[Desk Column] The Butterfly Effect of LH Speculation Grown by the 'Mouth'

Jung Doohwan, Head of Construction and Real Estate Department

Speculation on land in planned new towns by public officials and employees of public enterprises is shaking the landscape of the April 7 by-elections. Despite the government’s own declaration of a ‘war against speculation’ with slogans like ‘rooting out the problem’ and ‘utter ruin,’ and its all-out efforts to manage the situation, the turned-away public sentiment shows no sign of easily returning.

What is fueling the public’s anger so much? Let’s go back in time. There is a reason why the anger has not subsided even after nearly a month. Several key scenes have repeatedly raised the public’s anger gauge at critical moments.

The first scene that fueled anger was Minister of Land, Infrastructure and Transport Byeon Chang-heum’s evasive rhetoric. Although he repeatedly spoke of ‘integrity’ during his tenure as president of the Korea Land and Housing Corporation (LH), it was revealed that there were no measures to prevent employees from speculating using internal information, nor was there any investigation during the designation process of new towns. Furthermore, his statement that employees ‘probably did not invest knowing the information’ ignited the flames of anger. If he was unaware of the openly spread practices among employees during his tenure, that is a problem of ignorance; if he knew and neglected it, isn’t that dereliction of duty?

The second scene was the president’s belated apology. President Moon Jae-in spoke for the first time eight days after the incident occurred. He said, “If we prepare measures to prevent recurrence, we can turn this into an opportunity to move beyond anger toward a more transparent and fair society,” and “It is urgent to proceed with real estate supply measures without being shaken by this incident.” These words only brought greater anger. Eventually, it was only a week later that President Moon bowed his head and said, “I apologize for causing great concern to the people.”

The third decisive scene was taken by politicians?former prime ministers and ministers of justice. The public was stunned by their remarks. Lee Nak-yeon, the standing election committee chairman of the Democratic Party of Korea, said, “Former Minister of Justice Choo Mi-ae instructed the prosecution to investigate real estate crimes, but the prosecution did nothing,” oddly linking the LH incident to prosecution reform. Former Minister Choo also promptly pointed fingers at the prosecution, saying, “The prosecution bears the greatest responsibility for corruption in the real estate market.”

There is a common sentiment consistently flowing through these scenes that fueled anger: blaming others, not oneself. Despite releasing 25 consecutive measures over four years without curbing housing prices, the government still tiresomely shouts ‘war against speculation,’ shifting the blame for policy failures solely onto speculators.

Under this government, not only multi-homeowners but also the 2030 generation who bought homes with loans that drained their souls, fearing lifelong housing insecurity amid soaring prices, and even those who managed to secure a home on the outskirts of Seoul years ago and lived quietly, have been labeled speculators and hit with tax bombs due to the sudden rise in housing prices.

How many citizens can be happy about rising housing prices? Not only the homeless without a home but also those who now own a single home are not pleased with the rise in housing prices; instead, they face tax bills due to soaring official property prices and sigh with worry that their children may live as lifelong homeless.

Measures to eradicate speculation are a matter for later. For now, it would be best if those who only fuel the soaring anger would just keep their mouths shut.