LH Scandal Fallout... Fairness Controversy Spreads to 'Civil Servant Special Purchase'

Citizens "Unearned Income... Should Be Reclaimed When Sale Prices Are High" Anger
Civil Servants "Housing Crisis Is Serious... Criticizing Special Supply Itself Is Excessive" Backlash

[Asia Economy Reporter Jang Sehee] The public outrage over the speculation allegations involving employees of Korea Land and Housing Corporation (LH) is showing signs of spreading to the special apartment supply for government officials. Special housing supply has been allocated in Sejong for these officials to alleviate housing difficulties caused by the relocation of government offices, but the LH incident has raised questions about fairness.

According to the Administrative City Construction Agency on the 18th, the Ministry of SMEs and Startups located in Daejeon will relocate to Sejong by August. Accordingly, about 500 government officials working at the headquarters will be eligible to apply for the special apartment supply. The Korea Meteorological Administration, Korea Forestry Promotion Institute, and Korea Meteorological Industry Technology Institute, which are relocating to Daejeon, will also be eligible for the special supply. As central government ministries and their affiliated agencies move, hundreds of people may receive special supply.

An official from the Administrative City Construction Agency stated, "The Ministry of SMEs and Startups will be eligible to apply for special supply for five years starting from July next year," adding, "The affiliated officials will obtain confirmation letters from their respective ministers and apply." According to the housing supply regulations, employees of national institutions or public institutions relocating to or newly established in innovation cities, including Sejong, are explicitly allowed to receive special supply.

The special supply is drawing attention because the value of 'fairness' has been put under scrutiny due to the LH incident. The core issue is that employees with access to internal information used it to increase their assets, and from the perspective of non-government officials for whom winning a housing lottery is extremely difficult, the special supply is also seen as an unfair benefit.

This sentiment is also reflected in public opinion. Some netizens said, "Sejong is a city only for government officials. We have been without a home since December 2009, but no matter how many times we apply for housing in Sejong, we never succeed," and "They make laws lacking equity so that government officials administer for themselves." A person in their 20s, A, said, "It is unearned income unrelated to individual effort," and asked, "Shouldn't profits exceeding the sale price be reclaimed?"

The government reduced the proportion of housing supply from the original 50% to 40% this year due to local residents' opposition, but even this is criticized as excessive. Especially recently, as housing prices have risen sharply, the controversy is growing. There are also calls for reclaiming profits gained through special supply. According to the Korea Real Estate Board, the average apartment sale price in Sejong, which was 143,257,000 KRW as of December 2012, rose significantly to 544,419,000 KRW last month.

[Image source=Yonhap News]

However, government officials also have their say. They argue that conditions such as prohibiting applications for those owning two or more houses and an eight-year resale restriction make it institutionally impossible to realize profits. A government official in his 40s, A, said, "When Sejong apartments were unsold, we were told to buy, but now that the LH incident has erupted, criticizing the special supply itself is excessive." Another official in his 30s, B, said, "There are systems like the eight-year resale restriction, making it difficult to realize profits," adding, "At first, government officials were criticized for commuting instead of moving to Sejong, but now that housing prices have risen and they are said to benefit, it feels very unfair." In the early days of the special supply in 2012, there were even cases where applications fell short.

An employee of the Ministry of SMEs and Startups, who will be eligible to apply for the special supply, said, "Usually, special supply is carried out in line with the relocation timing, but for the Ministry of SMEs and Startups, it was actually delayed by a year," adding, "It seems unfair compared to other relocating ministries." Earlier, the Administrative City Construction Agency and the Ministry of SMEs and Startups agreed in January to provide special supply for five years starting from July next year.

Regarding this, Professor Kwon Daejung of Myongji University's Department of Real Estate said, "If special supply is necessary due to housing instability, the period should be limited to one to two years after the relocation decision."

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