President Moon Jae-in said Tuesday that there was a need for “groundbreaking expansion” in housing supply as Land Minister Byun Chang-heum briefed him on the work plan. Byun briefed the president that the ministry would aim at selecting a place for government-led projects in July regarding the February 4 measure, which plans to provide 836,000 homes throughout the country, including 323,000 homes in Seoul, by 2025. But the briefing did not include details such as how many houses would be provided to where.
Korean citizens are most curious about where the government plans to provide houses. People mainly focus on whether houses would be provided in the area they want and how many houses are to be provided. But they are also paying attention to it because buying a house in the area to be selected for the public development project would mean no right of resident, only cash settlement. Multiplex and multifamily houses that were actively traded thanks to those who were hurriedly trying to buy a house but could not afford an apartment have come to the ‘trade cliff’ after the February 4 measure was announced. But as a side effect, newly built apartments which come with no possibility of redevelopment or reconstruction are going through a price increase. Growing opposition of land and building owners trying to protect their property rights against the public housing project in Huam 1 District, Yongsan District, Seoul foreshows the rock road laying ahead for the government-led housing supply.
“Twenty areas [throughout the country] have been de-facto confirmed as housing development districts, but the announcement is being delayed due to discussions with local governments. We will announce the plan in two or three separate occasions within the first half of this year,” Minister Byun said on national television several days ago. There is no way to know to which part of Seoul 93,000 redevelopment houses would be provided and where 68,000 houses close to subway stations in a semi-industrial area would be built.
This is why the ministry has come under criticism that it came up with a measure filled with groundless numbers to hurriedly stop the housing price rally. Many of those who are yet to have home ownership were disappointed when the ministry said they would only secure land to build houses by 2025. Some are worried that delayed provision of houses would elongate the line for housing subscription and increase long-term house lease prices.
If this situation continues, the effect of the February 4 real estate measure could rapidly disappear and the public anxiety on supply shortage could rear its head again. The government should dispel the anxiety by unveiling confirmed development areas as they work on the measure. It should find ways to increase the speed of housing supply by boldly changing the rules and even taking assistance from the private sector if limitations are found in the middle of the process.