Minister Candidate Grilled on Housing Policy

“I think the biggest share of responsibility for the recent surge in housing prices falls on the government,” said Lee Yong-sup, the minister-designate of Construction and Transportation.

Lee virtually admitted the government’s failed real estate policy at the confirmation hearing held by the National Assembly’s Construction and Transportation Committee on December 6.

At the hearing, ruling and opposition party lawmakers asked questions about the government’s failed real estate policy.

Grand National Party lawmaker Shim Jae-cheol pointed out that the Roh administration’s property market policies have been unsuccessful and disappointing to the public. In response to his remark, Lee said, “The government itself is the main culprit and the Ministry of Construction and Transportation is at the center.”

When Uri Party lawmaker Jeong Hee-soo asked, “What do you think is the biggest reason for hikes in housing prices?” Lee answered, “The government’s policy is.”

He added, however, “It is premature to say current real estate policies are a total failure. We need to judge when President Roh’s 5-year term ends.”

When Democratic Party lawmaker Lee Nak-yeon criticized Lee, saying, “In 2003, after the announcement of new real estate market policies on October 29, you, then Commissioner of the National Tax Service, said, ‘Housing prices cannot go up any further. Multiple home owners would be better-off selling houses and saving money before the implementation of the new policies.’ But look at what happened. Housing prices skyrocketed. How can we have confidence in your policies?”

In response, he said, “Housing prices should definitely go down from the current level.”

Uri Party lawmaker Jeong Jang-seon argued, “Eighty to ninety percent of the population thinks the current policies are wrong. Under such circumstances, the public will not buy any government’s measures.” Lawmaker Jeong Seong-ho of Uri Party also said, “All the policies of property market led by Cheong Wa Dae failed.”

Lee hinted he would maintain policy direction of suppressing demand in the property market, saying “New conditions require new treatment but we still need to expand supply while curbing demand.”

He said deregulation on the reconstruction of apartment complexes in Gangnam area of Seoul is not appropriate in that its adverse effects of prices hikes exceed the positive effects of supply expansion. In regard to the issue of raising threshold for levying a comprehensive real estate tax, he avoided a clear answer and just said, “We need to consider a lot of factors.”

Meanwhile, no issues were raised on his wealth, military service record, and other personal records because he has already undergone confirmation hearings twice before he served as the Commissioner of the National Tax Service and the Minister of Government Administration and Home Affairs. He is the first to appear three times at the confirmation hearings on Roh’s watch.

However, some pointed out that Lee, an expert on taxation, is not an appropriate candidate for the Minister of Construction and Transportation. Grand National Party Lawmaker Yoon Doo-hwan praised him first, saying “He is clean and trusted by others as was evidenced that he served in high-ranking posts several times during the current administration.” But he then pointed out, “His expertise is not in construction or transportation. He is not a suitable candidate.”

myzodan@donga.com