Won Hee-ryong: "Fundamental Improvement Needed for 'Lease 3 Laws'"

Introduced Without Sufficient Review... Negative Impact on Jeonse and Sales Markets
Opposed to Application in New Contracts and Extension of Lease Terms

Won Hee-ryong, the Minister of Land, Infrastructure and Transport candidate and the Planning Committee Chairman of the 20th Presidential Transition Committee, is speaking at the 6th plenary meeting held at the Transition Committee in Tongui-dong, Jongno-gu, Seoul on the morning of the 18th.
[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] Won Hee-ryong, the nominee for Minister of Land, Infrastructure and Transport, stated that he will seek fundamental improvements to the Three Lease Laws. He also emphasized the need to supply a large number of high-quality rental housing units by utilizing the private registered rental system.

On the 30th, Won made these remarks in his written responses submitted to the National Assembly for the confirmation hearing. In response to a question from Park Sang-hyuk, a member of the Democratic Party of Korea, regarding the Three Lease Laws, he said, "We will closely monitor the jeonse and monthly rent market situation and seek fundamental improvement measures through sufficient public discussion and opinion gathering processes."

The Three Lease Laws, established to protect tenants, mainly consist of the tenant's right to renew the contract (2 years) and the rent ceiling system (existing rent increase limited to within 5%). Won acknowledged the purpose of these laws but pointed out that they were introduced as direct price regulation policies without sufficient discussion, causing market distortions such as rising jeonse prices.

He explained, "Landlords preemptively reflected four years' worth of rent increases considering contract renewals, and the reduction of available rental properties due to contract renewals led to a sharp rise in jeonse prices and increased disputes between landlords and tenants." He analyzed, "The Three Lease Laws were introduced during a phase of rising housing prices, affecting not only the increase in jeonse prices but also instability in the sales market."

Regarding recent claims that the rise in jeonse and monthly rents is due to the Three Lease Laws, he responded, "We believe that various factors such as market confusion caused by rapid institutional changes, reduction of rental properties due to contract renewals, macroeconomic conditions like interest rates, and tax and loan policies have all played a role."

On the argument that rent increase rates should be limited even in new contracts, he expressed a negative stance, stating that it requires very cautious consideration due to its significant impact on the supply of rental housing and the jeonse and monthly rent market. He also opposed proposals to extend the lease contract period from the current '2+2 years' to '2+2+2 years' or '3+3 years,' citing concerns about the side effect of reducing available rental properties.

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