Won Hee-ryong: "Not Simply Repealing the Lease 3 Laws, but Seeking Better Ways to Protect Tenants"

Won Hee-ryong, Minister of Land, Infrastructure and Transport, is explaining real estate policy at the 'Kwanhun Club Debate' held at the Press Center in Jung-gu, Seoul on the 29th. Photo by Kang Jin-hyung aymsdream@

On the 30th, Won Hee-ryong, Minister of Land, Infrastructure and Transport, stated that the call for the abolition of the three lease laws (Jeonwolse Reporting System, Jeonwolse Rent Cap System, and Contract Renewal Request Right System) is not simply about eliminating the system but about creating measures to better protect tenants.

Minister Won said during a meeting with reporters at the Government Complex Sejong that morning, "The abolition of the three lease laws does not mean a return to the pre-three lease laws era, but rather signifies the intention to develop more realistic measures that can function in the market and enhance protection effects."

He explained, "Among the current 'hasty' three lease laws, especially two of them, it is irresponsible to claim that everything necessary for tenant protection has been done with these. It means that a major revision close to abolition is needed to change the very concept of the lease law so that tenants are better protected and the system works well."

Earlier, at a discussion hosted by the Gwankun Club the previous day, Minister Won mentioned, "The two laws, Jeonwolse Rent Cap System and Contract Renewal Request Right System, have significant side effects and should be abolished, and a completely new method to guarantee tenants' housing rights must be prepared." He added, "If the lease period extends 2 years + 2 years up to five times, progressive tax reductions can be applied so that property tax approaches zero. Shouldn't this be designed in connection with the lease period?"

Minister Won pointed out, "Even when renewing for 2+2 years, landlords evict tenants by claiming they will move in themselves, use loopholes, and disputes arise. Also, after the 2+2 years end, not only do rents increase further, but there are side effects of raising rents significantly in advance." He explained, "If extended four times for 2 years + 2 years, that totals 10 years, which can be regarded as equivalent to registered rental housing, and benefits can be provided accordingly. We want to design systems that stabilize the residence period while providing incentive structures."

Regarding the '5% cap rate' under the Jeonwolse Rent Cap System, he said, "The government restricts it to 5% and the Jeonwolse conversion rate to 2.5% without providing anything, so landlords raise Jeonse deposits to increase monthly rent income, which in turn raises housing prices." He added, "We will release objective review materials on actual cases and economic principles and propose alternatives."

Minister Won also clarified his remarks suggesting that the policy of relocating public institutions to local areas had failed, saying, "That is not what I meant at all."

In his keynote speech at the discussion the previous day, he said, "The uniform dispersal policy of forcibly relocating metropolitan facilities to local areas has failed, and the gap between the metropolitan area and local areas has deepened," which led to interpretations that the government might be abandoning the relocation of public institutions.

Minister Won emphasized that the plan to further relocate metropolitan public institutions to local areas will proceed as planned. He said, "It is impossible and undesirable to halt innovation cities," and added, "We are continuing additional public institution relocations while organizing the overall system and context."

He pointed out, "Relocating only public institutions has many limitations in achieving sustainable regional growth and internalizing growth engines," and said, "We need to form proper growth centers in the five major metropolitan hubs, provide conveniences such as high-density development and capital investment, and network the surroundings so that regions can grow together."

Regarding the lifting of regulatory zones in some areas at the first Housing Policy Deliberation Committee of the Yoon Seok-yeol administration held that day, he hinted at a gradual easing of regulations. He said, "Given recent interest rate hikes and the accumulation of unsold housing, I think regulations need to be eased," and added, "The lifting of adjustment target areas directly affects sale prices, so it should proceed gradually considering various circumstances."