The government decided to relax various laws related to reconstruction and redevelopment standards in order to increase the supply of apartments in downtown Seoul. This is a legislative follow-up measure for the ‘8·8 real estate measures’ aimed at stabilizing Seoul’s housing prices by releasing the greenbelt and supplying apartments. The opposition party’s cooperation is a hurdle that needs to be overcome.
On the 23rd, Kim Beom-seok, the first vice-minister of the Ministry of Economy and Finance, held the 5th real estate market and supply situation check task force meeting at the government Seoul office with the Ministry of Land, Infrastructure and Transport and the Ministry of Public Administration and Security to review the legislative plans for the 8·8 real estate measures. The core of the 8·8 real estate measures is to release Seoul’s greenbelt after 12 years and relax reconstruction and redevelopment regulations to stabilize housing prices. To achieve this, the government announced that it will propose legislation and amendments to the law by next month.
The government also announced that it will promote the enactment of a ‘special law on promoting reconstruction and redevelopment projects’ that raises the maximum floor area ratio for reconstruction and redevelopment area improvement projects for a temporary period of 3 years by 30 percentage points. In addition, they plan to enact the ‘Real Estate Development Business Management Act’ to expand the target of the project financing (PF) adjustment committee to private development projects.
In order to normalize the non-apartment market, the government decided to ease the acquisition tax reduction for small construction companies. The deadline for the acquisition tax and property tax reduction for registered rental business operators will be extended from December this year to December 2027. To achieve this, the government plans to propose amendments to the Special Tax Limitation Law and Local Tax Limitation Law by next month.
Out of a total of 49 detailed tasks of the 8·8 real estate measures, 18 are legislative matters of the National Assembly, but the greenbelt release is a matter of enforcement regulation amendment. The government plans to release Seoul’s greenbelt through the enforcement regulation amendment and create a new site for 80,000 households. Releasing the greenbelt in the Seoul metropolitan area for housing supply purposes is the first time since the Lee Myung-bak administration in 2012, after 12 years.
Although the government expressed its intention to seek the cooperation of the National Assembly for follow-up legislative measures, the main opposition party, the Democratic Party of Korea, criticized the government’s greenbelt release policy and there is a possibility of non-cooperation with the government’s 8·8 measures follow-up bills. Democratic Party lawmaker Moon Jin-seok, the secretary-general of the National Assembly’s Land, Infrastructure and Transport Committee, criticized the government, saying, “Releasing the greenbelt, which the government considers core, cannot solve the shortage of supply, and the government’s measures do not consider the regions.” He also said, “Requiring unconditional cooperation from the opposition parties after announcing a policy that cannot stabilize housing prices and kills local regions is not just incompetent but also arrogant.” A Democratic Party official conveyed that some lawmakers with constituencies outside the capital area are concerned that the government’s measures will deepen regional disparities.
On the same day, Seo Wang-jin, the chairman of the Policy Committee of the Justice Party, urged the government at the party’s general meeting to withdraw the greenbelt development policy that promotes speculation and to focus administrative efforts on supplying housing that the middle class and ordinary people, including public housing, can afford.