With the Lee Jae-myung government nearing its first anniversary, questions are growing over whether its core real estate approach — expanding housing supply — can deliver results. Critics say the supply structure itself is weakening, with private-sector permits cut roughly in half and construction of non-apartment housing such as multi-family and multiplex homes effectively halted.
Democratic Party lawmaker Lee Yeon-hee held a forum at the National Assembly Members’ Office Building on the 23rd titled “Normalizing Real Estate, Asking a New Path to Housing Stability,” saying there is a need to assess the government’s real estate and housing policies over the past year and set a new direction to stabilize housing.
Lee said real estate policy is a top task for every administration and that expanding supply is central in a volatile market. She said addressing supply shortages from the previous administration is the starting point for market stability. Lee added that the government’s plan to supply 1.35 million homes will take time to show results, with visible effects expected in the middle to later part of its term.
At the forum, Kwon Dae-jung, a chair professor at Hansung University, said the 1.35 million-home plan lacks realism. He said supply in Seoul amounts to only about 27,000 households, and noted that a previously presented plan to supply 300,000 homes has, in some cases, not even reached the presale stage for nearly 10 years. “The biggest problem is the absence of a short-term supply policy,” he said. Kwon called for a more flexible approach, including revitalizing the non-apartment market and exempting small homes below a certain size from regulations.
On regulations for owners of multiple homes, Kwon said applying the same rules to “livelihood” multi-home owners has limits. He called for easing financial regulations for young people and those without homes, and for more selective regulation. He also urged expanding supply models such as rent-to-own arrangements.
Byun Chang-heum, a former minister of land, infrastructure and transport, said the housing market is showing both a “supply cliff” and regional imbalance, underscoring the need for a policy shift.
Byun said private-sector permits fell from 623,000 homes in 2016 to about 304,000 in 2025, and that supply of non-apartment housing such as multi-family and multiplex homes has effectively stopped. He said Korea Land and Housing Corp., known as LH, is partially filling the gap but not enough. Byun said home prices in Seoul have surged while provincial areas remain sluggish, widening asset gaps and a sense of relative deprivation.
He also pointed to limits in existing supply methods. Securing unused land has reached its limits due to complaints and practical constraints, he said, while redevelopment and reconstruction produce limited net increases and leave unresolved issues over resettling original residents. He added that development gains are structured to concentrate on buyers of newly sold units.
As alternatives, Byun proposed deregulation and institutional changes. He called for easing floor-area ratio and building rules to enable mid-rise, high-density development, and for designating areas near transit hubs as “housing supply promotion zones” with incentives. He also urged better use of semi-industrial zones and looser standards for multi-family and multiplex housing.
Byun said units secured through floor-area incentives should be used to encourage resettlement of original residents, and that a supply model with both public and private participation is needed. He said expanding supply should be pursued alongside inclusiveness and regional balance.
* This article has been translated by AI.
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