Opposition Party Addresses Jeonse and Monthly Rent Crisis... Purchasing Hotels and Commercial Buildings to Supply Rental Housing
Lee Nak-yeon: "Housing Issues Deeply Painful and Regrettable to the People"
Yoo Seung-min: "Converting Hotel Rooms as Rent Measures... Absolutely Outrageous"
[Asia Economy Reporter Han Seung-gon] The Democratic Party of Korea is reportedly considering measures to purchase hotels within Seoul and convert them into rental housing as a countermeasure against soaring jeonse (long-term deposit lease) prices, sparking criticism from some quarters.
Although the plan is to renovate hotel rooms for residential use, critics argue that a home is not just a place to eat and sleep but should provide comfort, which they say is not achievable in this case. Additionally, some express concerns about the fact that living in hotels might become publicly known. On the other hand, there are opinions that, in urgent situations, people might have no choice but to live in hotel rooms.
On the 17th, Lee Nak-yeon, leader of the Democratic Party, stated at a Kwanhun Club invitation debate held at the Korea Press Center in Jung-gu, Seoul, in response to questions about the government's jeonse and monthly rent measures, "The plan includes converting officetels, commercial buildings, and hotels into residential use and offering them as jeonse or monthly rentals."
The plan involves remodeling buildings previously used for commercial or office purposes into rental housing and supplying hotel rooms that have come onto the market due to economic downturns caused by the COVID-19 pandemic as residential units.
According to the Korea Hotel Association, as of June, about 50 out of approximately 460 hotels in Seoul have been closed since the COVID-19 outbreak. The plan also includes securing vacant housing in the metropolitan area through the Korea Land and Housing Corporation (LH) and Seoul Housing and Communities Corporation (SH) to offer as jeonse or monthly rentals. The ruling party and government plan to announce these jeonse measures on the 19th.
On the same day, Lee apologized for the nationwide jeonse crisis. He said, "I sincerely apologize to the citizens suffering from housing problems," adding, "The explosive increase in single-person households due to household separation was a major oversight, as neither the government nor Seoul City had adequate preparations."
The issue lies in the critical opinions regarding the plan to convert hotels into residential units among various measures to resolve the jeonse shortage. Kim, a company employee in his 40s living in Seoul on a jeonse lease, said, "It is a very wrong idea," raising his voice, "Although they say they will convert hotels into homes, ultimately, the place where I eat and sleep is still a hotel. My acquaintances mockingly say, 'Isn't it room 705 of OO Hotel?'"
He added, "It seems the government simply thinks of a house as a physical space to eat and sleep," criticizing, "A home is a place where you want to rest after work and invite friends over for a meal." He further condemned, "Even if they renovate hotels, they are planning to convert studio rooms, which are essentially very small two-room units."
Lee, a university student in his 20s, said, "If there really is nowhere to live, I could live in a hotel on a jeonse or monthly lease, but I think people around me would look at me strangely," lamenting, "Some people mock even those living in rental apartments, so how would they treat someone living in a hotel?" He also pointed out, "What about the hotel staff? Would I have to see the same faces every day living in the same hotel? It's a bit absurd."
On the other hand, there are differing opinions. Park, a worker in his 40s, said, "There is criticism about converting hotels into residential units and offering them as jeonse or monthly rentals, but if there is nowhere to eat and sleep immediately, wouldn't it be anywhere, including hotels?" He added, "Honestly, it sounds like a complaint from someone who is well off."
Meanwhile, criticism continues in the political sphere regarding the Democratic Party's plan to offer hotel rooms as jeonse or monthly rentals. Yoo Seung-min, a former member of the People Power Party who recently hinted at running for president to correct real estate policies, wrote on his Facebook on the 17th, "It's outrageous to present converting hotel rooms into residential units as a measure," and criticized, "Dismiss all responsible people in the Blue House and government and reorganize the team with people who will implement new policies."
Regarding Lee Nak-yeon's apology related to real estate measures, he said, "If the ruling party leader sincerely reflected that it was a 'painful mistake,' then reexamine the 23 real estate measures that caused this painful mistake from the beginning."
He also urged, "Abolish all policies that have destroyed the housing market ecosystem," and "First, restore the three lease laws passed solely by the Democratic Party in July to their original state." He continued, "Revive the function of the private market, which has supplied most rental housing," and "Prepare measures to dramatically increase housing supply in the metropolitan area by easing redevelopment and reconstruction regulations and supplying land."
Regarding public rental housing, he said, "The government should step up for those who are economically struggling to the point that even jeonse or monthly rentals are hard to find," and "Instead of only regulating housing finance, expand jeonse deposit loans and mortgage loans to ordinary citizens."
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