&#91EDITORIALS&#93Wrong move on housing

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&#91EDITORIALS&#93Wrong move on housing

The Seoul Metropolitan Government has revised the municipal ordinance on apartment unit reconstruction, extending the required period before reconstruction from 20 to 40 years. But the city council has changed the decision considerably. It is deplorable that it has done so, as if its members did not know about the worrisome phenomenon of the skyrocketing prices of some Gangnam-area apartments that are to be reconstructed. The council reasoned that prolonging the required period for a reconstruction permit could restrict property rights, but in practice, they succumbed to the demands of residents who want to profit from reconstruction.
To control real estate speculation, the city government has revised the bylaw on reconstruction: Apartment units constructed after 1990 can be reconstructed 40 years after construction, units constructed before 1979 will be allowed to do so after 20 years and units constructed between 1980 and 1989 have to wait two additional years for each year later that they were built. But the council has moved the base year back by 3 years. For example, a housing unit completed in 1982 is cleared for reconstruction after 26 years, or in 2008, but according to the revised bylaw, it would be allowable after 20 years, because the council moved the base year from 1979 to 1982. According to real estate dealers, this means more than 56,000 households in 61 apartment units built between 1980-84 will be cleared for rebuilding earlier.
Due to this measure, apartment prices will soar again. Already, in some apartment units, prices have started to rise. Expectation of profits from development is the main cause behind the overheated reconstruction market. The council is throwing the city into the hands of real estate speculators.
Even worse is the administration’s lack of principle. When the credibility of government policy is damaged, it is even more difficult to control speculation. Reconstruction raises housing prices, worsens traffic congestion and wastes national resources. It should be allowed when it is necessary for security reasons. To reduce negative side effects, the bylaw should be revised.
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