Land Minister Hong Ji-sun said the government will review easing restrictions on the transfer of rebuilding and redevelopment association membership in areas designated as speculative overheating zones, a change long sought by the Seoul city government and the urban renewal industry.
Hong made the remark on the 23rd at a comprehensive parliamentary audit of the Ministry of Land, Infrastructure and Transport held by the National Assembly's Land, Infrastructure and Transport Committee. Rep. Hwang Hee of the Democratic Party of Korea called for a change to the rules, saying the stakes have become what Koreans call "worthless paper" — holdings no one will buy, leaving owners unable to sell even if they want to. "We will review it," Hong replied.
In speculative overheating zones, association membership currently cannot be transferred after a rebuilding association wins approval to form, or after a redevelopment project's management disposal plan is approved. The number of affected projects rose sharply last year when the government's Oct. 15 housing measures designated all of Seoul and other areas as speculative overheating zones. Both the urban renewal industry and the Seoul city government have repeatedly called for the designations to be lifted, arguing that they block transactions.
Hwang said that pushing tax policies designed to prod owners of multiple homes to sell, while restricting the transfer of association membership, leaves such owners unable to find buyers. "They cannot sell even if they want to," he said, arguing that the transfer should be allowed when the buyer is a non-homeowner or an owner-occupier buyer with no speculative intent. Hong left open the possibility of a change, saying the ministry would check whether the circumstances described match the rules as written.
At the audit, ruling party lawmakers also pressed for an easing of property rules to relieve mounting strain in the jeonse and monthly rent markets. They said rules on private rental business operators and tighter owner-occupancy requirements have cut the supply of rental homes and increased the burden on tenants.
Rep. Chung Il-young of the Democratic Party of Korea said jeonse — a lump-sum deposit lease — has become hard to find even as deposits climb, and called for a review of the rules on private rental business operators and of the tighter owner-occupancy requirements. "The owner-occupancy requirements were tightened to curb gap investment — buying a home while a tenant's jeonse deposit covers most of the price — but the side effect of shrinking jeonse supply also needs to be addressed," he said.
Hong said the ministry takes the criticism seriously. "The fundamental answer to the strain in the jeonse and monthly rent markets lies in supply that falls short of demand," he said. He added that regulated zones and land transaction permit zones are confined to Seoul and parts of Gyeonggi Province, yet shortages of rental listings are also appearing in provincial areas where no such rules apply.