[EDITORIALS]Let’s not repeat a debacle

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[EDITORIALS]Let’s not repeat a debacle

Government efforts to curb skyrocketing real estate prices have reached the stage that it is considering the introduction of public land ownership. President Roh Moo-hyun, in his policy statement yesterday, emphasized a strong will to stabilize real estate markets, saying the government would mull public custodianship of land. No detailed plan was presented. Public ownership is a concept on which scholars are sharply divided. A discreet approach is a must.
The government has bitter experience with such an approach. In the latter part of the 1980s, it pushed three public land ownership bills to cope with rampant real estate speculation. But the housing lot ownership ceiling and the taxation on windfall profits from land sales were deemed unconstitutional by the court, and the collection of charges on profits from land development is scheduled to end in December.
The government is considering an extension of the development charges because it is the only means it has left to collect windfall profits from developers. Besides, the government is considering the introduction of public ownership of housing so that it can tax profits from renovation projects. It is also studying a housing unit sales permit system similar to that of land sales.
However, we see as a problem the fact that real estate policy relies so much on administrative tools. The government should not overlook the reality that price rises are caused by short supplies and overflowing fluidity in the money market, as we see in the case of ever-rising real estate prices in Gangnam.
Real estate speculation is the culprit that drives our society into the trap of high-cost and low-efficiency structure, where the poor get poorer and the rich get richer. We need a strong measure to prevent this, but it should be legal. The earlier attempt to introduce public ownership was foiled because of slip-shod preparations. Touching on sensitive issues out of zeal will only help dilute the effect of the policy. Although the introduction of public land ownership is inevitable, it should be without controversy over unconstitutionality and with clear goals.
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