A recent forum on housing policy hosted by the government has faced criticism from civic groups for failing to adequately represent the concerns of renters and low-income citizens.
The Citizens' Coalition for Economic Justice held a press conference on July 22 in front of the Blue House, stating, "The voices of homeless citizens struggling with rising housing prices and rental burdens were absent from the housing supply policy forum organized by the Ministry of Land, Infrastructure and Transport."
The coalition argued that to ensure housing stability for low-income renters, there needs to be a significant increase in the supply of land lease housing and long-term public rental housing in public development areas.
Land lease housing is a model where the land is owned by the public while only the buildings are sold. This allows for lower prices compared to nearby market rates, according to the coalition.
As an example, the coalition cited the Godeok Gangil 3rd District, where a land lease housing unit with a floor area of 59 square meters was priced at 360 million won. This is about 32.7% of the 1.1 billion won average price of nearby apartments.
The coalition explained, "If one were to purchase an apartment priced at 1.1 billion won, assuming a down payment of 300 million won and a bank loan of 800 million won, the monthly interest alone would reach 2.67 million won. In contrast, residents of Godeok Gangil 3rd District would only need to pay 360 million won for the building and a monthly land lease fee of 400,000 won to live in a new apartment long-term."
They emphasized that land lease housing could alleviate the issue of 'lottery-style' allocations and shift the housing market focus from asset value to utility value. The coalition called for land lease housing to be supplied in areas such as the third new towns and sites designated under the 1·29 plan, rather than traditional public sales.
The need to expand long-term public rental housing was also highlighted. The coalition defined permanent rental, 50-year rental, national rental, long-term lease, and integrated public rental housing as 'true public rental housing,' noting that these types account for only 4.4% of the total housing stock.
They stated, "If true public rental housing reaches 20% of the total housing stock, it could significantly contribute to housing stability for citizens."
Regarding the city of Seoul's push to revitalize redevelopment projects, the coalition expressed concerns that this could exacerbate rental instability. They predicted that redevelopment projects would generate a demand for relocation of 45,000 households annually in Seoul, which could increase rental demand by 8% if these households enter the rental market.
As discussions on expanding supply lean towards restoring private sector profitability, there is a growing demand for measures to secure public interest for renters and low-income households.
Additionally, the coalition urged the government to strengthen the now-ineffective excess profit recovery system for reconstruction, disclose construction costs to eliminate price inflation, fully reflect the fair market value ratio in the comprehensive real estate tax, and reform the long-term holding special deduction.
* This article has been translated by AI.
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