LH scandal won’t go away

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LH scandal won’t go away

Koh Hyun-kohn
The author is a senior editorial writer of the JoongAng Ilbo.

“Gambling is the child of avarice, the brother of iniquity, and the father of mischief,” America’s first president George Washington told his beloved nephew. But since avarice is in human nature, the pursuit of profit through speculation never ceases. Over 600 people among the social elites were found to have appropriated apartment units reserved for employees, and 40 of them were arrested or sacked for favoritism in the sale of the massive Hyundai Apartment complex in the posh neighborhood of Apgujeong-dong, southern Seoul, in 1978. Other massive housing projects were no different, including the first New Town in Bundang and Ilsan in 1990 and the second New Town in Geomdan and Dongtan in 2005. The dirty tricks then and now are more or less the same.

The Korea Housing & Land Corp. (LH) scandal looked like the typical scheming common to major housing projects. But it is set to become a game changer in the April 7 mayoral by-elections in Seoul and Busan. An outrageous jump in housing prices from repeated flops in real estate policy is the biggest reason. A 82.6-square-meter (890-square-feet) apartment in Seoul that averaged 660 million won ($587,782) nearly doubled to 1.2 billion won under this government. Public rage has reached a boiling point. This could be the straw that breaks the camel’s back. A buildup of seemingly minor actions can lead to massive reactions and consequences.

Young people without jobs or housing give up marriage. The marriage count in Korea in 2020 was 213,500, an all-time low. Due to difficulties in housing and employment conditions, people are delaying marriage or opting to stay single, according to an official at Statistics Korea. Even if they can afford a small studio, they cannot dream of having or raising children. Korea has the lowest birth rate — 0.84 in 2020 — largely due to housing insecurity. A survey by the Korea Development Institute, Koreans aged between 25 and 29 think it is ideal for a family to have 2.05 children. But a lack of housing has ruined the humble dream.

Since they are hopeless, they are extra sensitive to unfairness. They cannot stand others leading an easy life when they face a dead end at every corner. Anonymous online postings from LH employees added fuel to their fury. “We can profit until retirement by using borrowed names.” “Try getting into our company, if you can, instead of complaining,” some of them said. But investment through borrowed names is illegal. The contemptuous tone and disported sense of supremacy behind the writings is more appalling. Such corrupt public entities can hardly be tolerated. President Moon Jae-in’s purchase of post-retirement residence in Yangsan, South Gyeongsang also caused outrage. Upon questioning about the illegality behind the change of purpose of the farmland, Moon responded with anger. But the people cannot understand how the president can change land purpose after purchasing it cheaply for farming when it is banned for others. The president later ordered scrutiny of farmland trade.

The government at first distanced itself from the LH scandal. But Moon who is mostly aloof to social affairs acted fast and ordered thorough investigations. When public rage still did not die down, he vowed to end the ills related to real estate. Prime Minister Chung Sye-kyun said that the elites with access to power, capital, information and media have turned Korea into a speculative zone. By putting the blame on the past, the Moon administration tried to avoid accountability by posing as the judge of the affair. Roh Moo-hyun’s press secretary Lee Baek-man blamed construction companies, realtors, financial companies and media organizations for distorting the real estate market.

The reasoning has not worked this time. The public turned cold at every comment and new pledge from the government. It has lost credibility as a number of high-profile figures in the Blue House have been accused of avaricious activities. Kim Eui-kyeom, Moon’s former press secretary, resigned over buying a two-story building in a neighborhood designated later for urban development. Moon’s former senior secretary for civil affairs Kim Jo-han chose to resign after refusing to give up his two expensive apartments in Gangnam. Former chief of staff Noh Young-min used tricks to lower the capital gain tax. The list goes on when extended to the ruling party. Kim Sang-jo, Moon’s policy chief, was sacked after he raised rents on his apartments in Seoul by 14 percent two days before the law capping the rent increase rate to 5 percent went into effect.

Former Democratic Party (DP) Chairman Lee Hae-chan claimed that while the upper stream is clean, poor practices remain in the downstream. Is he suggesting that he and his colleagues are the upper stream and LH employees the downstream? After four years of the Moon administration, people have become utterly disillusioned. No matter how much they claim to be fair and honorable, they have turned out to be greedy and enjoying various privileges. The fallen — Cho Kuk, Yoon Mee-hyang, Pak Won-soon and Oh Geo-don — were the elites capitalizing on their progressive images. They differ little from the elites who had dominated the apartment market under the military regime in 1978.

We thought they would be at least more morally upright than conservative politicians. But now, we cannot tell who is worse. This is the reason why LH scandal won’t easily go away.
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