"Easing Relocation Loan Regulations... Expanding Non-Apartment Supply in Redevelopment Areas" [The Light and Shadow of Urban Renewal Projects Part 2]

Real estate experts expressed concern over the "relocation crisis" triggered by urban renewal projects expected within a few years, unanimously agreeing that adjustments must be made across various sectors, including loans, supply, and taxation.
Specific alternatives were also proposed, ranging from easing criteria for calculating relocation loans to increasing the supply of non-apartment housing and preventing the concentration of relocation volume through regional adjustments. ■ A Unified Voice Calling for "Easing Loan Regulations" The most frequently mentioned point among real estate experts who met with the Financial News on the 28th was the "easing of loan regulations.
" Among these, Ko Jun-seok, a principal professor at Yonsei University's Sangnam Institute of Management, viewed the "easing of relocation loan regulations" as the most urgent issue. Professor Ko analyzed, "Currently, among construction companies, only Samsung C&T and Hyundai E&C are capable of independently securing additional relocation loans," adding, "If relocation loans are unavailable, the relocation itself will be delayed, potentially leading to a relocation crisis.
" The specific solution is the "easing of criteria for calculating relocation loans. " It was suggested that the basic relocation allowance, currently set at around 40% of members' previous assets, should be increased by converting it to the value of new construction.
Professor Ko stated, "If there is a member scheduled to move into an exclusive 84m2 unit, a plan is needed to calculate the relocation allowance by applying the market price of nearby newly built apartments," adding, "Since it is a loan with solid collateral, it is unlikely to be a high-risk loan for banks. " Opinions were also raised to separate relocation loans from household loans.
Kim Deok-rye, Head of the Housing Research Department at the Korea Institute of Housing & Industrial Research, pointed out, "Because relocation loans are bundled with household loans, people move when loans are available, but cannot move when they are not," adding, "When loans are blocked, it leads to a temporary 'concentration phenomenon' and ultimately results in a relocation crisis. " ■ Proposals for Non-Apartment Supply and Tax Benefits Also Proposed Expanding tax benefits for non-apartment supply and rental business operators is also among the alternatives.
Kim In-man, Director of the Kim In-man Real Estate Economic Research Institute, suggested, "Since most owners and tenants in redevelopment areas reside in villas, it is highly likely that they will eventually move to non-apartment housing even if they receive relocation loans. " He added, "However, it is important to significantly increase the supply of 'apartels' (three rooms and two bathrooms) rather than cramped studio apartments.
" Regarding the expansion of tax benefits for rental business operators, he advised, "If the short-term period of four years and the long-term period of eight years is too short, it can simply be extended to 10 or 20 years. " Previously, when the Moon Jae-in administration introduced the housing rental business operator system, it provided various tax benefits to operators who completed rentals under specific conditions for four years for the short term and eight years for the long term.
Director Kim explained, "If a 50% capital gains tax reduction is granted to business owners who have completed a 10-year lease and a 100% reduction to those who have completed a 20-year lease, there will be a huge demand," adding, "It is effectively like solving the rental problem without the government getting involved. " Seo Jin-hyung, a professor of Real Estate Law at Kwangwoon University, proposed adjusting urban renewal projects by region and timeframe.
Professor Seo argued, "If a large volume of relocations overlaps with the Jeonse shortage, a relocation crisis could occur," stating, "A policy is needed to prioritize by region, completing projects in certain areas first before moving to other areas. " In response, Rep.
Jeon Yong-gi of the Democratic Party of Korea emphasized, "Urban renewal projects needed by residents must be pushed forward with speed to resolve Seoul's housing crisis," adding, "However, if they are pursued without relocation measures, the burden will ultimately be passed on to the Jeonse and monthly rent markets and tenants. " He further added, "The Seoul Metropolitan Government should not stop at simple monitoring but must predict relocation demand by zone in advance and prepare practical preemptive measures.
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[email protected] Kwon Jun-ho Reporter