'No room for compromise' on Yongsan Park housing: Seoul Mayor Oh

Seoul Mayor Oh Se-hoon delivers opening remarks at a real estate forum on the Aug. 13 housing measures, held at the National Assembly Members' Office Building in Yeouido on Wednesday. [The Herald Business DB]

Seoul Mayor Oh Se-hoon on Wednesday flatly rejected the government's plan to build housing on Yongsan Park, saying there is "not the slightest room for compromise," and criticized President Lee Jae Myung's concern that easing redevelopment and reconstruction regulations could drive up home prices as "putting the cart before the horse."

Oh made the remarks at a forum on the Aug. 13 real estate measures, jointly organized by the Seoul chapter of the People Power Party and the Seoul Metropolitan Government and held at the National Assembly Members' Office Building. "Yongsan Park is Seoul's last large-scale green space — one that must be preserved for future generations with a view 100 or 200 years ahead," he said.

Oh took strong issue with the government's failure to consult the city before floating the idea of converting part of Yongsan Park into residential land. "The Seoul Metropolitan Government was never notified of plans to rezone Yongsan Children's Garden for apartment use — we learned about it through the media," he said. "It is unacceptable to pursue a matter that directly affects Seoul residents' interests and legally requires consultation with the city in this manner."

Oh said he plans to convey his opposition to housing development on the park when he meets Ministry of Land, Infrastructure and Transport Minister Kim Yun-deok on Thursday. "Successive governments built a social consensus — enshrined in the Special Act on Yongsan Park — that the park's core area should remain green space for future generations and never be used as a housing site, even when real estate conditions deteriorated," he said. "I will strongly urge that the legislative intent behind that law be upheld."

Oh also warned that concentrating housing supply in the Yongsan area would place an unsustainable burden on traffic. "We originally agreed with the government to supply 6,000 units in the Yongsan International Business District, but the government demanded 10,000, and the city proposed a compromise of 8,000 — yet the Ministry of Land, Infrastructure and Transport is holding firm at 10,000," he said. "If we then discuss another 10,000 to 20,000 units in nearby Yongsan Park, the traffic load on the surrounding area will reach an unmanageable level."

A panel discussion at the Seoul PPP chapter–Seoul Metropolitan Government forum on the Aug. 13 real estate measures. Kim Woo-cheol, a professor at the University of Seoul, moderated the session, while Kim Sung-hwan, a research fellow at the Korea Construction Industry Institute, and Oh Moon-sung, chairman of the Korea Tax Policy Association, delivered the keynote presentations. [Yun Sung-hyun]

On President Lee's remarks at Tuesday's Cabinet meeting — in which Lee raised the possibility that easing redevelopment and reconstruction regulations could stoke property prices — Oh said the concern was "unnecessary and excessive." "Relaxing floor-area ratios just enough to make redevelopment and reconstruction viable in areas where projects have stalled due to poor profitability does not cause property prices to skyrocket — that view is far removed from reality," he said.

Oh also said that instability in the jeonse and monthly rent market that can arise during reconstruction projects should be managed through measures such as staggering relocation schedules, not by suppressing the projects themselves. "Once relocations begin after project implementation approval and management and disposal plan approval, a spike in surrounding rental demand is a foreseeable side effect," he said. "Managing the volume through phased reconstruction and coordinated relocation timing to minimize that side effect is exactly what the Seoul Metropolitan Government should be doing."

"If fear of those side effects leads us to delay redevelopment and reconstruction altogether, there is in effect no way to supply new housing in Seoul," he added. "Hesitating or stalling on reconstruction projects out of that concern is putting the cart before the horse entirely."

The Seoul Metropolitan Government says it has already secured a pipeline of redevelopment and reconstruction projects capable of delivering 310,000 units by 2031. Oh said the net increase — after subtracting units lost to demolition of existing homes — amounts to about 87,000 units, "more than the volume the government announces when it unveils new housing site development plans."

On the government's broader real estate policy, Oh assessed it as short-term medicine focused on results within the current administration's term. "Most of the measures put forward by the Lee Jae Myung administration are aimed at bringing home prices under control within the next three to four years," he said. "There is little serious effort on policies that would stabilize the housing market five, seven or ten years from now."

The forum that followed was moderated by Kim Woo-cheol, a professor at the University of Seoul, with keynote presentations delivered by Kim Sung-hwan, a research fellow at the Korea Construction Industry Institute, and Oh Moon-sung, chairman of the Korea Tax Policy Association.

Kim Sung-hwan questioned the feasibility of the government's ground-breaking targets for the greater Seoul area. "Combining the Sept. 7 measures and the Aug. 13 measures, an average of 294,000 units per year would need to break ground in the metropolitan area between 2026 and 2030 — a figure that matches last year's nationwide ground-breaking volume of 293,000 units," he said. "That is an extremely aggressive target, given that the metropolitan area has never broken ground on that many units in a single year since 2005."

Oh Moon-sung criticized the government's approach to tax reform. "The very idea of using taxation to control the real estate market is misguided," he said. He added that the long-term holding special deduction was designed to account for inflation and the effects of progressive taxation that accumulate over years of ownership, and that restructuring it around residency requirements would undermine the system's original purpose.

quq@heraldcorp.com