Ruling Party Pushes for Expanded Housing Supply, Says "Let's Inject 20 Trillion Won in Additional Tax Revenue"

On the 13th, the government unveiled measures to expand housing supply, and the ruling Democratic Party of Korea urged it to accelerate the plan by injecting additional tax revenue, while the People Power Party pressed the government to first address the fallout from New Home pre-sale subscriptions in Changneung New Town. The government announced a plan to supply more than 230,000 homes in the Seoul metropolitan area, including 100,000 units in new public housing districts.
■ DPK proposes "20 trillion won in additional tax revenue"
In response, the DPK proposed using the additional tax revenue generated by the semiconductor boom, for which the government is still considering possible uses, to expand housing supply. The proposal came during a meeting attended by lawmakers and Seoul city council members who are increasingly anxious about worsening public sentiment over real estate.
Lawmaker Oh Ki-hyung told reporters after the meeting, "Between 10 trillion won and 20 trillion won of the additional tax revenue should be used for housing stability. This is something the National Assembly should discuss," adding, "There was a shared view that the public sector needs to play a more active role in short- and medium-term supply." The idea is to invest tax money in expanding public housing supply, which the government can speed up directly.
The tax injection proposal was also reportedly raised at a separate party caucus later in the day that focused on real estate policy. Kim Young-bae told reporters during the caucus, "President Lee Jae-myung also said that thorough measures should be prepared for housing supply, and that money should not be spared for this," he said.
There are also internal proposals to mobilize the National Pension Service (NPS), not just tax revenue. Ideas under discussion include investing 1% of the 18 trillion won fund in alternative assets, or adding about 130 billion won a year, equivalent to 1% of its annual surplus funds.

As a first step to spur expanded public housing supply, the DPK plans to pass amendments to the Act on the Improvement of Urban Areas and Residential Environments, the Housing Act, and the Special Act on Public Housing at a plenary session of the National Assembly next week.

■ Opposition says, "Give us an answer on the New Home scam sale"

The People Power Party, meanwhile, criticized the government plan as inadequate, pointing out that only 27,000 of the 230,000 homes have confirmed locations and that the supply in Seoul, where demand is highest, amounts to just 1,000 units.

It especially urged the government to resolve the New Home issue in Changneung New Town in Goyang, Gyeonggi Province, first. The project is a public sale housing program introduced by the previous Yoon Suk Yeol government, but controversy has erupted ahead of the main subscription period because conditions such as preferential interest rates offered at the pre-subscription stage may be changed. The People Power Party has labeled it a "fraudulent sale." Party leaders, including Jang Dong-hyuk, visited the construction site directly and met with victims.

Jang said, "If the government made an official promise and the public subscribed in trust of that policy, then the government should be responsible for that trust. Otherwise, it is effectively a mass fraudulent sale by the administration," adding, "The Ministry of Land, Infrastructure and Transport and the Office for Government Policy Coordination must give a clear answer on what they are reviewing, how they are reviewing it, and when they will reach a conclusion."

The People Power Party also described the government's plan announced that day to supply an additional 230,000 homes or more in the Seoul metropolitan area as a "deceptive loan encouragement measure" and a "recycled policy."

In a commentary released that day, chief spokesperson Choi Bo-yoon said, "The government has thrown out rosy numbers, saying it will supply 230,000 homes in the Seoul metropolitan area, but the only supply in central Seoul that the market truly wants is 1,000 units on the Yeomchang Park site in Gangseo District." She added, "What was revealed when the lid was lifted was a deceptive 'loan encouragement measure' that completely ignored the central Seoul supply the market really wants and instead urged the public to borrow money and hold on."

Kim Yun-ho, Jiwon Song, Lee Hae-ram