Devil is in the details in candidates' real estate pledges

General election 2024

Published: 03 Apr. 2024, 14:10 Updated: 03 Apr. 2024, 18:03

Devil is in the details in candidates' real estate pledges

People Power Party leader Han Dong-hoon, left, and Democratic Party leader Lee Jae-myung rally support for their respective campaigns in Seoul and Incheon on Saturday. [NEWS1]

As the clock ticks down to the April 10 general election, candidates from both rival parties are scrambling to outdo each other with a plethora of ambitious real estate policy pledges.

The feasibility of such pledges, however, remains questionable at best.

Rep. Park Seong-jun of the liberal Democratic Party (DP), who is running for another term in Jung-Seongdong-B District of central and eastern Seoul, pledged to raise the threshold for levying the comprehensive real estate tax from the current 1.2 billion won ($887,442) to 1.6 billion won.

Park claims that “the comprehensive real estate tax should be levied only on the most expensive apartments.”

Kang Cheong-hee, another DP candidate vying for a parliament seat representing Gangnam-B District in southern Seoul, promised to remove Suseo-dong and Segok-dong from the list of neighborhoods subject to tighter sales restrictions aimed at reigning in speculative investments.

However, their DP leadership seems to differ, as the party’s platform vows to “stabilize the real estate market by curbing speculative investment demand and ensuring balanced housing supply.”

“The opposition [DP] is preoccupied with sensationalist policy pledges, rolling them out without any internal coordination,” pointed out Cho Jin-man, professor of political science at Duksung Women’s University.

On the other hand, former three-term lawmaker Lee Hye-hoon of the conservative People Power Party (PPP) seeks to relax the building height limit in regions near Mount Namsan in central Seoul.

The current regulation restricts the height of buildings in the area, with the cap ranging from 12 to 40 meters (39 to 131 feet), to preserve the landscape.

But the Seoul Metropolitan Government, which holds the final say in the matter, is not likely to lift the height regulation, not to mention that other districts in the area have different perspectives on the issue.

Meanwhile, candidates from the two major parties competing in Yangcheon-A District, western Seoul, are pushing to lift regulations on Mok-dong, where property owners in the neighborhood are currently required to obtain approval from the local authorities for any housing transactions.

Yet the Seoul government is not on board with the proposal, as easing the rule will likely drive volatility in property prices within the neighborhood.

Some of the pledges made by candidates are even further from reality. Kang Tae-woong, a DP candidate for Yongsan District, central Seoul, aims to move the presidential office out of the district, citing traffic jams and noise pollution.

However, the ambitious proposal, clearly targeting voters opposed to President Yoon Suk Yeol, lacks concrete details on its execution or timeline.

Former lawmaker Keum Tae-sup of the Reform Party — led by former PPP leader Lee Juk-seok — vowed to “break down the walls of nine universities in Jongno District [in central Seoul] to turn the area into a college town.”

While the proposal aims to garner votes from residents living near the universities with a “win-win” approach that will theoretically provide larger land space for the universities and raise property values, the land surrounding universities is highly limited.

A mega shopping mall project is another of the go-to campaign pledges for the upcoming election.

PPP candidate Yoo Gyeong-joon for Hwaseong-D District in Gyeonggi and DP Rep. Kang Hoon-sik, seeking another term in Asan, South Chungcheong, both pledged to bring a shopping complex to their respective districts.

The one that builds a mega shopping complex is a private company. But neither of the candidates has developed plans to incentivize companies or details on infrastructure construction.

“Many candidates on both sides of the aisle are playing ‘easy politics’ to lure in voters with unrealistic promises,” said Lee Jae-mook, a political science professor at Hankuk University of Foreign Studies, adding that “unqualified politicians may take a seat in the parliament if such groundless campaign pledges sway voters.”

Many of the ambitious real estate policy proposals put forward during the previous general election in 2020 have been scrapped.

DP Rep. Jang Kyung-tae, running for his second term in Dongdaemun-B District in central Seoul, promised to build a large-scale concert hall similar to the Sejong Center for the Performing Arts in Jongno District. The plan, with an estimated budget of 50 billion won, was scrapped afterward.

PPP Rep. Park Jin, a former foreign minister, promised in 2020 that he would relocate the Seoul Air Base in Seongnam, Gyeonggi, into Gangnam District in southern Seoul during his previous election campaign. The plan has not moved forward since.

Many campaign pledges involving transportation infrastructure, another key factor affecting the real estate market, also went astray. Some lawmakers promised to extend the subway lines or build new stations in their districts, many of which had fallen short.

Out of 7,450 campaign policies involving development projects from 251 elected legislators representing their respective districts in the National Assembly, only 50.3 percent have been completed as of December last year, according to the Korea Manifesto Center.

“[Candidates] tend to make vague declarations about real estate policies without any thorough assessment,” said Lee Hyun-seok, professor of the Department of Real Estate Studies at Konkuk University, stressing that “candidates need to clarify their plans for legislations and funding to make the pledges more feasible.”

BY KIM HYO-SEONG, PARK KUN, JEON MIN-GOO AND SHIN HA-NEE [shin.hanee@joongang.co.kr]