Disparity in housing for the rich and poor is serious but nothing new. Is it old news that land and buildings are largely owned by certain classes, and that the poor distribution structure is worsening and hurting social unity? That is why the roots of the problem are deep, meaning it will not be easy to find solutions. Nevertheless, we will have to look for fundamental measures deal with the issue. You are led to think so even more after looking at figures from the Korea Development Institute (KDI) and the Citizens' Alliance for Land Justice, a civic group that officially got off the ground on Tuesday.
According to KDI the Gini coefficient for Korean housing assets rose from 0.489 in 1993 and then 0.510 in 2002, and that as of 2000 23 percent of households lacked what is considered the minimum level of housing. According to the civic group, 1 percent of all people playing "integrated land tax" own 45 percent of land that is subject to that tax. That 1 percent, in turn, earned W32 trillion worth of profit in land assessment each year from 2001 to 2003. Those are figures that show you once again how the disparity in real estate ownership is growing. Since real estate is a serious part of what makes up household and corporate assets, the disparity can only lead to an intensification of the overall disparity between rich and poor. Indeed, have not many who have accumulated wealth done so using real estate?
Concentrated ownership of real estate leads to serious problems. It hurts a sense of social unity for those who own land and housing and those who do not, and more than a few people take their lives for not owning a home. It has also been a serious obstacle to productive economic activity by causing land prices to go up. The situation must not continue. Most of all, real estate has to become a place for habitation and productive activity instead of being treated means for increasing one's assets. That will require strict measures against speculative real estate investment and the implementation of policies based on the public governance of land. Those policies would include claming profit from development, expanding regulations meant to achieve public purposes, a stronger property tax, and more. The government and members of the National Assembly have to have the political will to make it happen. It should not be forgotten that the real estate problem can end up an obstacle to Korea becoming an advanced nation.
The Hankyoreh, 23 February 2005.
[Translations by Seoul Selection (PMS)]
[Editorial] The Message for Real Estate Policy |
