y of the Interior to ease construction regulations, relaxing floor-area ratio restrictions in a bid to help accelerate urban development and rejuvenation. Under the proposal, the incentive floor area ratio will be set at two times the legal floor-area ratio of 3.0, from the existing 1.5 times. The floor-area ratio is the ratio of the total floor area of a building to the size of the plot of land at that location.
In other words, based on the legal floor-area ratio of 3.0, total floor area of buildings will be allowed to reach 300 pings (one ping= 36 square feet) on a 100-ping land plot. But as an incentive to encourage construction of buildings, the real total floor area, in this case, would be doubled to 600 pings under the relaxation proposal, up from 450 pings if based on existing rules.
Accordingly, the easing rules will allow builders and developers to increase the total floor area of buildings to twice the gross area of the plot on which they are constructed.
It was also decided that the Ministry of the Interior and the Council for Economic Planning and Develop will set up a state-owned urban rejuvenation organization, which in turn will cooperate with private companies, and perhaps provide funds, to implement projects to rejuvenate urban areas around the country.
Cabinet officials said that after the floor-area ratio restriction is eased, at least 200 development projects are expected to be proposed in the next five years, likely to create real estate market values of at least NT$1 trillion (US$30.77 billion) with each project valued at NT$5 billion and generate overall economic benefits of over NT$2 trillion.
The officials said Taiwan will emulate Japan in choosing certain locations, including areas surrounding selected high-speed railways and stations, mass rapid transit lines and stations, riverbank areas, areas adjacent to harbors and ports, as well as old residential communities, to speed up urban rejuvenation.
In addition, the government will also have businesses concerned with energy-saving measures, “green construction” and barrier-free construction, in the new program to allow more people and companies to contribute toward urban rejuvenation.
The statute governing urban rejuvenation has been in force for nine years, but only 165 development projects have been carried out nationwide. Cabinet officials attributed the low implementation rate to a lack of incentives.
Accordingly, the latest Cabinet announcement should serve as a shot in the arm for developers and brokers. Most of them affirmed the merits of the floor-area ratio relaxation plan, saying that this will not only encourage builders to invest, but also improve the country’s outlook and landscapes.
However, some also expressed concern that a higher FAR may cause an oversupply of houses on the domestic market, and some said it may cause Taiwan’s city skylines and building lines to deteriorate.
