[Reporter’s Notebook] Real Estate Measures Without Supply Are Meaningless

[Asia Economy Reporter Lee Chun-hee] "We will prepare measures to drastically increase housing supply." This was stated by Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki at the announcement of the July 10 real estate measures. He expressed his determination to personally lead the 'Housing Supply Expansion Task Force (TF)' to promote supply expansion through improvements in urban planning regulations, discovery of idle land, and utilization of vacant spaces in city centers.

However, different voices are emerging among the working-level officials. Officials within the Ministry of Land, Infrastructure and Transport say, "There is not much idle land left in Seoul," and express reluctance, saying, "We will try to find some, but expanding supply is actually not easy." In fact, while the tax-related aspects of the measures were explained in detail, including the timing of legal amendments, imposition, and grace periods, no specific targets or roadmaps were mentioned regarding supply plans beyond the statement that they will be 'prepared.' Only the expansion of special supply for newlyweds and first-time homebuyers was presented as a concrete plan; otherwise, it is almost a blank slate.

Experts respond that since plans have already been made to supply 300,000 households in the metropolitan area by 'gathering every possible resource' from idle lands such as the Yongsan Railroad Maintenance Depot and Seongdong Detention Center, there is little idle land left to be found. Policies such as utilizing vacant commercial and office spaces and high-density development in city centers have been announced before, but evaluations suggest these have not been properly implemented due to various issues.

Moreover, there is no suitable brush to paint on the blank slate. "We are not considering the 4th New Towns or Greenbelt releases," said Kim Heung-jin, Director of the Housing and Land Office at the Ministry of Land, Infrastructure and Transport, in response to reporters' questions after the announcement. This is the exact opposite of the decision to supply the 3rd New Towns, which involved many already damaged Greenbelt areas. Instead of a large brush, they intend to fill the blank slate with a thin mechanical pencil.

Regulations on reconstruction and redevelopment, which account for most of the housing supply in Seoul, remain unchanged. Many areas, despite being 40 to 50 years old, are still bound by regulations, deepening conflicts among residents. Nevertheless, the government still says it will ease regulations only in a few selected areas under the name of 'public' projects, fearing housing price stimulation. While claiming there is 'no land,' they are actually restricting the land that could supply housing themselves.

History shows that during periods of rapid housing price increases, what ultimately brought prices down was large-scale supply in appropriate locations. The 2 million housing units supplied under the Roh Tae-woo administration and the 'half-price apartments' under the Lee Myung-bak administration are examples. Although 22 measures have been announced under this government, housing prices have repeatedly risen because there was no 'supply.' It is time to pause briefly and carefully review what effective supply expansion measures are from the starting point.