Ministry of Land, Infrastructure and Transport: "50,000 Public Reconstruction Units Not an Excessive Number"... "Housing Price Target is Downward Stabilization"

Park Sun-ho, Vice Minister of Land, Infrastructure and Transport, Appears on tbs Radio

"Expecting 1/5 Participation in Planned Reconstruction Complexes"
"Concerns Over Excessive Rent Increases Are Exaggerated"
"No Disagreement with Seoul City"
"Goal Is Not Status Quo but Downward Stabilization"

Minister of Land, Infrastructure and Transport Kim Hyun-mi attended the full meeting of the National Assembly Land, Infrastructure and Transport Committee on the 28th of last month and is seen talking with Vice Minister Park Seon-ho./Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Lee Chun-hee] "We expect about one-fifth of the scheduled reconstruction complexes to participate. I do not think this is an excessive number." (Park Seon-ho, 1st Vice Minister of the Ministry of Land, Infrastructure and Transport)

Vice Minister Park appeared on tbs Radio's 'Kim Eo-jun's News Factory' on the 5th and said, "There are 93 scheduled reconstruction complexes in Seoul, totaling 260,000 households. Through the (high-density reconstruction) policy, about 50,000 additional households will be supplied."

The government announced the 'Plan to Expand Housing Supply in the Seoul Metropolitan Area and Surrounding Areas' during a briefing at the Government Seoul Office on the 4th, held by the Pan-Government Task Force (TF) for Expanding Housing Supply. A total of 132,000 new housing units will be supplied in the metropolitan area. In particular, the goal was set to supply more than 50,000 units over five years through 'public participation high-density reconstruction.'

Regarding this, Vice Minister Park explained, "Reconstruction projects usually take more than 10 years, but this policy will reduce the project period to less than half," adding, "Reconstruction associations often face internal disputes due to various corruptions and lack of transparency. By managing these transparently, we can instead contribute to the interests of the association members," emphasizing that this will provide sufficient incentives to the owners of reconstruction complexes.

He continued, "In cases of high-density urban development projects, a certain percentage is donated to provide rental housing for socially and economically vulnerable groups. This system is also practiced in countries like the United States," adding that it is part of the concept of 'inclusive urban planning,' a system aimed at enhancing social inclusiveness and integration.

Vice Minister Park also rebutted criticisms raised about the 'Three Lease Laws.' He said, "(Tenant protection measures) were late and the level of rights protection itself was low," and added, "In Europe, such as Germany and France, tenants can continue to reside if they wish, making the renewal claim right almost meaningless. The same applies to major cities like New York in the United States, which is considered the forefront of capitalism."

Regarding market concerns that the 1989 incident?when the lease contract period was extended to two years, causing a sharp rise in rent?might recur, he explained that these concerns were "exaggerated and not based on facts." At that time, during the 'three lows boom,' inflation was high and land prices rose by 30-40%, and "unlike now, the two-year extension measure was not applied to those who already had existing lease contracts." This indicates that sufficient protective measures have been put in place.

"No disagreement with Seoul City"... "Housing price goal is downward stabilization"

The government is introducing a public reconstruction system as part of expanding supply to stabilize the real estate market, and will significantly relax floor area ratio and height restrictions for reconstruction apartments in Seoul. Alongside this, land development such as the Taereung Golf Course site in Nowon-gu, Seoul, will be pursued to supply a total of 132,000 new housing units. The photo shows the city center view from Lotte World Tower in Songpa-gu, Seoul, on the 4th. Photo by Moon Honam munonam@

Vice Minister Park also addressed the controversy over disagreements with Seoul City regarding high-density reconstruction and criticism that "although it was emphasized that supply was not insufficient, supply measures are being announced consecutively."

He dismissed this by saying, "In conclusion, there is no difference between the positions of Seoul City and the government," adding, "It was distorted during the explanation process." He also said, "The belief that supply is not insufficient remains, and this is correct," and added, "Housing supply is a project that takes three years, or up to six to seven years, so preparations must be made now for sufficient supply after 2023."

Finally, Vice Minister Park predicted that with the significant tax increase on short-term investments passed by the National Assembly on the 4th, "the incentive to own multiple homes will decrease." Accordingly, he said, "A considerable amount of disposal volume will come out by June (next year)," and added that by continuously supplying housing units for actual demand at affordable prices, "the goal is not to maintain current housing prices but to stabilize them downward, creating conditions where actual demanders can prepare housing with reasonable options."