How to lose trustBy-elections are being held next week. Since in-person early voting takes place Thursday and Friday, the dice has been thrown. The ruling Democratic Party (DP) which swept 180 seats in the 300-member legislature at the April 15 parliamentary elections last spring faces the worst-ever rating before the by-elections in Seoul and Busan. The public disgruntlement over housing insecurity and tax bombardment from a price surge has exploded through the scandal of Korea Land & Housing Corp. employees engaged in speculation through prior inside information.
Out of desperation, the DP proposed to amend the rates of housing appraisal that have been hiked in accordance with the jump in market value. The move goes against the core of the Moon Jae-in administration’s real estate policy to rightfully reflect the appraisal value for fair taxation on the property-rich. DP’s Seoul mayoral candidate Park Young-sun promised to cap the rise in appraisal value of apartments worth 900 million won ($796,000) or under 10 percent.
DP policy chief Hong Il-pyo has offered to ease loan-to value and debt-to-income basis for mortgage loans for real home buyers and increase benefits for them. The DP is out to crack the core of government regulations by hardening mortgage loans to curb housing speculation since Aug. 2 2017.
To ensure zero speculation in the public sector, the government is mandating all 1.37 million public employees report their assets and setting up a speculation-focused investigation team at the prosecution.
The sudden about-turn by the government comes amid bleak prospects of the election. The DP and government turned deaf ears to repeated warnings about tax bombardment from a steep rise in appraisal value, strict loan regulations stripping chances of the working- and -middle class of owning a home, and limitations of public-led housing development. Under its stubbornness, the 25 sets of real estate measures only fanned housing prices and resulted in today’s catastrophe. The government is paying the price for ignoring advice from experts and the market.
The government brings on ridicule for leaving the crackdown on speculation in the hands of the prosecution after fighting to weaken the institution over the past four years. Only recently, the DP passed a law to limit the prosecution’s investigative rights and yet it is now placing more than 500 prosecutors and investigators on the special force on speculation.
The public’s response is cold as most think the moves are aimed at winning the mayoral by-elections. The DP promised easing in comprehensive property tax before the election last year, but only acted to toughen it. The party has entirely lost credibility through flip-flops on campaign promises.