President Moon Jae-in officially apologized for the housing issue through a press conference with the New Year’s Day and announced that he will focus on expanding the supply of housing quickly. The new Minister of Land, Infrastructure and Transport Byeon Chang-heum announced the announcement of supply measures before the Lunar New Year holiday, and is expressing confidence in the supply of housing in the city center.
January 19, 2021 Press conference in front of Seoul Government Complex against supply measures that encourage speculation <사진=참여연대>
The government dismissed the supply shortage theory just a few months ago from the beginning of the launch, saying,’The cause of real estate overheating is not a shortage of supply’, but as the public sentiment infested with real estate problems was not resolved, it was overwhelmed by the supply theory of marketists and made a breakthrough by expanding supply. I am trying to find.
In addition, the government’s housing supply plans are pouring out ahead of the Seoul city’s by-election in the city where the real estate conflict is serious.
Indeed, the’Universalism of Supply’ that increases supply will solve all problems is striking.
The universal supply theory diagnoses that the cause of the rise in house prices is the shortage of supply. However, this diagnosis does not properly explain the reason for the rapid rise in home prices in recent years. The explanation of a sudden lack of home over the years is not valid. Rather, the supply of housing in Seoul and the metropolitan area in the last five years has increased more than in the previous five years.
It is common knowledge that the recent rise in house prices has been achieved by investing large amounts of money released on the market due to excess liquidity. In particular, as interest rates were cut twice due to COVID-19 last year, speculative demand for real estate increased further due to excess liquidity. In other words, it is not that the price of the house has risen due to a shortage of supply, but the price of the house has risen due to a sharp increase in speculative demand. After all, the housing supply theory is to order supply to meet speculative demand, which is a staple of real estate vested interests.
The direction of recent supply measures is also unavoidable. Although the government’s supply plan to be announced at the time of the Lunar New Year is not known in detail, Minister Byun Chang-heum’s supply plan, which is reported in the media, is known as high-density development through easing the floor area ratio of station areas, semi-industrial areas, and low-rise residential areas. In addition, by saying that “the people will focus on supplying pre-sale housing in the city center that the people want,” we will not worry about retreating to pre-sale housing in the direction of supplying public housing in connection with the existing public rental housing or land lease and redemption conditions. You can not.
In addition, the conservative opposition party aimed at the by-election of the mayor of Seoul, through the promotion of private-led redevelopment and reconstruction, and pledges to reduce the real estate taxation and high-density urban development, further inspire speculation through civil engineering. Redevelopment areas, semi-industrial areas, and low-rise residential areas where high-density development in the station area is expected have already been a boon for development. The supply plan to rapidly promote large-scale supply is virtually no different than to push the entire city center back into an era of development frenzy.
Our residential civic groups firmly oppose the universal theory of housing supply that promotes speculation, as it will exacerbate the housing problem for the common people. What should be supplied for the stability of the common people’s housing is not a pre-sale housing for speculative demand, but a quality public rental housing. No matter how much housing is supplied and housing prices stabilize, the majority of homeless people find it difficult to buy a house in downtown Seoul. The supply of quality public rental housing in the city center should be given priority to ensure a stable residence even without owning a house. In addition, land for self-contained consumers is owned by the public, and development profits must not be privatized, such as a method of combining land rentals sold to the public and redemption conditions when sold.
Now, the Moon Jae-in administration has only one year left. The rapid housing supply policy at the end of the regime gives bad signals to the market and only encourages speculation. We hope that the government’s supply policy, which will be announced at the time of the Lunar New Year, will not be as ordered by real estate vested interests and marketists who believe in universal supply.
Press release [원문보기/다운로드]