The national government and the city of Seoul are in conflict over the "Songpa New Town." Seoul mayor Lee Myung Bak is proposing to the national government that area's construction be tabled, saying that if middle class families gather around Songpa it will cause problems for the "new town" projects and hurt the balance of development between each side of the Han River. The city also says there is already a new town project under which 100,000 new home units are going to be built by 2010, so the quantity will just be too overwhelming if the additional project proceeds. The national government disregards those claims, saying that the actual number of home units that will be created by redevelopment projects and the existing project will not really be that many, and so current plans cannot solve the housing shortage.
Both sides are looking at the issue with only one eye open. The national government is trying hard to ignore the negative side effects that would come with the additional project, and Seoul very much gives the impression that it is trying to stop the additional project just to make it look like its current one is accomplishing something. They need to find points of agreement. Even if self-centeredness has a lot to do with it, the city's claims are still worth listening to. Skyrocketing housing prices are not only the result of a lack of supply; they have also been caused by speculative real estate investment by persons owning multiple homes and the fact that construction companies are pricing their apartments higher than they should. That being the case, the government should first wait to see how well the August 31 Real Estate Measures work in fighting speculation, and it should consider implementing policies that make apartment prices lower such as a "pay after construction" program or requiring the disclosure of prime costs. Hastily making it so that there is a sudden and simultaneous increase in supply could have undesired side effects.
There needs to be a reevaluation of supply and demand in the housing industry, including the twenty or so "new town" and other development projects underway in the greater capital region. There especially needs to be a change in the way the national government and the city of Seoul fail to work together. Plans regarding the oversight of demand and supply cannot be put together properly if they are pursuing potentially conflicting programs. They need to stop insisting that their own policies are better and work on plans together for the sake of the people. Currently they are just making the country confused.
The Hankyoreh, 5 January 2006.
[Translations by Seoul Selection]
[Editorial] Nat'l Govt and City of Seoul Too Out of Step |
