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Housing supplies must follow eased restrictions

Published: 06 Nov. 2024, 19:52

The government is lifting greenbelt restrictions across 2.21 million square meters (158 acres) of land across the capital region, including one in the posh neighborhood of Seocho District in southern Seoul to supply 50,000 new housing. In Seocho, 11,000 out of 20,000 new housing supply will be reserved for long-term rentals for newly-weds. The couple can live in the housing for up to 20 years upon having their first child and buy back the residence below the market price if they have more than two children after 20 years.

Since expensive housing is blamed for the country’s ultra-low fertility rate, the government hopes the offer of housing security can promote births.

But there is skepticism about whether the government can meet the timeline of completing the sale of new housing supplies by 2029 to allow move-ins by 2031. Apartment prices in and around Seoul remain on the rise, although the gains have somewhat slowed. Authorities have been tightening mortgage loans, but the heat can only cool off by an increase in housing supplies. It takes time for new housing to materialize.

In the meantime, the government must rein in the expectation for inflation in housing prices. The government must earn faith that it will see through its housing programs. The previous Moon Jae-in government in 2020 announced it would turn a military golf club zone into a residential district offering 10,000 housing units. But the plan was scrapped in the face of residents’ protests. The Ministry of Defense also opposed the plan after governing power went to the conservatives. Uncoordinated and expedient housing measures can only invite market distrust. The government must not repeat their past mistake.

The government in August vowed to ease regulations on urban redevelopment to increase housing in inner Seoul. The project has made little strides as it requires legislative cooperation for law amendment. The government must eagerly seek out help from the main opposition through persuasive reasoning on supply measures. The opposition also should pay heed to the plan if it has its eyes on next presidency.

Reckless housing programs amid a thinning population can be risky. Greenbelt zones can be important amid challenges from climate change. The housing hot spots are Seoul and the capital region. Reconstruction must be facilitated to enable a continuous supply flow.

A close watch on speculative activities is essential. In March, 2021, we learned how employees of state-run Korea Housing and Land Corp. used inside information for speculative housing purchases. They bought land ahead of construction announcements and planted expensive trees to receive bigger compensations. Authorities must thoroughly keep surveillance on the access to confidential information and illegalities during building and sale processes.