Real estate surrealism
The author is an editorial writer of the JoongAng Ilbo.
At the beginning of the year, the Blue House declared that people who own more than one apartment were not welcome as senior government officials. Many vice ministers promoted last month disposed of apartments in Sejong City. Government officials were offered apartments in the new administrative city at special rates as an incentive after the government moved to the new city in the central part of the country. They profited on the sale of a home they did not actually live in. They retained their apartments in Seoul.
Byun Chang-heum — a land minister nominee and former head of the state-owned Land and Housing Corporation — pledged public rental programs as a keystone of his housing policy. He bought an apartment in Bangbae-dong of Seocheo District in southern Seoul, in 2006 for 523 million won ($477,844). Even taking into account the 300 million won in mortgage he took out for the purchase, he would still profit nearly 1 billion won if he sold the apartment now.
There are many who live in motel rooms for one or two years, said Kim Ou-joon, a leftist commentator, in his podcast in defense of the government’s proposal to use idle hotel rooms for housing. Kim bought a two-story house with a mortgage covering 70 percent of its value. His home’s value rose by 1 billion won. How are they any different from the ordinary people who take out loans to buy homes?
What goes on in our society reminds me of the fictional dystopia portrayed in George Orwell’s “Animal Farm.” The allegorical novella published in 1945 was actually a satire of Stalin’s socialist dictatorship. The fable reflects events leading up to the Russian Revolution of 1917 to the Stalinist era of the Soviet Union in 1943. Animals ousted their human farmer to create a society where animals could be equal, free and happy. But the state of the farm worsens under the dictatorship of a pig named Napoleon.
The fable exposes the dangers of propaganda politics. The rebel forces that led the Russian Revolution for egalitarianism turned into even more brutal exploiters. Media were censored and an opposition outlawed by a law scripted by the communist leadership under the pretext of achieving equality. The Soviet Union lasted for 70 years. But it fell apart from the implosion of hypocrisy during and after the Cold War without any actual attack from the United States.
An “Animal Farm” farce has panned out in Korea’s real estate politics. Ruling Democratic Party (DP) Rep. Jin Sun-mee advised people to forego their fantasies about owning apartments and the DP chairman proposed to convert hotel rooms into rental housing. Outgoing Land Minister Kim Hyun-mee likened apartments to bread, saying she could bake them day and night if she had to. Vice Land Minister Yoon Sung-won claimed the confusion from tenants-related laws were “growing pains” that would pass. After looking around a 280-square-feet public apartment last week, President Moon Jae-in commented that a couple could raise two kids in the space.
Yet 90 percent of DP lawmakers live in sizeable apartments. Even Orwell would have been appalled by their blatant hypocrisy. While they own at least one apartment, the DP lawmakers want the people to give up their dream of owning a home and instead live in public apartments. How are they different from the pigs in “Animal Farm” who carry whips and recite the tweaked Seven Commandments: “All animals are equal, but some animals are more equal than others?”
Many people are unhappy. Those living in rental apartments and those who bought a home with their life’s savings and expensive loans are all anxious. The government has raised the appraised value of homes for taxation each year and pushed up housing costs beyond affordability through its 24 sets of real estate measures. The property market across the country has been rocked. Property taxes have gone so high that they make people feel like they’re paying monthly rent to the state.
In a poor and war-ridden country, shelter can be a comfort. In developed societies, a home is the best means for wealth building. Everyone desires to live in a good house. The president claimed he was confident of success in his government’s real estate policy. But the market cannot be bullied. Properties work the same way as stocks and foreign exchange. Excessive regulation and taxation will sap supply and harden ordinary people’s lives. Policymakers must stop with their hypocritical policies. They are testing public patience.