“Housing Prices Never Fall”: The Development of Housing Finance in Taiwan

ABSTRACT

This article deals with the path-dependent features of financialization of housing in Taiwan, an East Asian developmental state. The levels of foreign capital and securitization in Taiwan’s housing market remain relatively low, meaning domestic capital, of which there is an abundance, is the major financial source of such speculation. The process does not include the retrenchment of the welfare state, because Taiwan has been a homeowner society. After financial liberalization in the 1980s, Taiwan’s state intervention in the housing and financial sectors has actually intensified via the enactment of more regulations to decrease the role of the informal financial and housing sectors. As a result of neoliberalization giving precedence to market mechanisms, various low-interest mortgage programs in the 1990s, all subsidized by public funding, have increased the rate of homeownership and sustained housing prices. Even though this varied the development of housing financialization, housing in Taiwan has largely become a tool of speculation, and housing affordability has become a serious problem.

KEYWORDS:

• Taiwan
• developmental state
• financialization
• informal sector
• neoliberalization

Acknowledgments

I thank the guest editors and anonymous reviewers for their helpful and inspiring comments that improved the argument of the article significantly. I also express thanks for the discussions with colleagues in the Social Housing Advocacy Consortium in Taiwan, and the comments from Zong-Rong Lee, Thung-Hong Lin, Li-Hsuan Cheng, Hyun Bang Shin, Richard Ronald, and Jeroen Van Der Veer.

Disclosure Statement

No potential conflict of interest was reported by the author.

Additional information

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Yi-Ling Chen

Yi-Ling Chen is an associate professor in the School of Politics, Public Affairs, and International Studies at the University of Wyoming. She is interested in the interaction of urban planning and social change, focusing on urban social movements, particularly those concerning housing access. She has published several journal articles and book chapters on housing, gender, urban movements, and regional development in Taiwan. She recently edited a book, Neoliberal Urbanism, Contested Cities, and Housing in Asia (Palgrave MacMillan), and is currently working on a comparative study of the formation of social rental housing in East Asia, Europe, and the United States.