[2020 National Audit] President Moon's 'High-Quality Lifetime Housing' Faces Opposition from Ministry of Economy and Finance

[Asia Economy Reporter Kwangho Lee] President Moon Jae-in instructed the reform of the public rental housing system to transform it into 'high-quality lifelong housing' encompassing middle-class and low-income non-homeowners, but it has been revealed that the Ministry of Economy and Finance faces internal opposition.

On the 8th, Woo Won-sik, a member of the National Assembly's Planning and Finance Committee from the Democratic Party of Korea, obtained and analyzed internal report materials on inter-ministerial consultations related to high-quality lifelong housing. According to the analysis, the Ministry of Economy and Finance's position is that "it is difficult under current fiscal conditions to expand the scale of public rental housing to medium-sized units (60~85㎡) as financial input related to rental housing continues to increase and the Housing and Urban Fund's capacity is insufficient."

Instead, it is reported that they proposed abolishing income restrictions for tenants and establishing a 'middle-class exclusive rental housing' that charges rent close to market prices.

Representative Woo pointed out that this stance of the Ministry of Economy and Finance directly contradicts not only President Moon's high-quality lifelong housing initiative but also the government's previously promoted Housing Welfare Roadmap.

Previously, the government announced Housing Welfare Roadmap 2.0, which aims to resolve existing issues surrounding public rental housing by introducing social mix through unified tenant eligibility and supply standards, income-linked rent setting, and appropriate area allocation per household member.

President Moon declared his intention to alleviate housing difficulties faced by middle-class and low-income non-homeowners caused by real estate market overheating by expanding the policy beneficiaries and transforming the system into high-quality lifelong housing.

Regarding the Ministry of Economy and Finance's proposal, the Ministry of Land, Infrastructure and Transport responded, "The middle-class exclusive type contradicts the purpose of this measure (high-quality lifelong housing and Housing Welfare Roadmap), which aims to improve the image of public rental housing by encouraging diverse classes, including the middle class, to live together." They added, "In particular, the middle-class exclusive rental type is similar to the New Stay policy promoted during the Park Geun-hye administration and the Shift introduced by former Seoul Mayor Oh Se-hoon, and due to a lack of public nature and limits on business operators' burdens, its sustainability is low."

Representative Woo expressed concern, saying, "Although the Ministry of Economy and Finance's review opinion is based on the premise that it is still under inter-ministerial consultation, it is very worrisome that even the president's will for housing welfare for the middle class and low-income groups is still viewed internally only through the logic of economic feasibility." He emphasized, "Since fiscal support is essential to expand public rental housing into high-quality lifelong housing, the Ministry of Economy and Finance must engage more actively in the review process."

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