Easing Regulations to Supply Various Types of Housing in Urban Areas
"Housing Sales with Jeonse as Part of the Housing Ladder"
Regarding Allegations of Preferential Treatment for Former Officials... "No Unfair Privileges"
Park Sang-woo, the nominee for Minister of Land, Infrastructure and Transport, expressed his determination to drive housing supply through deregulation. He also emphasized the need to abolish the residency requirement for houses subject to the price ceiling system and shared the view that so-called 'gap investment,' where buyers purchase homes with jeonse deposits, is part of the housing ladder.
Park Sang-woo, nominee for Minister of Land, Infrastructure and Transport, is smiling at the confirmation hearing held at the National Assembly on the 20th. / Photo by Hyunmin Kim kimhyun81@
On the 20th, during the confirmation hearing at the National Assembly Land, Infrastructure and Transport Committee, in response to People Power Party lawmaker Kwon Young-se's question about the government's housing supply plan facing setbacks, Park said, "We will quickly identify areas where housing supply is possible and prioritize deregulation in those areas. In particular, we will ensure that housing supply within urban areas is significantly increased."
The Yoon Seok-yeol administration announced a plan to supply 2.7 million housing units over five years, including 470,000 units in the first year, but the goal has become uncertain due to rising interest rates and increased material costs. In response, Park stated that he would first resolve supply-side difficulties to ensure various types of housing are supplied within urban areas.
He was also positive about revitalizing officetel construction. However, he maintained a cautious stance regarding tax relief related to whether officetels should be counted as housing units. This is also a key regulation in the non-apartment sector that Minister Won Hee-ryong has not addressed. The industry demands that officetels be excluded from the housing unit count to exempt multi-homeowners from heavy taxation.
Park said, "Regarding tax issues, the previous administration imposed taxes to curb speculative demand, so I believe various regulations on the supply side need to be swiftly eased," but added, "We need to be cautious about aspects that could stimulate demand."
He believed that the residency requirement, which has been criticized for undermining the effectiveness of easing resale restrictions, should be abolished. Park said, "The residency requirement was to prevent speculation in an overheated market. The market situation is no longer like that. Medicine taken in winter should be withdrawn quickly in summer."
He continued, "Some say buying a house with jeonse is speculation, but I think it is an important part of the housing ladder," adding, "When you cannot buy a house outright from the start, renting with jeonse and saving money to move in later is part of the housing ladder in our society."
The residency requirement mandates that residents of houses subject to the price ceiling system must live in the house for 2 to 5 years from the initial move-in date. After the government announced plans in January this year to ease resale restrictions and abolish the residency requirement, a bill to amend the Housing Act was proposed, but the bill is pending in the National Assembly amid opposition concerns that abolishing the residency requirement could encourage gap investment. On the 21st, the Land, Infrastructure and Transport Committee is scheduled to hold the last Land Act Review Subcommittee meeting of the year to discuss the bill to abolish the residency requirement.
During the hearing, allegations of preferential treatment were also raised regarding a company established by Park after resigning as president of Korea Land and Housing Corporation (LH). It was claimed that P&T Global received preferential treatment in winning an LH research project worth 278 million won last September, jointly with the Overseas Construction Association. It was also reported that the New Southern Economy Research Association, established by Park in 2020, received a total of seven advertising contracts worth 21 million won from LH.
In response, Park said, "People who have worked in public service or public institutions and retired also use their expertise and experience to continue their social activities. It is true that the company I was involved with won an LH contract, but it was through an open bidding process with fair evaluation." He emphasized, "If it were preferential treatment, there would have been unfair advantages or conveniences during the bidding process, but there was no such substantive issue."
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