[Editorial] The Effectiveness of the "Supply Now" Measures Excluding Redevelopment and Reconstruction

The government announced the "Housing Rapid Supply Plan for Stabilizing the Jeonse and Sale Markets" on the 13th to supply more than 230,000 households in the Seoul Capital Area, including Namyangju, Gyeonggi Province. This is the third supply measure under the Lee Jae-myung administration. As the name of the measures suggests, it emphasizes the speed of supply rather than the volume itself, and its feature lies in supporting private sector supply. However, since major measures related to redevelopment and reconstruction are missing and the details of tax reform improvements remain unclear, there are limits to calming the triple strong trend of house prices, Jeonse prices, and rental prices.

The government first plans to supply 27,000 households in Gangseo-gu, Seoul, and Namyangju and Gwangju, Gyeonggi Province. The plan involves utilizing some green belt areas and parks, with construction scheduled to begin after 2029. Construction in Gwacheon, Gyeonggi Province, and Taereung, Seoul, is set for 2029, one year earlier than originally planned, and the government stated that other sites will also commence construction within 2030. The plan to support the construction of 234,000 housing units in Seoul redevelopment and reconstruction areas by increasing PF (Project Financing) guarantees for private construction companies to an average annual amount of 28.7 trillion won and providing early-start incentives is desirable. This is because it recognizes the private sector as a key player in supply. However, even if new cities are built, the principle that housing must be constructed where demanders want and what they want must be upheld.

Areas that had attracted attention, such as Seoul Yongsan Children's Park, Seogok-dong in Seocho-gu, and Naegok-ji-dong in Gangnam-gu, were not included in this supply plan's target areas. This appears to be an awareness of the backlash from Seoul City and residents of nearby areas, and disagreements between the central government and local governments over supply measures continue. Since both the government and Seoul City recognize the necessity of "supply now," they must work together to ensure that all measures, including revitalizing maintenance projects and expanding housing supply through green belt utilization, are included.

Even if the government's supply measures are fully finalized, considering the construction start and completion periods, it will take at least five years or more. Another supply method is to induce housing transactions by lowering transaction taxes even while raising holding taxes. It is also regrettable that promotion measures for redevelopment and reconstruction were omitted from the supply plan. There is a need to relax the system of recovering excess profits from redevelopment members, which imposes burdens on members, and to activate redevelopment through deregulation of floor area ratios and restrictions on the transfer of member status. In particular, urban redevelopment and reconstruction are the most realistic means to supply high-quality housing in areas where there is high demand for living close to workplaces.