Revive redevelopmentThe government has finally released supply-end housing measures around Seoul to suppress demand through tougher taxes and loan regulations to ease soaring housing prices. We welcome it. Experts in general are in agreement that the housing market in and around Seoul cannot be stabilized unless supply meets the demand for permanent and quality living space in the capital. But the government response to market needs raises questions whether it can really balance the housing market.
Earlier, the government vowed a new supply of 300,000 units around the capital. But the first batch announced on Friday promised just 35,000 units in 17 public land sites. Authorities said more coordination is needed with related public institutions to increase the supplies. The first 10,000 units will be built on 11 sites in Seoul.
The number can hardly meet demand in the hot zones in inner Seoul. The Ministry of Land, Infrastructure and Transport indicated it could ease restrictions on some of the green belts in inner Seoul, but the feasibility remains doubtful. It also proposed raising residential ratios in areas allowed for commercial and semi-residential purposes. Even those additions cannot fulfill the demand in Seoul.
The plan of building four or five small commuter suburbs around Seoul would be of some help. If traffic, education and a cultural environment is well established, the new towns can help draw young families. Although much is to be desired, the government must continue to keep up the supply flow. Residents in some areas are already protesting residential expansion in their neighborhoods. Authorities must persuade them as well as keep a close watch on speculative activities. If implementation is disrupted, the public will lose confidence in policy.
The government must send a strong message to the market that it will be aggressive and consistent in supply measures. It also should re-consider reviving major redevelopment plans in inner Seoul that had been shelved in fear of stoking speculation. Tackling the extreme supply shortage in inner Seoul is the only way to stabilize the housing market in the capital.
JoongAng Sunday, Sept. 22-23, Page 34