[EDITORIALS]Lessons in home economicsThe government’s plan to build rental apartment complexes in some greenbelt zones has been stalled. The city planning deliberation committee of the Construction Ministry ruled that it was improper for the ministry to plan the construction of a total of 7,500 apartment units in greenbelt zones in Gangnam, southern Seoul, and in Gangdong, eastern Seoul. Accordingly, the government’s grand plan to construct a total of 1 million rental homes by the end of 2012 is not likely to be carried out smoothly.
The plan has been greatly enlarged under the current administration; the original plan, under the Kim Dae-jung administration, called for building 200,000 homes. The government’s goal of providing low-rent homes is understandable, but the government should have deliberated on whether it could secure enough land for 1 million homes and whether there would be enough demand. As the plan had been made without such deliberation, it wound up being unrealistic. Even the deliberation committee, which belongs to the Construction Ministry, had to say no to the the ministry’s housing policy.
To achieve 1 million homes, the government is trying to dodge development restrictions in greenbelt areas that are in relatively good condition and is causing conflicts with the local governments and residents. The government’s plan to build a rental apartment complex in Umyeon-dong, southern Seoul, is being opposed by the neighboring Gwacheon city, which is concerned about traffic jams. And residents in Hwaseong, Ulsan and Daegu are strongly protesting the central government’s plan to build rental apartment complexes. In some plans, the government has located the rental apartment complexes too far from urban areas, regardless of the fact that the residents would theoretically work downtown.
The more fundamental issue, however, is whether we need 1 million new apartment units. According to the Board of Audit and Inspection, the supply of such rental apartment units in the Seoul metropolitan area is three to five times greater than the demand. There are already plenty of unoccupied rental apartment units. The state-run Korea National Housing Corp., which is in charge of the project, plans to raise more money to cover the expanding debts ― raise more taxpayer money, that is.
The government should stop fixating on the magic number of 1 million, and instead carefully think about demand and supply, as well as the profitability of the rental apartment construction projects.