Repeated reversals on policies befuddle, annoy public
President Moon Jae-in has stepped in to prevent any further entertainment of the idea of easing Seoul's “greenbelt” zones to supply more housing. The upside to the President's action is that there will be no more dizzying disputes among Cabinet and ruling party members on the matter. The downside is that such public disarray only deepens the public distrust of the administration's housing policies.
From Deputy Prime Minister and Finance Minister Hong Nam-ki to presidential chief of staff for policy Kim Sang-jo, several senior officials said last week that the easing of Seoul's greenbelt restrictions was on the table. Then just as many including Rep. Lee Nak-yon of the ruling Democratic Party of Korea and Gyeonggi Governor Lee Jae-myung, two presumed presidential hopefuls, said the opposite. This half-baked policy dispute resulted in driving up land prices in the greenbelt neighborhoods. Designated to allow open spaces around the city, the greenbelt zones account for 25 percent of the area of the capital.
Just the fact that the greenbelt zones were put on the table to increase the housing supply shows how pressing the issue is. Nevertheless, the decision to preserve them was the right one. Big cities need green spaces. Also, it is as the President said: the greenery should be preserved for future generations.
Now with one possible housing site crossed out, the government has to come up with alternative ones including publicly owned sites such as a golf practice range in northeastern Seoul. Experts have estimated that site could yield 20,000 housing units. They are also touting expanding the permissible floor area ratio for reconstruction and redevelopment of dilapidated apartments. Expediting the development of new satellite cities may well be in the pipes. These are, however, options that also have their own risks; they should be closely analyzed and studied.
It's unfortunate to see the government's good intentions to hold down housing prices only triggering alarm for Korea's present and future homeowners. But the administration would do well to determine why apartment prices have increased at their fastest speed in nearly 30 years in the past three years of President Moon's tenure, as shown by a report from the civic group the Citizens' Coalition for Economic Justice, Tuesday. What should remain in policymakers' minds is that people equally want to live in an area with good schools, jobs and public transport.
Undeniably, there is also the reality that real estate assets remain the preferred destination for the market's estimated 1,000 trillion won in excess liquidity, and this too must be addressed.