A matter of trust

Senior government officials owning multiple homes are in the hot seat again after Prof. Cho Ki-sook, a former senior presidential secretary for public relations in the Roh Moo-hyun administration, criticized the Moon Jae-in administration’s real estate policy. On Facebook, she wrote, “I was shocked to find that many high-level officials in the current administration are multiple home owners.” Appearing on a radio program, Land Minister Kim Hyun-mee expressed regret over Blue House staffers’ passive reactions to President Moon’s request they sell any properties they aren’t living in.

Last December, Moon’s Chief of Staff Noh Young-min recommended — read “ordered” — his subordinates above the level of secretary to sell any homes they weren’t living in. Six months have passed, but his instruction seems to have been ignored. Six out of 11 senior aides still own multiple homes — except for a new recruit who sold his extra apartments before joining the Blue House.

The presidential office is not alone. About one third of top officials and heads of public organizations — who must report their real estate assets to government authorities — possess more than one apartment. Despite the ruling Democratic Party’s warning to nominate only single-residence owners for the April 15 parliamentary elections, 43 of its 176 lawmakers are multiple home owners.

Their excuses are diverse. Some blame a lack of time to sell their apartments or a mismatch between the price they can get and what they want. Others blame complicated family financial issues. But their ownership of apartments nearly double that of ordinary citizens only reduces public trust in the government’s real estate policy.

The Moon administration is waging war on real estate speculation, as seen in 21 sets of policies on housing loans and tax benefits. However, policies focused on curbing demand have only backfired. As a result of government restrictions on loans, people without a home have trouble borrowing money from banks. After 21 sets of measures didn’t work, the government is fiddling with the next set.

Senior government officials are reluctant to sell properties simply because they are not convinced of the effectiveness of the government’s real estate policy based on demand. How can a government convince ordinary citizens to sell their properties even when it cannot persuade its officials? With a whopping 1,100 trillion won ($915.1 billion) already floating in the market, more rules cannot address the problem. If the government does not change course toward supply-side solutions, it will never win a battle against real estate speculation.