"The government recommended it, now treated as a charter fraudster"... Cries pouring out in the heavy rain

[Financial News] "Why should the funds in the non-apartment market be withdrawn by reducing the charter loan limit for young people while trying to control apartment prices? Please create policies distinguishing between apartments and others."

On the morning of the 17th at 10:00, Kang Hee-chang, the chairman of the Korea Landlords Association, said this at a rally of non-apartment landlords held near the Peace Plaza of the War Memorial of Korea in Yongsan, Seoul. The recent '6·27 Loan Regulation' reduced the limit of the support charter loan for young people with an annual salary of less than 50 million won from the existing 200 million won to 150 million won, contrary to its purpose of controlling apartment price increases.
The rally was held with the intention of delivering a letter to President Lee Jae-myung, demanding the establishment of policies suitable for the non-apartment market, as non-apartment landlords, labeled as 'charter fraudsters' due to changing policies with each government, were affected by this regulation. About 70 members from the Korea Landlords Association, the National Office-tel Association, the Gyeonggi Southern Landlords Association, and the Busan Good Landlords Association attended wearing raincoats and masks.
The non-apartment market began to be hit hardest in 2022, after the charter fraud incident, when the criteria for joining the insurance of HUG (Housing and Urban Guarantee Corporation) were strengthened. At that time, the government reduced the limit of charter insurance from 150% of the existing public price to 126% to protect tenants. As the limit was reduced, the number of eligible people for insurance decreased, and the charter market shrank. The bigger problem is that the public price of non-apartments generally falls far short of the market price. Unlike apartments, non-apartments have fewer transactions and greater individuality of buildings, making it difficult to accurately determine the market price, often resulting in a lower public price than the market price.



In fact, villas, multi-housing, and multi-family houses are residences where young people with lower incomes live compared to apartments. According to the latest results (2023) of the 'Housing Status Survey' conducted by the Ministry of Land, Infrastructure and Transport every five years, 2 out of 3 low-income households live in single-family, row, or multi-family houses (the apartment residence rate of low-income households is 33.7%).
A 40-year-old landlord who participated in the rally said, "Young people choose studio apartments because other housing types are expensive, but in the case of multi-housing and multi-family houses, they can't even get insurance, so they can only offer monthly rent," and added that the room has been vacant for a year. He continued, "With the recent 6·27 measures, the support loan standard for young people was reduced from 200 million to 150 million, so studio apartments with a charter of 200 million won are immediately going into reverse charter."
Yang Jin-woo, the chairman of the National Office-tel Association, said, "I thought we played a certain role in the supply of housing in Korea, but it seems the government doesn't think so," and appealed, "The people here, unlike charter fraudsters, have been working two jobs and selling their houses and cars to return the deposit, so please don't treat us like criminals."
A 60-year-old Mr. Park, who is running a rental business in Suwon, said, "The construction cost alone for the house was 1.5 to 1.6 billion won, and I built 13 households, but the public price is less than 1.2 billion won, so I can only offer a charter for 5 households," and added, "A tenant who has lived for 6 to 7 years is about to reach the end of the charter, but even if they want to continue living, it's a regrettable situation because the insurance limit makes it impossible to extend."
They especially claimed that the government, which encouraged rental business until the charter fraud incident, is now driving landlords as 'the main culprits of raising house prices' or 'charter fraudsters.' The period when the government encouraged the registration of housing rental businesses was mainly from 2017 to 2020. Especially in the early days of the Moon Jae-in administration, by inducing the registration of multi-homeowners as rental business operators and providing benefits such as capital gains tax and comprehensive real estate tax reductions, more than 500,000 people registered as rental business operators in 2019.
Kang Hee-chang, the chairman of the Korea Landlords Association, said, "We started as housing rental operators because the country encouraged it," and "We thought we were contributing to the housing of young people and the common people to some extent, doing good deeds while making money."
going@fnnews.com Choi Ga-young, reporter