Rumor: From 130,000 Social Homes, Rental Reform to the Zhaoji Scandal — Lai Qingde's Promised Pillars of Housing Justice Are Crumbling

If viewed individually, the government can explain the drastic reduction of Lai Qingde’s campaign promise of 130,000 social housing units to just 30,000 as a policy adjustment in response to land, fiscal, and demographic changes. Last year, the Executive Yuan announced rental reforms with great fanfare, including lease duration protection and rent increase limits upon renewal — now temporarily shelved — which could be justified as precautionary measures against landlords exiting the market and reducing rental supply. As for the recent Zhaoji property management scandal, the government can argue it is a corporate governance and financial issue of a private company, not entirely its responsibility. Each incident, taken alone, seems defensible. But when viewed together, it becomes difficult to treat them as unrelated, isolated events. They directly undermine the three key pillars of Lai Qingde’s housing justice agenda: first, the government’s ability to directly increase social housing supply; second, institutional reform to stabilize the rental market; and third, the government’s increasingly relied-upon social housing rental management system. Within a short period, all three lines of defense have developed major cracks. The real question is no longer which policy failed, but whether Lai’s housing justice policy is undergoing a fundamental strategic shift. From 130,000 to 30,000: More Than Just 100,000 Units Lost During his presidential campaign, Lai Qingde proposed a “One Million Renting Families Support Plan,” which included a clear commitment to directly build 130,000 additional social housing units on top of existing stock. This number was not externally imposed but a self-declared policy pledge by Lai’s campaign team. After taking office, the government initially continued to promote this goal, but the latest planning phase has slashed direct construction to approximately 30,000 units, drawing criticism from civil groups that the 130,000-unit promise has been effectively broken. The government defends itself by arguing that housing policy cannot be measured solely by “how many social homes were built.” It claims it will still achieve the goal of supporting one million renting families through a mix of direct construction, rental management programs, and rental subsidies. This argument appears logically sound on the surface — housing problems indeed cannot be solved by government-built homes alone. But the real controversy lies in the government’s practice of lumping three fundamentally different policy tools into a single accounting framework. Direct construction of social housing increases the government’s long-term, publicly controlled housing stock. Rental subsidies reduce immediate housing costs for tenant households. Rental management programs primarily address landlord-tenant matching, lease administration, and housing access for vulnerable groups. Each has value, but they are not interchangeable. Crucially, when a privately owned rental unit is enrolled in a rental management program, although lease quality and management may improve, no new housing supply is added to the market. Housing market expert Li Tong-rong offers a blunt analogy: scooping fish from Tank A into Tank B and then labeling Tank B as “social housing” does not increase the total number of fish. The problem isn’t rental management itself, but when the government counts “rental services” as “social housing supply,” it risks creating a policy illusion: the number of households covered by housing policy grows on paper, but Taiwan’s actual stock of long-term, publicly available housing remains stagnant. Therefore, the reduction from 130,000 to 30,000 units is significant not just for the 100,000 units lost, but because it reflects a strategic shift in the Lai administration’s housing policy — from “increasing public housing supply” toward “expanding policy coverage.” Both approaches may yield impressive statistics, but their long-term structural impacts on Taiwan’s housing market are fundamentally different. Why Did Last Year’s Rental Reform Flip So Quickly? If social housing addresses supply, rental reform tackles institutional issues. In 2025, the Executive Yuan’s Zhuo Cabinet and the Ministry of the Interior announced high-profile rental market reforms, including longer lease terms, limits on rent increases upon renewal, and stronger protections for tenants’ rights to apply for subsidies and register residency. The rationale was clear: Taiwan’s rental market has long suffered from short lease durations, unpredictable rent adjustments, and tenants’ fear of landlord retaliation preventing them from asserting their rights. The government aimed to establish more stable rental relationships. Yet, within less than a year, the policy direction has visibly reversed. The Executive Yuan recently stated that legal amendments will prioritize “socially consensus-driven” elements, temporarily shelving the most symbolic measures — lease duration protection and rent increase limits upon renewal. The government’s stated reason is concern that overly restricting landlords might reduce their willingness to rent, ultimately decreasing supply and harming tenants. Policy adjustments are acceptable. Governments should