[Opinion] Multiple Homeownership by High-Ranking Officials, Must Be Disposed Of

Published 06 Aug.2020 09:05(KST)

According to data from the Korea Real Estate Board as of June, the median average housing price in Seoul reached 925 million KRW. This is nearly double the housing price of 529 million KRW at the start of the Moon Jae-in administration. Over the three years following the Moon Jae-in government, the housing price increase rate in Seoul averaged 57.6%, with the Gangnam 4 districts (Seocho, Gangnam, Songpa, Gangdong districts rising by 59.7%, 57.7%, 54.8%, and 67.3% respectively) and Ma-Yong-Seong (Mapo, Yongsan, Seongdong districts rising by 84.8%, 80.6%, and 77.3% respectively) areas showing much higher rates than other regions. Rising real estate prices indicate either a shortage of supply or high demand, and the Moon Jae-in government announced real estate measures 23 times, initially appearing to pursue a reverse supply-demand law by regulating both supply and demand simultaneously, gradually increasing the intensity of regulations. As a result, housing prices rose to levels too high for genuine homebuyers without homes to afford, and monthly rent prices have also increased for 57 consecutive weeks.

The government and ruling party eventually announced on May 6 that they would supply 70,000 housing units in the metropolitan area, and on August 4, they announced an additional supply of 262,000 housing units including the 70,000 units. Meanwhile, on July 30, the Rent Stabilization Act’s rent ceiling system and contract renewal request right passed the National Assembly plenary session, and on August 4, the rent reporting system, amendments to the Income Tax Act, Local Tax Act, and Comprehensive Real Estate Tax Act passed the National Assembly one after another according to the government’s intentions, tightening the noose on multi-homeowners as well as those owning houses. In particular, despite efforts to stabilize the real estate market through tax increases such as raising the comprehensive real estate tax by labeling multi-homeowners as speculators, prices continued to rise, leading to a hurried announcement of housing supply measures, showing a will to stabilize continuously rising housing prices along with supply. However, this seems quite late. The market is already flooded with liquidity funds, making it very difficult to stabilize the market regardless of any measures the government introduces. Therefore, the government should first introduce policies to reduce liquidity funds. However, the government has continuously regulated multi-homeowners, arguing that supply is sufficient and that prices rose because multi-homeowners hold many houses rather than supply issues.

In particular, there is currently criticism of multi-homeownership among public officials along with forced sales. Reviewing the property disclosure details of public officials released through the official gazette at midnight on March 26, it was found that more than one in three high-ranking public officials working in the Blue House, Prime Minister’s Office, and government ministries, as well as 20th National Assembly members, are multi-homeowners. The disclosure target of the Public Officials Ethics Committee includes 1,865 people such as political appointees in the executive branch, metropolitan and basic local government heads, and city/provincial education superintendents. The disclosed data is based on reports as of December 31 of last year. It is absurd that the government, which has blamed multi-homeowners like criminals, actually has 248 multi-homeowners, or 33%, among 750 high-ranking public officials including those in the Blue House and heads of public-related organizations in central government ministries. Among them, 196 own two houses, 36 own three houses, and 16 public officials own four or more houses. Including the so-called Gangnam 3 districts (Gangnam, Seocho, Songpa), 84 public officials own two or more houses. The average property of the 1,865 disclosure targets as of the end of last year was 1.03 billion KRW, an increase of 86 million KRW compared to the previous year. Property increased for 1,446 public officials, and 68 reported an increase of more than 500 million KRW. It seems that the people who benefited from the rise in housing prices are ultimately high-ranking public officials.

The same applies to members of the National Assembly, the representative body of the people. Among 287 members of the National Assembly, 100 are multi-homeowners, accounting for 34.8% of the total. In a public opinion poll conducted by Media Research asking whether multi-homeowner lawmakers should be excluded from related standing committees, 8 out of 10 citizens agreed. The high level of agreement reflects the critical public opinion toward lawmakers who own multiple homes participating in legislative activities in the Land, Infrastructure and Transport Committee and the Strategy and Finance Committee, which handle real estate policies and tax laws. Additionally, 72.1% support banning multi-homeownership among elected officials including lawmakers and high-ranking officials such as cabinet members, indicating that the public holds negative perceptions about the professional ethics and multi-homeownership of public officials and expects trust and exemplary conduct from them.

Of course, whether public officials or ordinary citizens, if only the negative aspects of multi-homeowners are emphasized, multi-homeowners inevitably become speculators. Some multi-homeowners may have no choice due to school issues, work, caring for elderly parents, inheritance, or gifts, but most multi-homeowners likely intend to sell houses to gain capital gains when housing prices rise. Therefore, multi-homeowners can be speculators. Meanwhile, some lawmakers with local constituencies may need to purchase a residence in Seoul during National Assembly sessions, and public officials may also do so. However, abusing this by purchasing houses in upscale neighborhoods like Gangnam as a means of asset accumulation is unacceptable. Social leaders such as high-ranking public officials and lawmakers should be more cautious considering their influence, and speculative multi-homeowners should be severely punished. That is why most citizens urge high-ranking public officials who are multi-homeowners to sell their houses and lead by example.

There are also positive aspects of multi-homeowners. Considering the reality of insufficient housing supply in Seoul, low-income people may never be able to purchase their own homes in their lifetime, so the government helps them buy homes through loans or provides rental housing to those low-income groups who find it difficult to buy homes, aiming to ensure housing stability. Furthermore, for even more vulnerable low-income groups, the government operates a housing voucher system that pays monthly rent. However, due to insufficient government rental housing supply, reliance on private rental housing supplied by multi-homeowners is inevitable. Yet, the government labels private rental housing suppliers as speculators. Under continuous regulatory policies, the government has significantly raised holding taxes including the comprehensive real estate tax through the ruling party alone in the National Assembly, urging multi-homeowners to sell their houses. Even if multi-homeowners sell their houses, not all homeless people have the purchasing power to buy homes due to strengthened loan regulations. Therefore, the government’s regulatory policies are not entirely appropriate. The housing market can only stabilize by flexibly adjusting regulations and relaxations according to market conditions. Especially, high-ranking public officials must naturally provide trust and confidence to the public, so multi-homeowners should dispose of their houses and must not become speculators more than anyone else.