Park Restaurant Owner Faces Sudden 'Land Price Surge'... "Protecting Small Business Owners from 'Usage Fee Bomb'"

The Anti-Corruption and Civil Rights Commission and Ministry of the Interior and Safety Push to Establish Upper Limit Regulations on Usage Fee Increases in the 'Gongyujaesan Act'

The photo shows citizens walking under plum trees near Yeouido Hangang Park in Seoul on March 24th./Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Moon Chaeseok] Small business owner A operated a restaurant in a park owned by Asan City, Chungcheongnam-do, but faced a 'usage fee bomb' last October. When A tried to renew the permit for the use and profit of public property, Asan City demanded a usage fee of 50 million KRW, more than a 15% increase from the previous annual 42 million KRW, citing a rise in the official land price. The Anti-Corruption and Civil Rights Commission found that Asan City changed the land use from 'green area' to 'supply area' to increase the building coverage ratio of the park, causing the official land price to soar by 366.14% compared to the previous year, and recommended that Asan City recalculate and reduce the park usage fee.

To prevent small business owners and self-employed individuals using public property owned by local governments and education offices from facing such sudden shocks, the government has stepped in. On the 4th, the Anti-Corruption and Civil Rights Commission and the Ministry of the Interior and Safety announced plans to introduce a regulation capping the increase rate of public property usage fees in the 'Public Property Act.' This is to help small business owners and self-employed individuals maintain stable operations.

According to the Anti-Corruption and Civil Rights Commission, increases in public property usage fees are linked to the official land price of the land and the standard market price of buildings. Last year, the official land prices in Seoul and Busan rose by 13.9% and 9.4%, respectively, with a nationwide average increase of 9.4%, causing a sharp rise in public property usage fees, especially in the metropolitan area.

While official land prices are rising steeply, the law does not adequately protect public property users. The current Public Property Act includes provisions for reducing usage fees due to increases but does not have any regulations limiting the rate of increase. The Anti-Corruption and Civil Rights Commission noted that complaints related to usage fee hikes are frequent, and if official land prices continue to rise as they have, many users will inevitably face heavy burdens from increased fees.

Unlike the Public Property Act, the 'State Property Act' caps the maximum increase in state property usage fees and the 'Commercial Building Lease Protection Act' limits rent increases for private buildings to 5% compared to the previous year. The Public Property Act alone has not alleviated the burden on small business owners and self-employed tenants caused by soaring usage fees and rents guaranteed under other laws.

Gwon Geun-sang, Director of the Grievance Handling Bureau at the Anti-Corruption and Civil Rights Commission, said, "Small business owners and self-employed individuals using public property are facing economic difficulties due to COVID-19," adding, "We hope the Public Property Act will be amended promptly to support their business activities and provide them with some comfort."

This content was produced with the assistance of AI translation services.