The Taiwan Banker

Following the recent earthquake in Hualien, urban renewal is once again in Taiwan's headlines. It's good that society is focusing on urban renewal, but we need to think about it on a deeper level; we shouldn't simply engage in the same kinds of haphazard development projects as in years past. Taiwan's future urban renewal should be innovative, sustainable, highly functional and aesthetically pleasing. If we can transform the face of our cities, Taiwan will benefit significantly. Huang Boyi has long focused on issues related to urban life, such as catastrophic risk management, urban renewal, reconstruction, smart cities and innovative urban financing. He also observed the successful revival of Tokyo Station in Japan. To beautify Taiwan's cities, Huang believes that we must adopt innovative urban financing and sustainable urban development techniques. It's important to be well prepared for earthquakes and other natural disasters. Taiwan has done much work in this area. However, Taiwan is less experienced with urban renewal. Huang Boyi points out that refurbishment of old buildings is just one basic element of urban renewal. Successful urban renewal requires a long-term plan. Without one, Taiwan will have a much harder time rejuvenating the appearance of its cities in a decade's time. Given that Taiwan experiences many earthquakes, what are your suggestions for urban renewal here?Huang Boyi: As President Tsai said in November 2016, different government departments must work together to manage this task. Currently, the Ministry of the Interior, Ministry of Finance, Financial Supervisory Commission (FSC) and other relevant departments are working together. It's refreshing to see the clear communication among the different government bodies. To learn about Japan's successful urban renewal experience, the Taiwan Academy of Banking and Finance (TABF) traveled to Japan together with representatives from local financial institutions. Japanese successful urban renewal experience is not merely the result of government efforts. Financial institutions have also played a very important role. Japan not only has policy and financial institutions to deal with issues such as post-disaster reconstruction, especially for the elderly. It also has an innovative trust mechanism to help improve the economy, including real estate management trusts and real estate securitization trusts. These financial vehicles are worth studying given their benefits for urban renewal. Taiwan is an earthquake-prone country. Thus, it is important that we focus on sustainable urban development as a core component of our national development strategy. President Tsai has pointed out that urban renewal must be coordinated by the private sector, state-owned banks and the government. Some of Taiwan's older buildings do not belong to private companies, but are the property of state banks or the government itself. That's why successful urban development requires the participating of all three key actors. Since state banks own many old buildings in the best parts of Taiwan's cities, in the urban elite areas, they should take the lead in responding to policies, and other government departments should not. If a state bank and government unit work together on such an initiative, it will be important to not get hamstrung by property rights issues. Otherwise, the project won't move forward. In the future, perhaps it will be possible to use the Japanese real estate management and disposal trust mechanism or the securitization model of real estate assets to achieve sustainable development in Taiwan's cities. How should other government departments support urban renewal? It is possible for publicly traded companies partially owned by the government to assist the private sector with financing for urban renewal. At the same time, state banks that have assets suitable for urban renewal, such as office buildings or residences, can also renovate the buildings. In addition to state banks, all other government units which have urban land resources should also participate in urban renewal, such as the central government, Taipei City government or other local governments. The more land made available in desirable locations, the better chance we have of successful urban renewal. Meanwhile, Japan's experience is once again instructive. The redevelopment of Tokyo Station is a good example of how new facilities can be integrated into an existing spatial system. The station's image has been transformed such that it has become an important destination in its own right in Tokyo, which includes high-end business, shopping and entertainment venues. Tokyo Station illustrates the highly efficient Japanese land-use model, which maximizes use of space under, over and beside the station. The renovation of Tokyo Station surroundings has been a great success, rejuvenating the appearance of the station and its environs, while also putting a contemporary twist on traditional Japanese cultural values. You mentioned state banks could increase their involvement in urban renewal. How will Taiwan Business Bank support Taiwan's urban renewal in the future? Is there a plan? As a state bank, Taiwan Business Bank will do its best to follow government policies and carry out urban renewal. In 2011, Taiwan Business Bank successfully carried out an urban renewal project on Roosevelt Road in Taipei City involving the participation of 29 private landowners in a 30-year-old community. It was the Bank of Taiwan's first land own self build financing case. The property owners used the land as a guarantee, applied for financing, and the funding was managed by a trust. In the end, the community was revitalized and has become a new landmark in that part of the city. Per our assessment, the value of the homes after renovation has increased substantially. Further, Taiwan Business Bank has an extensive network of branches. Some branches have been in the same locations for years. Not all of the branches are in locations convenient for their customers anymore. Some of these buildings are candidates for urban renewal. For instance, Taiwan Business Bank's credit card division is located on Linyi Street in Taipei (a largely residential community) while the Hsinchu branch is near Chenghuang Temple. These branches have been in these locations for more than 40 years. Given both safety concerns about the structures and the need to provide convenient service for customers, renovation of these branches should be a priority. Further, the Taiwan Business Bank building at the intersection of Chongqing South Road and Xiangyang Road in Taipei is more than 50 years old. It is now being assessed for urban renewal. If the neighboring area is successfully integrated with the renovated structure, the new area will be be 2,042 square meters. If this can be accomplished, it will definitely improve Taipei's cityscape.