Scholars' Sharp Critique: "Focus on System Reform Rather Than Identifying LH Speculators"

Urgent Call for Fundamental Measures to Prevent Recurrence of Crisis
Professor Emeritus Lee Jungoo: "So Far, 'Taesanmyeongdong Seoilpil'... Doubts on Achievements"
"Must Block Through Differential Compensation"
Government Considering Pre-Transaction Reporting System

[Asia Economy reporters Kim Hyunjung and Jang Sehee] As the government has announced measures to eradicate real estate speculation by public officials and employees of public enterprises, experts are calling for fundamental measures to prevent recurrence rather than crackdowns and punishments driven by social and political anger. Since illegal speculation has been carried out by exploiting legal and institutional loopholes, there is an urgent need to establish preventive measures through comprehensive institutional reforms. It is reported that the government will include a plan to change the property registration of public officials from an annual to a quarterly basis in the joint anti-speculation measures to be announced at the end of this month.

According to academia on the 15th, Lee Joon-gu, an emeritus professor of economics at Seoul National University and a progressive scholar, wrote in a recent blog post titled "The Republic of Real Estate Speculation" that "The most urgent task in our society is fundamental institutional reform to create a situation where the Korea Land and Housing Corporation (LH) incident cannot recur," emphasizing that "the very structure that allows making huge profits from real estate speculation must also be addressed." Professor Lee, an authority in domestic microeconomics who has not hesitated to criticize various social issues, pointed out that this incident is the result of "improvisational responses without seeking fundamental solutions until now."

He particularly questioned the effectiveness of the government's emphasis on 'severe punishment,' noting that similar situations have ended with "Taesanmyeongdong Seoilpil (泰山鳴動 鼠一匹; meaning a great commotion but only a mouse comes out, implying much ado about nothing)." He stressed, "Even if investigative power is mobilized, it is nearly impossible to identify speculators who hide under borrowed names."

There are also calls for the government to block speculative demand through differential compensation based on land holding periods during new town land development. Professor Kwon Daejung of Myongji University’s Department of Real Estate said, "Since there have been suspicions of speculation every time new town land is developed, it is necessary to distinguish whether the land is genuinely farmed based on ownership and holding period and apply differential compensation rates accordingly," adding, "If the purpose is not farming, loans should also be prohibited." He further emphasized, "Fundamental measures unrelated to whether one is an LH employee are needed," and "Forced liquidation is not the answer. Even if purchased, there should be no profit."

Within the government, there is also consideration of introducing a 'reporting system' before real estate transactions for public officials and employees of public institutions, focusing on 'prevention of recurrence.'

Through audit offices within each ministry or public enterprise, the government plans to thoroughly examine the transaction details and illegal elements of stakeholders in real estate policies. A senior government official explained, "After receiving reports and reviewing them, if there are problems, we will recommend selling the real estate." Along with this, there is discussion about expanding the obligation to register assets from current public officials at grade 4 or above to include public officials at grade 5 or below involved in real estate policies and all employees of related public institutions such as LH, requiring asset registration semiannually or quarterly. Regarding LH, an internal Compliance and Ethics Monitoring Team will be established to continuously prevent and manage speculation.

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