EDITORIAL: Money alone cannot solve housing problems

Housing prices have skyrocketed in recent years, driving demand for rentals skyrocketing as more people give up on buying a home. Meanwhile, vulnerable tenants are facing increasing financial pressure amid the COVID-19 pandemic and rising inflation, and some landlords have started raising rents, taking advantage of interest rate hikes. from the central bank and the rise in electricity prices.

To address the problem, the government on July 1 launched an expanded program of housing subsidies to ease the financial burden on tenants and provide landlords with tax relief for renting to disadvantaged groups and people on housing subsidies. As of Friday, nearly 190,000 households had applied for the scheme, the Interior Ministry said. Eligible households can receive grants starting at NT$2,000 ($67.15) per month, and the government will make the first payments in October, the ministry said.

The grant, a four-year program with an annual budget of NT$30 billion, is open to applicants who earn no more than three times the basic living expenses in their region, which the Executive Yuan says would benefit to about 500,000 households. At a press conference on June 30, the Cabinet presented the program as the largest grant program of its kind in the country. He also said the government had relaxed eligibility rules, with a simple and easy application process, adding that landlords would also benefit from retaining tenants.

The Cabinet also launched a program offering low-income students renting off-campus accommodation a subsidy of NT$2,400-3,600 per month starting in September.

As the pandemic lingers and inflationary pressure increases, the government’s new measures are timely relief for the economically disadvantaged. Economic data released last week shows the consumer price index rose 3.59% year-on-year last month, its highest level in 14 years and the fourth consecutive month it has remained above by 3%.

It remains to be seen how effective the new subsidies will be and how many landlords will be willing to cooperate. Some landlords might persuade their tenants not to apply for the program for fear it will reveal their underreported income, giving authorities an opening to claim unpaid taxes.

The Department of Finance said the National Tax Authority would not proactively investigate landlords’ past rental income, even after tenant grant applications were approved. While such a commitment offers landlords a short-term break, the government is allowing a major problem in the national rental market to persist – under-reporting of income by landlords. Indeed, the rental market is neither balanced nor transparent, with landlords taking precedence over tenants. Some landlords have even tried to evade tax by asking tenants not to file rent declarations or to use the property for household registration purposes.

Government plans to extend housing subsidies are welcome and are likely to have a significant effect on low-income households and disadvantaged groups, but it would be better if the government seriously tackled the problems plaguing the rental market with long-term solutions. He should push for a system of registering real prices in the rental market and apply Consumer Protection Act (消費者保護法) regulations to rental contracts rather than just throwing money away. in short-term solutions. Housing subsidies relieve the needy, but they are not a cure.

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