Which way to utopia?
The author is an editorial writer of the JoongAng Ilbo.
In his autobiography “Confessions,” Jean-Jacques Rousseau mentioned a “great princess,” who casually said, “Well, let them eat brioche,” upon being told that her starving peasant subjects had no bread to eat. It was not entirely meant to be satirical, nor could he have imagined the quote to be later attributed to Marie Antoinette and help trigger the French Revolution, becoming the most potent symbol of the disconnected nobility of the French at the time. Marie Antoinette was only 12 at the time the book was published, and therefore she could not have uttered the fateful words. Still, the masses could not be blamed for believing she did, and they needed a human scapegoat to revolt against.
Outgoing Land Minister Kim Hyun-mee and ruling Democratic Party (DP) Rep. Jin Sun-mee must feel similarly frustrated after their innocent comments were misunderstood by the public. Jin said, “Stop having fantasies about apartments,” earning the nickname “Jin-toinette.” Kim said, “I would have baked day and night if apartments were bread” to earn the scornful moniker “Bbang [bread]-toinette.” They could have felt they were wrongfully made into public scapegoats. But they should ruminate on how out of touch they had been with their ideals about real estate.
The liberal Moon Jae-in administration envisioned a real estate utopia with a standard single home per household, a heavy tax on unearned incomes from property profits and a statutory guarantee for tenants to live without worries about higher rents or losing their apartments after their leases expire. That utopian vision led to toughened residential regulations, multiple taxes and surcharges for extra homes, as well as stronger rights for tenants. During the transition to the ideal world, the government aims to supply public rents until 2025 to absorb a quarter of all rent demand. The government also promised lifelong housing programs to allow middle class people to live happily for up to 30 years. Not to mention, progressive Gyeonggi Gov. and president-aspirant Lee Jae-myung has also been pushing similar real estate policies.
The idea of housing equality is modeled after German experiments. In his book “Real Estate Is Done,” Kim Soo-hyun — the former presidential policy chief who was responsible for designing the housing policy of the Moon administration — cites Germany as an exemplary case when it comes to housing policy. The DP’s Tenants Protection Acts were benchmarked on those of Germany. To increase housing supplies after World War II, the German government promoted the commercial real estate industry. It cut taxes for private builders who rented out their properties. The government enhanced tenants’ rights through a nearly limitless extension in lease terms and a cap on rent hikes. The housing market became stabilized. Fewer Germans chose to own their homes. The home ownership rate stood at 44 percent as of 2018, 15 percentage points lower than South Korea’s.
Sadly, utopia doesn’t exist. Housing prices in seven major cities in Germany surged 118.4 percent and rents 57 percent over the last 10 years. The middle class began to go after homes due to deeply widened disparities with the property-rich folks.
To Koreans, the concept of the home is more sacred than it is in Germany. The meaning of owning a home is very different. Through the rapid rags-to-riches transition, a jump in inflation and urban concentration, apartments have become a sanctuary and even life goal for Koreans. Telling them to suddenly give up their dream and comply with some concept of egalitarian life won’t work. The liberal government’s preaching about the merits of rented homes or monthly rents only generated further resentment. Human greed is stronger than goodwill, at least when it comes to the mercantile world.
Marie Antoinette, the last queen of France, was not that outrageous. Although she lived in luxury, she farmed potatoes and liked smaller residences over the eminent Palace of Versailles. But the estranged queen living comfortably and carefree in her palace was despised by the people living in harsh conditions and poverty. A policy that becomes disconnected with the real world will only backfire. People will lose trust in the government entirely in the end.