Lim Ija: "Let's seize the golden opportunity for housing supply"... Proposes bipartisan '3+3 real estate consultative body'

"Reconstruction floor-area ratios, lending, and jeonse and monthly rents must all be addressed together"
Concerns over 'government-directed management' of retirement pensions as well

The People Power Party proposed forming a bipartisan real estate consultative body to discuss easing restrictions on private-sector redevelopment and reconstruction and measures to stabilize jeonse and monthly rents. The aim, it said, is to avoid missing the golden opportunity to supply housing in urban areas by addressing not only floor-area-ratio limits but also the reconstruction excess-profit clawback system, lending restrictions, and measures for jeonse and monthly rents.

Im Lee-ja, policy committee chair of the People Power Party, said at a meeting on parliamentary audit preparations held at the National Assembly on October 30, "We are formally proposing to the Democratic Party the formation of a '3+3 real estate consultative body.' The aim is to jointly develop effective housing supply policies and legal and institutional measures to stabilize jeonse and monthly rents." She suggested having six participants: the policy committee chairs and senior floor policy officers of both parties, along with the secretaries of the National Assembly's Land, Infrastructure and Transport Committee.

Im Lee-ja, policy committee chair of the People Power Party, delivers opening remarks at a meeting on parliamentary audit preparations held at the National Assembly on the 13th. Photo by Yoon Dong-ju.

While welcoming the Democratic Party's plan to raise floor-area ratios for private-sector redevelopment projects, she said that limiting the benefits to small homes would make it difficult to achieve a meaningful increase in housing supply.

"It is welcome that the Democratic Party has said it would raise the floor-area ratio for private-sector redevelopment and reconstruction projects to as much as 1.2 times the legal limit, expanding the scope of regulatory easing to the private sector from public-sector projects, where it had initially been limited," she said.

However, she criticized the proposal, saying, "The devil is in the details. If the party sticks to its position of limiting the benefits of higher floor-area ratios to small homes with an exclusive floor area of 60 square meters or less, it will appear to ease regulations while imposing restrictions and shackles behind the scenes." She added, "To normalize private-sector redevelopment projects, we must discuss not only floor-area ratios but also the reconstruction excess-profit clawback system and easing excessive lending restrictions."

Im also criticized the government's plans to require employers to externally fund retirement benefits and introduce fund-based retirement pensions. While she said she agreed with the goal of preventing unpaid retirement benefits, she argued that these measures could "create another business burden for small and micro-sized companies with tight liquidity," and that complementary measures, including tax and financial support and an easing of inheritance taxes, should be implemented alongside them.

Regarding the possibility of the National Pension Service participating in the management of these funds, she said, "If workers' retirement pensions, worth more than 500 trillion won, also come under the influence of the National Pension Service, the independence of asset management and the principle of risk diversification could be undermined." She added, "They must not be misused as tools to boost stock prices or defend the exchange rate."

This content was produced with the assistance of AI translation services.