Doubts about the nominee

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Doubts about the nominee

Published: 07 Dec. 2020, 20:18

Joo Jung-wan
The author is a business news editor of the JoongAng Ilbo.

The “bread queen” has finally exited. Land Minister Kim Hyun-mee was let go after being hounded for her ill-timed and ludicrous comment of “I’d bake apartments day and night if they were bread.” Her remarks translated into an admission of the conundrum in the housing market originating with a critical shortage of supply. But she is deemed a lightweight minister compared to her successor, former president of the Korean Land and Housing Corporation (LH) Byeon Chang-heum.

Byeon is a member of the entrenched league of former presidential policy chief Kim Soo-hyun, the architect of the real estate policy of the Moon Jae-in administration. The message is clear. The administration will go even tougher on housing policy. On Facebook, Lee Hye-hoon, former lawmaker of the main opposition People Power Party (PPP), pointed out that Byeon had been the theorist and back-seat driver of the real estate policy under the Moon government. The PPP released a statement that a thunderstorm (Byeon) may be coming now that the rain cloud (Kim) has passed.

Byeon, a former professor at Sejong University, has strong conviction on the rights of tenants. He likes to cite the housing rights in the Basic Housing Act. His favorite is Article 2, which stipulates the right to live in a “comfortable and stable residential environment.” Although it is ideal, how to achieve it is a different matter. A policy with a benign design does not necessarily lead to desirable results.

The best example is the two rent-related bills the government and ruling Democratic Party (DP) railroaded through. The keystone was to mandate a lease term of four years from the current two. As a result, rents dried up, sending prices skyrocketing. The laws left both rent seekers and landlords disgruntled. The existing tenants would be happy for now as they are guaranteed a minimum of two more years. But when it comes to their turn to find a new rental, they will be confounded by unaffordable prices.

Still, the incoming minister is unrelenting. He thinks the lease term should be extended to six years — three years plus three. During his interview as a professor, he said tenants should be able to choose to live at a property for a minimum of six years. He proposes the option of another three years after the three-year lease expires instead of allowing two extensions in a two-year term. A motion proposing to change the statutory lease term to three years plus an automatic option for another three years was already filed with the legislature by DP Rep. Park Kwang-on. Park, a three-term lawmaker and former MBC reporter, serves as the DP’s secretary general.

A dearth of housing supply is a greater problem. Outgoing Land Minister Kim was ridiculed for her comment about wishing to bake apartments if she could. But at least she has come to admit the gravity of the dire shortages.

Byeon is different.

Land Minister nominee Byeon Chang-heum, former head of the Korea Land and Housing Corporation, answers questions from lawmakers in the National Assembly’s regular audit of the state-owned company on Oct. 4, 2019. He will replace outgoing Land Minister Kim Hyun-mee after he passes a confirmation hearing. [YONHAP]

In an interview with the JoongAng Ilbo in September, the chief of public housing operator said home supply was not short in Seoul. His writing published in monthly journal Urban Issues two years ago also said the surge in home prices in Seoul is irrelevant to housing shortages. Instead, he blames it on online communities, lectures and social clubs on real estate, which have been working as a “gigantic network to inflate real estate prices.” He believes speculative forces must be rooted out to stabilize housing prices. In his book “Real Estate Is Done,” Kim Soo-hyun said the Korean society is confused about the supply deficiency.

The Land Minister nominee apparently has no intention of lifting the cap on reconstruction and redevelopment on aged apartments in Seoul. In the interview with the JoongAng Ilbo, he said it was wrong to regard reconstruction and redevelopment as a real estate development project. Byeon, who served as director of the Korea Urban Research Institute, persistently opposed renovation projects that can kick out tenants. Instead, he wants to increase the number of houses for rent. Although rents are not a bad idea, they won’t be able to calm the housing jitters.

The Moon government would be at its fourth year in the coming year. Does it really want to spend the remaining 18 months blaming ongoing troubles on policy failures of the past governments? The replacement of the land minister raises more concerns than expectations. We don’t want a repeat of past failures of the government.