Transition Committee "Stepwise Promotion of Lease 3 Laws Amendment... Activation of Private Rentals Too"

Discussion on Reorganization Including Abolition and Reduction in Real Estate TF

Shim Gyo-eon, head of the Real Estate Task Force of the Presidential Transition Committee, is giving a briefing on the afternoon of the 29th at the Presidential Transition Committee in Tongui-dong, Jongno-gu, Seoul. Photo by Transition Committee Press Corps

[Asia Economy Reporters Kim Hyemin and Geum Boryeong] The Presidential Transition Committee (PTC) has decided to pursue a phased revision of the so-called 'Lease 3 Laws.' While pushing for legal amendments, the committee also plans to quickly prepare supplementary measures that do not require legal changes, considering that the differences between ruling and opposition parties may make this a long-term task.

Shim Gyo-eon, head of the PTC's real estate task force (TF) and a specialist on the Economic Subcommittee 2 (professor of real estate at Konkuk University), held a briefing on the 29th at the PTC office in Tongui-dong, Jongno-gu, Seoul, stating, "The Lease 3 Laws are recognized as a representative failure of the current administration's real estate policies." The Lease 3 Laws refer to the rent ceiling system, the right to request contract renewal, and the rent reporting system.

Shim diagnosed that the Lease 3 Laws caused side effects such as a decrease in rental housing listings, the conversion of jeonse (long-term deposit lease) to monthly rent, dual pricing between new and renewed contracts, and an increase in lease disputes. He pointed out, "The current administration introduced the Lease 3 Laws without sufficient social consensus and grace periods, significantly undermining the housing security of the public."

Accordingly, the PTC plans to review institutional improvements ranging from scaling back to abolishing the Lease 3 Laws. Shim said, "According to experts, there is a prevailing concern about instability in the jeonse market before the expiration of the right to request contract renewal this August," adding, "We will prepare phased measures to minimize market shocks."

The committee has also set a policy to persuade the Democratic Party of Korea to pursue legal amendments. However, since legal changes may take a long time, they intend to promote short-term measures before amendments, such as private rental registration and revitalization of private rental housing.

Regarding private rental registration, Shim explained, "Among the total 8.16 million tenant households, only about 40% can reside long-term at affordable rents through public rental and private registered rental housing," adding, "The remaining 60% are vulnerably exposed to instability in the jeonse and monthly rent markets." The PTC stated that it plans to support sufficient supply of construction rentals that have a net positive stock effect and is considering a phased expansion of purchased rentals focusing on non-apartment and small apartments.

On revitalizing private rental housing, Shim said, "Fifteen years ago, corporate-type rental housing called New Stay was introduced, but after three years of implementation, support was reduced and regulations tightened, which lowered policy trust and caused instability in private rental housing supply." He added, "We are also considering ways to sufficiently supply private registered rental housing while harmoniously strengthening protection for vulnerable groups."

Besides these, the PTC real estate TF is reviewing institutional improvement measures such as ▲expanding fund loans and financial tax support ▲strengthening support using public land and the REITs system ▲and social mix plans that allocate a portion of supply to vulnerable groups to promote social integration.

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