The real estate show continues

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The real estate show continues

 The plan to build 4,000-units of public housing in the idle land of the Government Complex in Gwancheon city, Gyeonggi, has been scrapped due to strong opposition from residents. The ruling Democratic Party (DP) and the Ministry of Land, Infrastructure and Transport announced they will seek another location for 4,300 households in place of the Gwacheon site. Although the revised outline feigns to scale up the supply plan, it in fact is canceling a housing project that had been centerpiece in the supply measure of Aug. 4 last year.

The government and DP have withdrawn the plan in the face of strong opponents from Gwacheon, who threatened its mayor Kim Jong-cheon of the DP to get ready for a referendum to nullify the plan. The ramifications could be big as other districts, which would have to yield big-scale land for state-led public housing, could take similar actions. The entire supply plan could be wrecked as well as public trust in government policy. The supply measures aimed to tame the runaway housing prices could be disrupted.

Residents of Nowon district who would have to surrender the Taeneung golf course for 10,000 units of housing and Yongsan for 10,000 units of housing and Mapo for 3,500 units of housing have also been opposed to such public projects. Oh Seung-rok, chief of Nowon district and also a DP member, faces a referendum on public housing construction.

The collective action was foreseeable. The DP and government hurriedly packaged supply measures in August last year due to a simmering public rage over surges in taxes and spikes in home prices due to regulatory real estate measures. The policy shift to increasing supply from suppressing demand was right, but the program neglected to consult with residents in the concerned neighborhoods first. The government chose public land sites just because the state owned them without seeking an understanding from the residents first.

The land ministry said it could adjust the plan in other areas, including Gwacheon, to more or less admit to the flaws in its August housing program. Last year’s plan is not the only half-baked supply measure. The additional measure announced in February also stoked strong protest from residents by including private land for new public housing supplies.

The government must sit down and draw up a realistic and feasible plan instead of repeating same mistakes and further upsetting the market.
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