Heon-dong Kim, head of the Real Estate Construction Reform Movement, the Citizens’ Alliance for Economic Justice, pointed out a blind spot, saying, “The possibility of realization is insufficient.” The interview with General Manager Kim, held on the 9th, was summed up in one question and one answer format.
“With one year left, supply 830,000 units? Will only supply 8,000 units?”
-The government announced the 2.4 measures. There are many reviews that it is a quantity that exceeds market expectations.
“There is no possibility of realizing the supply of 830,000 units in the first place. According to the data provided by Assemblyman Ha Tae-kyung, only 170,000 houses have been supplied by SH Corporation over the four years of the current government. The core subject of this 2.4 measure is the SH Corporation. He is the Minister of Land, Infrastructure and Transport Byun Chang-heum, who was the President of the Ministry of Land, Infrastructure and Transport. It is expected that the supply will be limited.”
-It seems that it has accepted the market’s demand for supply expansion by turning from the current stance.
“In the end, the project went back to a civil engineering project focused on redevelopment and reconstruction. The basis of the 2.4 plan is to demolish 500,000 houses and build 800,000 new ones to supply 320,000 units. Most of the housing types in the areas subject to demolition are multi-family villas and detached houses. As a home, there are far more tenants than homeowners, the business is delayed for four years because tenants cannot be forcibly removed, and the government introduced the 3rd Lease Act, such as the right to apply for contract renewal, to protect tenants, without a long-term vision and context. I was caught in my trap after trying to take measures.”
-Is it wrong from the process of establishing the countermeasure?
“The problem is that there was no meticulous pre-planning. The large-scale supply should not be publicly announced and proceeded. The process of selecting a site and carefully reviewing the actual state of lease in the redevelopment area should be preceded. In rational redevelopment, the public step by step lands. A mid- to long-term plan is needed to secure a site by purchasing it, but the progress of the 2.4 plan is the opposite, and the site is selected after the preliminary announcement, and the supply plan is announced in a way that requires follow-up measures.
The detailed plan is also a problem. The method of not granting priority supply rights to new buyers in order to block speculation is also a serious infringement of property rights. It cannot be applied in situations where the redevelopment area has not been announced. Regardless of the purpose of the countermeasure, tenants and natives will be driven out of their residences, and real estate speculators will rage. It is for this reason that the backlash arises when the Dong Auto Redevelopment is announced.”
-The government also came up with a plan to expand the short-term supply of public leases for single-person households.
“At the moment when the housing price rises, the purchase of Gosiwon and the like to secure public rental housing means that we will give preferential treatment to rental business owners who own 1.9 million houses. The Moon Jae-in government has provided various preferential treatments to the rental business registrants. It is estimated that 1 million houses have been purchased by renters who have been receiving preferential treatment for 4 years, of which 500,000 are multi-family villas and Gosiwons. It is merely helping to sell the property.
This plan is also disadvantageous to existing tenants living in Gosiwon. The remodeling of Gosiwon is also concerned about the infringement of housing rights as tenants must be eviction first. This is a conflict between the existing countermeasures to protect the tenancy period according to the right to apply for contract renewal and the 2.4 countermeasures.”
-Do you think there is a problem with the 3rd Lease Act (the right to apply for contract renewal, the monthly tax limit, and the monthly rent report system)?
“The 3rd Lease Act itself is not a problem. The timing and order of introduction are wrong. The right to apply for contract renewal and the monthly rent to cheonsei limit system are already in effect, while the rent to cheonsei system is applied from June. In order not to do so, it was necessary to prioritize the identification of the status of leases through the reporting system.. This is why the supply measures and the right to apply for contract renewal conflict are for this reason. I was able to reduce the problem.”
-It has been announced that the public will directly lead the maintenance business and other sectors. Isn’t there a connection with the expansion of public influence in the market that has been argued so far?
“The gist of this supply plan is to provide preferential treatment to change the land use from residential to commercial districts by easing the floor area ratio by increasing the species. The public is only in the role of securing land and easing regulations. The implementation and construction of redevelopment, which is the core, is the responsibility of large construction companies. Unless they directly supply construction to the land purchased by the public, the profits generated in the real estate market will go to the construction companies.”
“You need the right supply, not a lot of supply”
-What is the plan for the stabilization of the house price that Director Kim thinks?
“The answer is not’many supply’, but’right supply’. Large-scale supply of hundreds of thousands of houses is not necessary. If the public buys land, such as forests, and consistently supplies low-priced apartments, the house price can be stabilized. It is an alternative to supplying 2000 half-price apartments sequentially to each region per month. If a 30-pyeong apartment is supplied monthly for 400 million won in Gangnam, 350 million won in Gangbuk, and 300 million won in Gyeonggi Province, the price of neighboring apartments can be expected to decline.”
-Is it possible to realize a half priced apartment?
“Land lease could be an option. The Seoul Medical Center, a public site owned by the city of Seoul, was purchased for 200,000 won per pyeong in the 1970s. If you set an appropriate rent for publicly owned land and sell the building at cost, the market price is half price. The supply of apartments at the level is possible Existing housing prices are affected by new housing prices 90% of new apartments are currently built on publicly supplied housing sites, of which 300,000 are sold directly by the public such as LH. It is about 20,000 of them. The rest are giving business rights to large corporations. If the public has the will to sell it, the expansion of land rental apartments is a policy that can be realized.”
-Are there any solutions to the soaring jeonse prices and the lack of jeonse sales?
“The rent price for cheonsei is not an area that the government can control artificially. Therefore, providing housing allowances to solve the housing shortages of current rental end users is a short-term alternative. Housing benefits of about 300,000 won per month are provided to tenants in a lump sum. As the rent to cheonsei limit system is in effect, the problem of price adjustment in the market will be less.
In the long term, it is necessary to intensively supply public sales and public leases by mixing 30 pyeong public housing and one-room small housing. There will be a point in time when real estate prices will plummet. The government or the Seoul Metropolitan Government can secure the quantity by purchasing the housing site. If you secure enough supplies and supply houses first for long-term homeless people, the jeonse price will also stabilize.”
Additional text | I worked as an intern at Kyungsilyeon.