[The Editors' Verdict] Housing Policies Defying COVID-19's Warning

Published 24 Dec.2021 11:33(KST)

The world has once again been engulfed in fear due to the new COVID-19 variant, Omicron. The "With Corona" policy, which had barely begun on the 1st of last month, abruptly ended, and from this week, strict controls such as various gatherings and social distancing have been reimposed. After nearly two years of continuation, citizens have grown exhausted. Self-employed individuals running restaurants and other businesses continue to suffer tremendous damage, highlighting the enormous impact COVID-19 has on our economy and society.

The origin and course of the COVID-19 outbreak, which began in Wuhan, China, have yet to be clearly identified even by experts. Environmental groups argue that the COVID-19 pandemic is one of the climate crisis phenomena caused by ecosystem destruction. Transportation experts say that the aviation network, connected like a spider web, is spreading the disease pandemic worldwide. Considering how quickly Omicron, which started in the Republic of South Africa, spread globally, this claim seems plausible. Architecture experts argue that population concentration in large cities is a major cause. This is a very reasonable claim given that, as of the 20th of this month, 70% of all COVID-19 patients in our country reside in the Seoul metropolitan area, where half the population lives, and that most patients in non-metropolitan areas also occur in large cities.

Fortunately(?), COVID-19 is transmitted through droplets, so wearing masks and maintaining a distance of over 2 meters can prevent infection. However, if a new virus that spreads through the air and requires distancing of tens of meters were to appear, the situation would change drastically. Every large city would become chaotic overnight. Apartments, which make up more than half of residential spaces in our country, cannot secure tens of meters of distance from neighboring units, making living there impossible. COVID-19 may be sending humanity a warning: "Do not concentrate too much in large cities."

Since the outbreak of COVID-19, the U.S. housing market has notably shifted demand from expensive and congested urban centers to more affordable and spacious suburban areas. With the development of IT technology enabling telecommuting, living in suburban areas is no longer inconvenient, prompting people to leave city centers. As a result, people seem to be naturally heeding the warning sent by COVID-19.

On the other hand, what about our country? The opposite phenomenon is occurring compared to the U.S. Demand is increasingly concentrated in the core areas of large cities. This is due to flawed tax policies such as comprehensive real estate tax and capital gains tax. In pursuit of owning a "smart single property," the concentration in core urban areas has intensified more than in suburban areas. This runs counter to the warning of COVID-19. Those most aggrieved by this year's comprehensive real estate tax bomb are people who own one house in a large city and another in the countryside. In some cases, the comprehensive real estate tax exceeds the price of rural houses. Most of these are weekend homes or inherited from parents, and the owners are often retirees. This policy ends up pulling even those who might have moved to suburban areas back into the city.

Until now, policies to prevent concentration in the Seoul metropolitan area and promote dispersion to local regions have been steadily pursued. The COVID-19 pandemic was a good opportunity to prevent urban concentration and promote dispersion. However, due to the government's flawed tax policies, it failed to curb the surge in housing prices and failed to achieve population dispersion. Instead of scrambling to solve immediate problems, it is necessary to look ahead, set the right direction, and proceed accordingly.