&#91EDITORIALS&#93Housing: think it through

A subject of much interest, the debate on building new towns in the vicinity of the capital, ended with the selection of Gimpo and Paju. The government has also acted again to prohibit re-selling of newly-issued apartment rights in areas where speculation is rampant. Speculation in real estate, especially in the capital area, has been caused by the lack of land for new apartments and houses; this decision will relieve the housing shortage in the capital area that has built up in the time since five new towns, including Bundang and Ilsan, were opened in the early 1990s.
But will the selection of Gimpo and Paju prevent speculation in real estate? The two cities will not satisfy the housing demand from Gangnam, the southeastern district in Seoul that leads the real estate price increases. The new towns are located 30 to 40 kilometers (18-24 miles) northwest of Seoul, and the demand there is thin. Educational and cultural infrastructure pales in comparison with Gangnam. Supply has to follow demand in order to stabilize housing prices.
The government also has to explain how the new towns are related to its plan to relocate the administrative capital. If the government builds new towns and then plans something else for the new administrative capital, the new towns will no longer function as they were intended. They will certainly not become self-reliant cities, contrary to the government’s intent. Historically, houses have been built before roads and public transportation is in place and Seoul’s northwest is already notorious for traffic problems.
The decision to prohibit reselling of newly-issued apartment rights will favor people who want to occupy homes rather than speculators. But this policy only applies to those areas designated as having rampant speculation. The government must prevent speculation around these new areas before it begins.
A plan or two will not stop real estate speculation. Price rises of newly-issued apartment rights should also be curbed. The reckless development of certain parts of existing new towns is due to the mismanagement of areas around them. Preventative measures are needed here as well.