Finding a win-win solution

The self-employed are battered with business shutdowns and losses from a protracted Covid-19 crisis. A majority of them cannot afford monthly rent fees as their businesses are forced to shut down or restricted under toughened social distancing rules. President Moon Jae-in ordered the cabinet to come up with measures to ease rent burden for small enterprises and self-employed. “It is unfair for them to bear the rents when sales have plummeted,” he said.

Relief for the self-employed is necessary. But we are worried about the government’s attempt to divide the people through the frame of the strong and the weak. Ruling Democratic Party (DP) Rep. Lee Dong-joo has motioned a revised bill on the commercial building tenant protection law, also called a “stop rent” act, to waive rents during the Covid-19 period. He proposes rent exemption for businesses subject to a shutdown and fee cuts by more than half for businesses under operational restriction.

But such laws can violate our constitutional rights to property. Landlords are not all rich. Many are retirees living off monthly rents and are hard-up as rents have not been paid on time. Legally prohibiting rent collection can cause many side effects. The housing tenant laws with benign intentions have only ended up hardening the lives of tenants. Moreover, landlords could complain that the government is dumping its quarantine failures onto them.

To aid the self-employed struggling to meet monthly rents requires a more careful approach. U.S., Canadian, and Australian governments have all expanded support for self-employed businesses. For instance, authorities subsidize them when they cannot collect fees. Korea too has been offering tax incentives to landlords to lower rent fees during the pandemic. Although such incentives have not produced big effects, forcing landlords to cut rent is not appropriate.

Authorities must try to find a solution workable for landlords and tenants. The left-wing Justice Party proposed that landlords, tenants and the government share the burden. Extra budgeting would be needed, but that can be saved through other budgetary cuts. The government must stop with its habit of applying the “fairness” rule on economic affairs. Instead of an ideological approach, a win-win solution must be explored.