TAIPEI (Taiwan News) — Disagreements between property owners, the government, and construction companies combined with policy issues are slowing the progress of urban renewal in Taiwan.

By the end of April, 2,828 planned urban renewal projects had been submitted to the Taipei Urban Renewal Office, and the total number of project applications reached a new high in 2023. The office reported increased interest following the earthquakes in April and after increased publicity efforts.

However, despite the increase, only 40% of submissions have been approved by Taipei’s Urban Renewal Office.

Former professor at National Chengchi University’s Department of Land Economics Chang Chin-oh (張金鶚) said he believes the slow pace of progress is being caused by all parties hoping to get more benefits from the process.

In a recent interview with Business Today, Chang, who also served as Taipei’s deputy mayor starting in 2013, said over the past ten years there have been more successful urban renewal projects than before, but progress is still slower than expected.

Chin said mistrust between residents and builders, and among residents themselves, combined with a poor general understanding of the urban renewal process, is responsible for the slower pace.

These problems are exemplified by the case of the Hsin-lung Apartments, close to Taipei 101. The Hsin-lung Apartments sit on prime office real estate and are valued at a per-square meter price of NT$1.3 million (US$39,973), but they are old and run down.

Residents of the apartments said they had been approached by a construction company with an urban renewal plan as far back as 2019. They say Sunty Development offered them plans to redevelop the housing block and provide them with a square meter for square meter replacement of their existing apartment.

“Everyone welcomed Sunty Development as a savior in the early days,” Borough Chief Giwas Gigo (吉娃斯吉果) said. However, when Gigo and her husband followed up on the offer in 2022, she said Sunty Development denied the offer was ever made.

Gigo said there are still about 150 households in her apartment block whose negotiations with the developers have stalled. She said residents are not holding out unreasonably: “We are all kind-hearted people, we just want to retain what we have now.”

Sunty Development said that as of June, it had obtained consent from 60% of the Hsin-lung residents for the urban renewal project. It sent the plan to the Taipei City Urban Renewal Review Committee, and it is currently revising the preliminary recommendations it was given.

Jiayuan Group is a construction company that has worked on urban renewal projects, and its chair, Tsai Hsi-chuan (蔡錫全), said he frequently has plans for redevelopment returned by landlords. He said in many apartment blocks slated for redevelopment, the number of residents that have approved plans has stalled at around 50%.

Taipei Urban Renewal Office Chief Secretary Hsieh Ming-tung (謝明同) said that given the increase in construction costs and the price of land, there is no way to offer residents square meter for square meter replacements. He said that in the past, remuneration had been offered by the office as compensation for the smaller floor areas of some redeveloped apartments.

However, Hsieh said these “volume bonuses” can be a gift and a curse. He said one issue is that it makes it easier for residents to compare their property values with one another, leading to drawn-out negotiations.

Real estate expert and professor at Taipei University Peng Chen-wen (彭建文) echoed Hsieh’s sentiment and said that urban renewal has become dependent on economic incentives in recent years. He said that in the long term, this has fostered greed among owners of homes targeted for renewal.

Peng said he is pessimistic about the future of urban renewal in Taiwan. He said the main reason is that Taiwan’s high population density means property rights are complicated, and the absence of management committees in many apartment buildings has resulted in a large number of illegal add-ons.

This means in many cases the true size of the property is larger than the legal size. Owners will be concerned that if their building is redeveloped, they will end up with much smaller houses, Peng said.

Chang said that urban renewal policies must include both “carrots and sticks.” He proposed that the government pass legislation requiring “health inspections” for buildings when they reach a certain age, the cost of which would be borne by the owner.  

Chang also said that the government should train urban planners to go into old communities to explain the complex nature and importance of urban renewal when proposals are in their early stages. He also said consultation mechanisms should be more transparent so that the government can better negotiate with residents and builders.

Legal procedures could also be put in place to require urban renewal processes to move forward once a certain number of residents agree, Chang said. He said that if proposals need to be forced through, there will be a corresponding legal process.