From the 4th, Buying a House Means 'Cash Settlement'?… Controversy Over Property Rights Infringement

2·4 Real Estate Supply Measures "Concerns Over Excessive Retroactive Application"

On the afternoon of the 31st of last month, Seoul viewed from Namsan is filled with apartments.

The government's 2·4 supply plan has sparked controversy over retroactive application. This is because the starting point was set as the 'date of the plan announcement,' with the decision not to grant priority supply rights (residency qualifications) to those who acquire real estate in public-led maintenance and development project areas. The market has raised concerns that this could excessively infringe on fundamental rights such as private property rights and freedom of residence relocation.

The Ministry of Land, Infrastructure and Transport announced the public direct implementation maintenance project and the urban public housing complex project plans the day before, stating that those who acquire real estate in areas where these projects are implemented after this date will not be granted priority supply rights for housing or commercial spaces. Priority supply rights will also not be granted in cases of property division or separate ownership changes.

Accordingly, those who purchase new housing within the project area after this date will be subject to cash settlement. The Ministry explained that this measure is intended to preemptively block speculative demand inflows driven by development benefits.

The problem lies in the fact that the criteria for cash settlement target members differ from those of general maintenance projects. In general maintenance projects, the designation date of the maintenance planned area is used, but this plan has moved it forward to the announcement date. This means that if someone unknowingly purchases a house without knowing whether the project will proceed and the area is later designated as a maintenance zone, they could be forced to leave without recourse. In fact, the Ministry stated in the plan announcement that this criterion would apply to the 'public direct implementation maintenance project' and the 'urban public housing complex project,' but no specific consultations with residents have yet taken place.

There are also concerns that this policy could suppress even normal transactions. An industry insider said, "The government's excessive anti-speculation measures have only increased uncertainty in transactions," adding, "If an area is designated as a maintenance zone, people could be forced out of their current homes, let alone buy new ones. Who would recklessly buy a house under such conditions?" Even the possibility of designation turns the housing into a troublesome asset that cannot be sold or bought. Lim Byung-chul, Senior Research Fellow at Real Estate114, said, "This priority residency right criterion excessively restricts citizens' property rights."

Concerns were also raised about the side effects of lowering the resident consent requirement for project promotion from three-quarters to two-thirds. This increases the likelihood that those who do not agree to redevelopment or reconstruction could still become cash settlement targets. There are worries that this could amplify conflicts such as lawsuits based on vested interests during the project promotion process, ultimately delaying the project.