Sangwoo Park, Minister of Land, Infrastructure and Transport, "Support Redevelopment and Reconstruction, Activate Long-term Rental Housing"

Held a Press Conference on the 5th to Present Five Major Policy Paradigms

"If House Prices Were Expected to Rise, Regulatory Easing Would Not Be Possible, Downward Stabilization"
"Government Should Not Intervene to Increase Rental Housing"
"Yongsan International Business District to Become a Model for Development Above Railways"

Sangwoo Park, Minister of Land, Infrastructure and Transport

Park Sang-woo, Minister of Land, Infrastructure and Transport, stated, "We will change redevelopment and reconstruction from being subjects of regulation to targets of support, and supply high-quality rental housing built by the private sector to transform the unstable jeonse system into a long-term rental system." Minister Park, who took office last December, announced five major policy plans to be pursued during his term at a Ministry of Land, Infrastructure and Transport press briefing held in Sejong City on the 5th. These include 'Support for Redevelopment and Reconstruction,' 'Activation of Rental Housing,' 'Connecting Cities with the Metropolitan Area Express Railway (GTX),' 'Railroad Undergrounding Projects,' and 'Overseas Urban Development Expansion.'

"A Good Timing to Change Redevelopment and Reconstruction Policies"

Regarding redevelopment and reconstruction, he said, "Redevelopment and reconstruction that supply housing in urban areas can solve both housing price stabilization and citizens' commuting time issues," adding, "In the past, regulations could not be easily lifted because housing prices were expected to rise, but now, with interest rates at quite a high level, it is a very good timing to change the policy direction on redevelopment and reconstruction."

Minister Park explained, "In a capitalist economy, recessions occur, and it is the government's role to reduce their amplitude. The government cannot and should not forcibly turn a recession into a boom," and added, "(Redevelopment and reconstruction) is not aimed at economic stimulus but is a measure to stabilize the market by removing unnecessary regulations."

He said, "If it were a period when housing prices were likely to flare up, we would not have been able to ease redevelopment and reconstruction regulations," and "I expect that housing prices will follow a downward stabilization trend for a considerable period, so there will be no sudden surge or plunge."

He continued, "If housing prices seemed to be stabilizing now, (when redevelopment and reconstruction measures were announced) prices would have bounced back like a spring," but "Now, with high interest rates, low economic growth, and already high housing prices, I think this is the right time to remove regulations."

"The Private Sector Must Supply Long-term Rental Housing"

Regarding the transition from the jeonse system to a long-term rental housing system, he pointed out, "Currently, about 55% of people live in their own homes, and the rest live in jeonse or monthly rent. It is true that living in monthly rent feels very unstable or unsatisfactory," and added, "Jeonse prices have risen a lot, making it difficult to prepare jeonse money when getting married, and living on monthly rent is almost like living on a bank loan."

He then said, "We need to change the housing paradigm from unstable jeonse to stable long-term rental," and "Since it can also reduce the risk of gap investment caused by jeonse, we are preparing a system to supply a large amount of high-quality long-term rental housing."

Regarding plans to activate long-term rental housing, Minister Park said, "It is sufficient for the government to 'no touch' the market," and "I think the best approach is neither to support nor intervene." He added, "Individual companies have land, and if they build facilities similar to silver towns there, I think there will be high demand for long-term rental housing."

He emphasized, "If the government supports, it controls rent increases, which undermines business viability," and "We need to create a path for various types of housing to be supplied through purely private rental operations."

Sangwoo Park, Minister of Land, Infrastructure and Transport

Railroad Undergrounding Supported by Both Ruling and Opposition Parties... Starting with Prepared Local Governments

Regarding GTX, he said, "By supplying metropolitan urban railways to connect cities, concentration will occur where it should, but dispersion will be more effective, strengthening the economy," and "It will create a competitive structure that gives the metropolitan area and large local cities the driving force to develop easily."

He likened the railroad undergrounding project to transforming "shacks beside the railroad tracks" into "beautiful buildings above the railroad tracks." He said, "The opposition party leader also announced it as a pledge, and the law was made with bipartisan agreement," adding, "It is a project supported by both ruling and opposition parties, so it has become a 'sure thing' for the responsible ministry."

He said, "We will proceed starting with regions that have high business feasibility." He added, "The law allows development projects not only for the railroad and stations but also for nearby areas," and "Local governments will lead the projects in the form of urban development, so we plan to implement pilot districts starting with well-prepared local governments."

Furthermore, he said, "We must extract as much development profit as possible from the railroad undergrounding project," and "The government will contribute national railways as in-kind capital, and the key for the private sector is how to minimize costs efficiently during construction." The Ministry of Land, Infrastructure and Transport plans to select an institution to establish a comprehensive plan and conduct a large-scale research project.

Minister Park expressed interest in the Yongsan International District development plan announced by Seoul City, saying, "It can serve as a model for development of areas above railroads," and "There is definitely development demand in major urban areas." However, he added, "If development focuses mainly on offices, businesses, and retail as in the past, there will be unsold units. Success requires deriving demand for high-end residences and recreational spaces and developing the space accordingly."

He also announced support for construction companies' overseas expansion. Minister Park said, "According to UN estimates, cities housing 100 million people per year will be needed worldwide in the future," and "Since domestic construction companies have built many cities and power plants, we will make overseas urban development demand a main market for Korean construction companies."