Lee Jae-myung: "Homes in Gyeonggi Province's Three New Cities Should Be Supplied as Basic Housing"

[Suwon Ilbo=Reporter Park No-hoon] Gyeonggi Province Governor Lee Jae-myung has reiterated the necessity of basic housing.

Governor Lee stated on the 28th through his SNS that after explaining the negative effects of housing sales, "A nation that hopes for luck rather than hard work has no future. Why do we continue lottery-style housing sales that drive the entire nation into speculation?" He then conveyed, "Under the speculative frenzy, no matter how much housing is supplied, not only does housing price stabilization fail to occur, but speculative assets increase and the speculative frenzy grows."

He continued, "The answer to housing policy is all contained in President Moon Jae-in's words: 'We will prevent people from making money through real estate. We will supply large quantities of affordable long-term rental apartments (lifetime housing) of good quality in desirable locations where anyone, even the middle class, can live comfortably with cheap rent for life.'" He then stated, "Unless there are special reasons, housing in the three new cities within Gyeonggi Province should be supplied as basic housing, not lottery-style sales. If we make only minor institutional improvements such as changes in floor-area ratio and financial systems, and allow public housing acquisition corporation operations, construction costs are so low compared to market prices that we can sufficiently supply homes to those without housing with almost no fiscal burden."

Governor Lee also said, "If we reduce housing costs through basic housing and increase consumer spending capacity, sustained economic growth and prevention of economic deterioration become possible through expanded demand and economic circulation," and "Among the state's three duties of national security, order, and people's livelihood, sustained growth, which is the core of people's livelihood, is the starting point for solving all problems in our society such as youth unemployment, low birth rates, fiscal shortages, and insufficient welfare," reemphasizing the necessity of basic housing.

The following is the full text of Governor Lee Jae-myung's SNS post.

<End Ruinous Lottery Housing Sales and Shift to Basic Housing>
We are entering an era of national lottery housing subscriptions where people of all ages roam across the country for apartment subscriptions.
Recently, subscription rates for apartments in Gwacheon, Gyeonggi Province reached 1,800:1, and after subscriptions ended, jeonse deposits plummeted by hundreds of millions of won as people moved out.
In the past, people subscribed through address fraud, but as Gyeonggi Province conducted full-scale investigations of subscription recipients, identifying address fraudsters and forged subscription documents and imposing criminal penalties and canceling sales, people have actually moved to subscribe, and when subscriptions ended, they moved to other subscription areas.
With speculative frenzy pushing up housing prices, apartments originally built at 300 million won in areas including greenbelts are sold at 500 million won through presale price caps, creating hundreds of millions of won in premiums. Once you win, you gain subscription profits that you could not otherwise earn in a lifetime, turning real estate speculation, once the exclusive domain of the wealthy, into an everyday activity for all citizens.
A nation that hopes for luck rather than hard work has no future. Why do we continue lottery-style housing sales that drive the entire nation into speculation?
Because limited housing is permitted to be purchased and accumulated like manufactured goods, and because financial institutions lend unlimited amounts for purchasing homes even for non-residential purposes, housing has become a speculative tool for the wealthy, and the housing market has become a speculation venue. Under the speculative frenzy, no matter how much housing is supplied, not only does housing price stabilization fail to occur, but speculative assets increase and the speculative frenzy grows.
The answer to housing policy is all contained in President Moon Jae-in's words: "We will prevent people from making money through real estate. We will supply large quantities of affordable long-term rental apartments (lifetime housing) of good quality in desirable locations where anyone, even the middle class, can live comfortably with cheap rent for life."
It is not too late even now.
While suppressing housing prices and the number of properties held is important, protecting actual housing and restraining speculation is more critical. We must thoroughly recover unearned income through taxation to make speculation meaningless, and restrict financial benefits for purchasing non-residential housing.
Apartments on public land should not be sold through lottery subscriptions as speculative instruments but should be supplied by the public as basic housing (long-term public rental or land-leasehold resale-condition public sales housing) so that citizens can live comfortably for life.
Unless there are special reasons, housing in the three new cities within Gyeonggi Province should be supplied as basic housing, not lottery-style sales. If we make only minor institutional improvements such as changes in floor-area ratio and financial systems, and allow public housing acquisition corporation operations, construction costs are so low compared to market prices that we can sufficiently supply homes to those without housing with almost no fiscal burden.
Purchasing and accumulating housing as speculative assets targeting those without housing, rather than for residential purposes, is neither just nor, at minimum, recommendable. Even in the Joseon Dynasty, hoarding of necessities was prohibited.
In a nation where housing supply rates hover around 100 percent, the dream of half the population is homeownership, young people forgo marriage and childbirth due to lack of housing, consumption declines due to high housing prices causing national economic stagnation, and all citizens abandon work to chase lottery housing sales across the country—this is the path to national ruin.
#BeginWithEconomyEndWithEconomy #BasicHousing is also economic policy.
High housing prices not only aggravate asset polarization and cause national suffering but also reduce consumption through excessive housing costs, becoming a cause of economic recession. If we reduce housing costs through basic housing and increase consumer spending capacity, sustained economic growth and prevention of economic deterioration become possible through expanded demand and economic circulation. Sustained growth, which is the core of people's livelihood among the state's three duties of national security, order, and people's livelihood, is the starting point for solving all problems in our society such as youth unemployment, low birth rates, fiscal shortages, and insufficient welfare.