Seoul Mayor Oh Se-hoon criticized the government for failing to properly discuss the easing of relocation loan regulations for reconstruction and redevelopment projects, an issue the city has raised for over a year. Following a Cabinet meeting chaired by President Lee Jae-myung, Oh held an emergency briefing to urge the government to improve the system, stating that the loan regulations are delaying supply in the redevelopment sector.
On July 14, after the Cabinet meeting, Oh explained the contents of a report submitted to the government regarding the "normalization of the Seoul real estate market" at a briefing at Seoul City Hall.
He said, "I saw recent reports indicating that the Ministry of Land, Infrastructure and Transport is positively considering support for relocation loans, but ultimately, this matter needs to be communicated to the Financial Services Commission, which responded that it was 'unaware' of the issue. This relocation loan has been a matter of discussion for a year, yet it has not even been communicated to the Financial Services Commission," he stated.
Oh further pointed out, "The issue of relocation loans is included in the discussion list for the national public debate, but what good is it if it is only listed? The housing policy proposed by the city, which affects 10 million residents of Seoul, is not being properly discussed."
During the briefing, Oh categorized the policy tasks in the report submitted to the Cabinet into three areas: redevelopment projects, private rentals, and tax reform.
Regarding redevelopment projects, he emphasized the need to accelerate the pace of reconstruction and redevelopment to expand supply. He noted, "In the past three years, 90% of housing supply in Seoul has been handled by the private sector. Combining the 472 ongoing redevelopment projects with the 'Moa Town' initiative, there are over 700 projects, which exceeds the amount the government plans to supply anew, approximately 85,000 units."
He added, "Many projects are delayed due to restrictions on relocation loans. Blocking relocation loans with regulations contradicts the goal of expanding supply. We need to ease the regulations on relocation loans and the legal cap on floor area ratio to ensure that redevelopment projects can proceed normally."
Oh also mentioned the necessity of revitalizing private rentals, stating that non-apartment and officetel rental housing is a crucial part of housing stability for low-income residents. He argued, "If we antagonize private rental businesses, supply will inevitably decrease." He called for the relaxation of regulations that hinder the supply of new rental housing and for expanded tax support to increase the availability of rental properties.
On tax policy, he suggested that tax policies should be designed to stimulate supply, proposing the maintenance of long-term holding special deductions and the realistic adjustment of property tax and comprehensive real estate tax standards. He added, "We need to alleviate the excessive tax burden on actual residents to increase the housing supply available in the market."
Oh also responded to President Lee's request during the Cabinet meeting for a separate report on the causes of supply delays in Seoul, stating, "I will submit a more direct and detailed second report to ensure the president accurately understands the situation."
He noted, "The report submitted today included a nuanced explanation of the reasons for the delays in Seoul's reconstruction and redevelopment efforts, and I will provide additional details on the insufficient cooperation from the Ministry of Land, Infrastructure and Transport."
This briefing took place immediately after the Cabinet meeting. Oh had intended to explain the 'normalization of the Seoul real estate market' during the meeting but held an emergency briefing to announce the contents of the report after not receiving an opportunity to speak. He expressed, "I feel quite disappointed and deeply regretful that I was unable to speak at the Cabinet meeting, where only the report was delivered. I do not view it as a deliberate oversight, but the Cabinet meeting should be a place for discussion."
* This article has been translated by AI.
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