yorkers or Londoners.” Instead, younger people studying in Taipei are forced to return to their childhood homes by the age of 30 because they can’t afford housing. “We have not allowed for ‘New Taipeiers’ the opportunity to settle in the city,” Wu says. 

Since taking over as the new Mayor of Taipei at the end of 2022, Chiang Wan-an has sought to expedite urban renewal projects. He has lowered the threshold for agreement to pursue urban renewal to 75% of a building or complex’s residents. The threshold increases to 90% for residents who must agree with the formal proposal for incentives put forth by the urban regeneration office. Another 90% must agree with the selection of a simulated design for the new building. 

But industry insiders believe 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, remains the government’s boldness and credibility in exercising and integrating public authority. 

Regardless of whether it’s the central or local government setting the rules of the game, real estate insider Chang says policies that guide market thinking and local residents should be devised. Housing should not be framed as a financial commodity, he argues, but as the key to personal safety. Chang continues that the most urgent priority is to conduct a complete check of the health of old residential buildings, with a particular emphasis on safety concerns. 

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

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

Before an urban renewal initiative is formally launched in Japan, the local government or district office takes between five and ten years to convince households potentially affected by urban renewal plans to participate in seminars building consensus over the government’s urban regeneration plan.  

NTU’s Huang says urban renewal initiatives need to remember that mainstream tourism culture has changed. Tourists, she says, are less interested today in shiny, glamorous cityscapes. “A city’s special characteristics are now more important.” 

That is most evident around Chifeng Street, located near the Zhongshan commercial district. Once known for its many metalworking and scrap metal shops, Chifeng housed an old community with more than 50% of residential units vacant. But after its ward chief, Chen Jing-yun, improved the neighborhood’s drainage system and brought in artists to colorfully decorate local walls, young people who had grown up there were encouraged to return. Today the community is full of hip, edgy stores. 

Taipei is unquestionably in need of urban renewal beyond rebuilding or refurbishing old edifices. Necessary efforts include strengthening the functions of communities and giving residents a feeling of pride.

This article first appeared in CommonWealth Magazine in April 2023. It has been reprinted, with editing and updating, with permission from the publisher. Translation from the original Chinese was done for CommonWealth by Luke Sabatier.