[Editorial] Speculative Land Investment Destroying the Country

On Friday the Ministry of Government Administration and Home Affairs released figures about land ownership, and they are even more shocking than the numbers about speculative real estate investment in the Gangnam neighborhood of Seoul. One percent of the population own 51.5 percent of individually owned land, and 5 percent owns 82.7 percent. Even more serious is that the situation is getting worse as time goes by. In 1986 five percent of the country owned 17.5 percentage points less, or 65.2 percent. That was the same period when the "concept of common land" was adopted, back in the second half of the 80's, when there was talk about how speculative land investment was going to destroy the country. What needs to be done at this point, when the situation is far more serious?

It goes without saying that the cause is speculative investment. The reason it is so serious is because of the vulgar tendencies of some in society who want to make quick fortunes through speculation, but it is just pathetic that the government has done so little. The rising price of land is social product, the product of investment in social infrastructure, various forms of development, and economic growth. You cannot call it "market principles" when a small number of citizens eat up all the fruit from that without even breaking a sweat. Furthermore the imbalance in land ownership makes prices rise higher than they would be otherwise. It is the whole populace that has to bear the burden for the resulting deterioration in national competitiveness and the high price of housing. If it continues, instead of being a 20/80 society, Korea will be a 10/90 society or worse.

Article 122 of the constitution permits the government to enact legal restrictions and duties for the effective and balanced use, development, and preservation of land. Measures need to be enacted quickly. Speculative land investment is rampant because people seek to get unearned income from land. The best way of fighting the problem is going to be eradicating any motivations to own an excessive amount of land. Property tax needs to be far more rigorous, and there needs to be a special measure by which the government can claim most of the income from land ownership by classifying it different from hard-earned income. Of course there would have to be detailed stipulations that make sure people who are actually living on the property they own are not negatively affected.

The Hankyoreh, 16 July 2005.

[Translations by Seoul Selection (PMS)]