| Apartment buildings in Seoul / Korea Times file |
Role, functions and limits to be clearly identified to prevent excessive government control
By Lee Kyung-min
The recent public fury over employees at the state-run Korea Land and Housing Corp. (LH) engaging in real estate speculation using insider information has prompted the need to set up a real estate monitoring body, a discussion stalled for months after President Moon Jae-in proposed the idea in August last year.
The delay was due to concerns of possible abuse of private data by the government and subsequent infringement of people's property rights under the guise of rule of law.
Also raising a major red flag is a clear lack of specifics to resolve the apparent conflicts of interest resulting from the make-up and management of the body to be supervised by the land ministry, since little accountability is expected from an investigation not overseen by a disinterested third party that remains free from identifying and making public a slew of suspected wrongdoings.
Experts say lingering concerns of greater government control and overstepping in private property rights can be mitigated by making the body by law an independent organization with clear objectives and limits in investigative rights, followed by measures to preclude the government from arbitrarily meddling in private property transactions.
| Deputy Prime Minister and Finance Minister Hong Nam-ki attends a finance committee meeting at the National Assembly, March 19. Korea Times file |
Unified policy drive
The government, the ruling Democratic Party of Korea (DPK) and Cheong Wa Dae are believed to have reached an agreement that the body should be set up as early as possible, with the ruling party saying the timeline can be moved up to within the next two or three months.
DPK lawmaker Jin Sung-joon sitting on the National Assembly's Land, Infrastructure, and Transport Committee said a bill he proposed to establish legal grounds on which to set up the body has been pending since last November, adding that talks should advance now given the groundswell of public support calling for the complete eradication of real estate speculation by public officials.
"Many people are understandably and rightfully outraged by the shameless conduct by the very figures we depend on and trust to help guarantee stable and fair supply and execution of state-run housing projects. The body can be set up as soon as the opposition bloc moves forward with the idea," the lawmaker said.
The move is bolstered further by Deputy Prime Minister and Finance Minister Hong Nam-ki who urged the National Assembly to promptly pass the pending bill for the government to better crack down on speculation and bring soaring housing prices under control.
"The delay in setting up the body has led to the inefficient implementation of real estate policies. The envisioned body is needed to identify speculators in advance and investigate them, a key measure to prevent the recurrence of the LH scandal," Hong said during a finance committee meeting, March 18.
Clarity needed
The bill should outline clearly the functions, roles and limits of the body to allay concerns that the government will abuse it as a legitimate means of infringing on individual property rights, according to experts.
The concerns of what many consider "big brother" is mounting, understandably because the government authorities according to the bill can have full access to financial and credit data on whether certain properties were bought with loans and, if so, whether the borrowings granted were subject to strict lending rules. Also among the data will be property owners' tax return records.
"The role of the government should be limited to monitoring and tracking market data, not supervising," Myongji University real estate professor Kwon Dae-jung said. "Otherwise, excessive government control will lead to a drop in the property market, causing an adverse outcome with the people's right to pursue wealth violated in the process."
The government is trying to ride on the public fury over the LH scandal, he added, since setting up of the body is irrelevant to prohibiting public officials from using insider information for personal gains, much less property speculation made by private individuals.
"Regulatory measures should be about whether public servants with information on redevelopment or reconstruction plans bought land or buildings before the information was made public. It lacks reason for the government to monitor real estate trading made by a majority of people seeking asset increases."