not stubbornly persist with policies known to cause severe side effects just to save face. But the real issue is this: when the Executive Yuan proposed this reform last year, did it not consider the possibility of landlords exiting the market? If it had already assessed this risk, why did it still publicly announce these measures as key reforms? If new evidence, research, or market conditions have emerged this year, the government should present this data transparently to justify the reversal. Otherwise, the public sees only a familiar policy cycle: loudly announcing reforms, then gradually retreating under pressure from interest groups and implementation challenges, citing “need for greater consensus.” This damages not just one rental policy, but the predictability and credibility of government policy. When people can no longer be sure whether a reform officially announced last year still stands today, policy trust erodes. This creates the first commonality between the shrinking 130,000-unit target and the retreat on rental reform: in both cases, the government itself first made clear commitments, then later reinterpreted or downgraded them. Governments have the right to revise policies, but the more significant and specific the promise, the greater the responsibility to provide convincing reasons when changing course. The Zhaoji Scandal Exposes Structural Risks in Rental Management Just as direct social housing construction is being drastically scaled back and rental reform is retreating, another key housing policy tool — rental management — is also sounding alarms. Zhaoji Property Management is a major rental management operator and a key contractor for the government’s social housing rental management program. The scandal began when Zhaoji founder Li Jiancheng’s affiliated companies — Zhaoji Investment and Jujixie Management Consulting — defaulted on corporate bonds they had issued. As prosecutors investigated, allegations emerged that Li Jiancheng had misappropriated funds. Initially, Zhaoji attempted to separate the financial crisis of its affiliated companies from the core Zhaoji Property Management entity. The public initially hoped that with Li Jiancheng’s departure and other shareholders taking over, operations could continue. Acer, which holds about 20% of Zhaoji’s shares, briefly stepped in to rescue the company. On August 5, Acer appointed Li Wenxiang as Zhaoji’s new chairman and CEO. But just 48 hours later, Li Wenxiang resigned from both positions, and Acer withdrew all its corporate director seats. Acer publicly cited only six words: “internal management deficiencies.” There is insufficient evidence to determine what Li Wenxiang saw during his two-day tenure, nor can Zhaoji’s potential financial or governance issues be directly blamed on the government. However, what the Zhaoji incident should alert the government to is that this company is not an ordinary private business unrelated to public policy. It has long contracted with the government on social housing rental management and currently manages thousands of policy-related leases. If Zhaoji itself faces liquidity or operational issues, the impact would extend beyond shareholders, investors, and banks — affecting thousands of landlords, tenants, and the government’s own policy implementation capacity. This is the other issue highlighted by Li Tong-rong: as the government increasingly relies on rental management to rapidly expand policy coverage, business naturally concentrates among large operators with manpower, IT systems, and cross-regional service capabilities. The problem is whether the government has simultaneously established financial oversight, performance guarantees, concentration risk management, and early warning mechanisms for these policy contractors. If the regulatory authority’s evaluation of rental management companies has focused mainly on the number of units managed, matches made, and administrative tasks completed, without fully understanding the company’s balance sheet, cash flow, exposure to affiliated firms, or contingency plans for the collapse of a major operator, then corporate risk will inevitably become public policy risk. The greatest policy significance of the Zhaoji incident is not that rental management is unworkable, but that it warns the government: if you choose to use private companies extensively to implement public housing policy, you cannot focus only on subsidies and market expansion while leaving corporate governance risks entirely to the market. From Increasing Supply to Subsidizing Demand When these three events are viewed together, the direction of the Lai administration’s housing policy becomes increasingly clear. The most difficult and expensive — yet most effective — method of truly increasing public housing stock, direct construction, has been drastically reduced. The government has thus become more reliant on rental subsidies and rental management. But the very rental reforms designed to further protect tenants’ rights have been halted due to resistance. Meanwhile, the rental management system, which the government heavily depends on, has now exposed governance, concentration, and oversight risks due to the Zhaoji scandal. The government is not spending money, nor is it failing to support renters. On the contrary, the central government invests over NT$30 billion annually in housing policy.