Uri Lawmaker Blasts New Town Policy

“The chaos in the real estate market provoked by the government will not subside in a short time. Not only do authorities falter in implementing follow-up plans according to the announced policy, but they also seem to change their words over and over in the eyes of Korean citizens.”

On November 6, Chae Su-chan, the vice chairman of the policy planning committee in the governing Uri Party, rebuked the Geomdan New Town plan, Paju New Town project, and the grand policy for stabilization of the real estate market promulgated on November 3. He is a tenured professor of economics at Rice University in the U.S, and he worked as a guest fellow at the renowned American think-tank the Brookings Institute, and attended World Economic Forum in Davos as a presidential envoy as well; he is the foremost economy expert among Uri Party members.

He delivered a polemic against the government policy on immovable properties, saying, “The Government’s real estate policy is wrong not only with its ideas but also with the process of disclosing the policy. Chae argued that the “Songpa New Town Plan and Gangbuk Broadband Redevelopment Project have not been in place, although the so-called August 31 real estate countermeasures included these two projects. Meanwhile, Chu Byeong-jik, the minister of construction and transportation, suddenly came up with the gratuitous idea of building a ‘New Town tantamount to Bundang,’ the first and largest New Town in South Korea, and he went as far as to publicize such a makeshift policy, the Geomdan New Town plan, without consulting with our ruling party and undergoing inside government reviews.”

Lawmaker Chae argues that given the decreasing trend of the population, in the long run the New Town plans in the metropolitan area will trigger a glut of housing, and in the short run it will steer the real estate market into aberrant speculation with a short supply of housings in Seoul, where requisite demands exist. In other words, instead of the recent New Town plans, constructing some small apartment complexes by exploiting remnant areas in Seoul is more effective.

Kim Geun-tae, the chairman of the ruling Uri Party, had proposed a real estate policy called ‘apartment sales contingent on repurchase’ in a recent emergency meeting , but Chae refuted that it was an anti-market idea, which would only threaten to aggravate the inefficiency of the real estate market.”

tesomiom@donga.com