Will Byeon Chang-heum's 'Land Lease Housing' Become a Reality... Repurchase Obligation Law Passed by National Assembly

Minister of Land, Infrastructure and Transport Nominee Byeon Chang-heum Photo by Yonhap News

[Asia Economy Reporter Lee Chun-hee] The amendment to the Housing Act, which mandates that land leasehold housing purchased must be resold to public institutions, has passed the National Assembly. Since candidate for Minister of Land, Infrastructure and Transport Byeon Chang-heum has strongly advocated for this system since his academic days, it is expected that he will actively promote the supply of land leasehold housing after taking office.

According to the National Assembly and the Ministry of Land, Infrastructure and Transport on the 9th, the amendment to the Housing Act containing this provision passed the plenary session of the National Assembly on the same day.

The bill includes a so-called "repurchase obligation," requiring buyers of land leasehold housing to sell the property back to public institutions when they sell the house.

Land leasehold housing is a system where the ownership of the land is held by the public through entities such as the Korea Land and Housing Corporation (LH), and only the building is sold, thereby lowering the sale price. In the past, a total of 763 units of land leasehold housing were supplied in areas such as Seocho and Gangnam districts in Seoul. However, after being sold at the early 200 million KRW range, about one-quarter of the surrounding market price, the house price jumped to the 800 million KRW range in 2018 after the five-year resale restriction period ended, and currently exceeds 1 billion KRW.

Ultimately, this led to controversy over "lottery sales," where only the buyers gained several hundred million KRW in capital gains. Subsequently, in 2015, the "Special Measures Act for the Promotion of Supply of Land Leasehold Housing," the legal basis for supplying land leasehold housing, was abolished, rendering the system ineffective.

The amended Housing Act passed on this day includes a provision requiring repurchase by LH when land leasehold housing is sold. The purpose is to prevent excessive capital gains by buyers.

Candidate for Minister Byeon Chang-heum has argued since his time as a professor in the Department of Public Administration at Sejong University that land leasehold housing should be introduced to solve housing problems, and that a repurchase conditional housing system should also be implemented.

The amendment also includes provisions allowing regulatory areas such as speculative overheating zones or adjustment target areas to be designated not only at the current city, county, and district levels but also subdivided to the town, township, and neighborhood levels. However, considering the difficulty of designating housing development zones if only the town, township, and neighborhood levels are designated, a proviso clause was added to allow adjustment of the regulatory area designation by comprehensively considering the conditions of the relevant area. The necessity of maintaining regulatory areas for adjustment target areas will be re-examined every half year.

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