[Editorial] Half Price Apartments

The government and ruling Uri Party agreed in principle to expand public housing construction in publicly-owned land space. Though they failed to decide on a specific timetable and whether to fully implement the plan, they came up with an idea of providing low-priced apartments tactfully-named “half-priced apartments.” Under the plan, those who purchase state-funded housing would have to only pay for their ownership of the building, as the land would be owned by a state-run construction company. Sponsored by Hong Jun-pyo, a Grand National Party lawmaker, the bill was widely accepted by the government and ruling party as well as the opposition party.

Though this is a promising plan worth pursuing, full implementation is not feasible given that public land space is scarce. Profitability is also questionable. Depending on whether an apartment involves a land lease or repurchase agreement, the plan could produce either positive or negative results. Financial burdens would be placed on the public. Only a few could enjoy windfall gains from the housing plan, while the rest could not. Enormous costs could be incurred if once it was carried out it went poorly; therefore, concerned parties should be meticulous in implementing such a plan.

To be exact, the term “half-priced apartment” itself is wrong. If apartments detached with land ownership were selling at “half” the current prices, public housing without ownership for both the land and the building should be offered for free. The term might lead to public misperception that prices for common apartments other than the ones without land ownership would be halved.

In regard to the real estate issue, the government and ruling party drew an anti-market anti-business decision of expanding the application of housing price ceilings into the private sector yesterday. It was also unwise of former Seoul Mayor Lee Myeong-bak to say that the constitution should include a clause guaranteeing the homeless the right to home ownership. No wonder critics view them as populist moves aimed at victory in the next presidential election.

Competition is heating up, as political circles are rushing to announce patronage projects for election campaigns and to copy ideas from each other. The government seems to be joining the move. It is concerned that their half-baked policy, which has long ignored public discontent, might backfire in the future.

Real-estate policy is directly linked to a basic right: the right to living. Therefore, it should never be unsubstantial or misleading. The government must draw a legitimate consensus based on market principles and successfully conduct policies step-by-step in order to gain public trust. Voters should also develop an eye for what is a good, productive policy for the whole nation.