Overhaul the incentives

The public has become dumbfounded and enraged by the ways government employees built wealth through preferential housing supplies in compensation for the relocation of government offices to the administrative city of Sejong. The case with the Customs Valuation and Classification Institute under the Korea Customs Service has been most shocking. Even though it was not subject to relocation, it spent 17.1 billion won ($15 million) to set up a new building in Sejong, from which 40 employees profited big through special housing allocation in the city. About 200 employees with the Korea Coast Guard and the Saemangeum Development and Investment Agency which were relocated to Sejong and later moved out to other areas also built riches through trade in their share of apartments in the city.

The rise in apartment prices in Sejong was highest in the country at 37.05 percent. One can just imagine how much the government employees would have earned through real estate deals in just a few years.

Special housing program for government employees has long been a source of controversy. The program was a kind of incentive for civil servants who had to move out of the capital for work. But the program served more to build their wealth. According to asset disclosure by senior government employees of 2021, many had sold off their apartments in Sejong and kept the ones in Seoul under the internal order on senior officials to own no more than one home. Over the last 12 years, 26,000 apartment units were offered in special reserve for government employees. Housing prices jumped by more than three times during that period. Most of them were rented out and sold off for huge profit.

Some citizens are demanding the special housing program for government employees be scrapped. Winning an apartment subscription is more like a lottery for most people even when they had not owned a home for more than 10 years, but government employees are given too many privileges, they argue. Even when it only takes a 30- to 40-minute ride from Daejeon, where the Ministry of SMEs and Startups is based, to Sejong, the ministry employees also were given right to subscribe to the special housing supplies in the new city.

To address public anger over the runaway housing prices, the government must fix the Sejong special housing program. The government also must probe whether the budgeting for the new building by the customs institute was thoroughly supervised and if there had been lobbying by the Customs Service Commissioner. The case has been filed for prosecutorial probe. The government belatedly ordered ministers and vice ministers to ensure residence in their homes from this year. It must fix the housing rule for government employees by banning sale for a certain period and mandating longer period of residence.