Finance minister pledges unwavering push for housing supply plan

Deputy Prime Minister and Finance Minister Hong Nam-ki, center, Minister of Land Infrastructure and Transport Byeon Chang-heum, second from right, and National Tax Service Commissioner Kim Dae-ji, left, bow their heads in apology at a press conference following a ministerial-level meeting at the Government Complex Seoul, Sunday. Yonhap

Illicit gains to be seized with heavier punishment for ethical, moral misconduct

By Lee Kyung-min

The government's plan to boost the capital region's housing supply will go ahead as scheduled, despite a series of damning allegations about employees at the state-run Korea Land and Housing Corporation (LH) having engaged in illegal real estate speculation using insider information, the finance minister said Sunday.

Instead, pan-governmental efforts will be initiated to draw up much heavier disciplinary action for moral and ethical misconduct found at such organizations ― a measure to eradicate what many view as "reprehensible behavior" ― long overlooked due to a lack of any established code of conduct.

The much-belated measure will do little to placate the public enraged and demoralized by the increasingly dimming prospects of stable living arrangements as real estate trading has become a source of short-term, windfall gains to those "in the know" who are "running wild" with access to classified information.

The government will be able to claim any money that a court rules as illicit gains to be forfeited, alongside a hefty additional fine, as part of the punitive measures to be instituted in a revision to the related law.

Deputy Prime Minister and Finance Minister Hong Nam-ki said the administration will move on with the real estate policy announced Feb. 4 at soon-to-be-finalized districts to be developed in accordance with the state-led reconstruction plan.

"The supply of 830,000 homes by 2025 will be implemented as planned backed by the previously announced schedule on selecting candidate areas, among other necessary follow-up measures, to move forward with the tightly managed plan in stages," Hong said following a ministerial-level meeting at the Government Complex Seoul, Sunday.

"Those engaged in unlawful activities will be permanently forced out of the market, never to return, as the government will enforce measures to prohibit their employment at entities where their experience and sources of information will be valued. Their requests to obtain licenses to run related businesses will also be denied."

Heavier punishment will be meted out for what the government considers activities that manipulate the market including using classified information gained in the line of work or from those that have access to such data.

Also included will be the formation of cartels to control changes in real estate and land process, the canceling of contracts after bidding at the highest price to drive an upward price spiral, and engaging in irregularities involving a state-run, conditional lottery process to receive the opportunity to acquire a home.

The chance of winning the housing lottery is greater for those with higher eligibility scores calculated on a variety of conditions including the time not owning a home, how long a related bank account has been open, marital status and number of children among other factors.

The slew of measures was drawn up following the allegations that employees at LH, the land ministry-supervised state housing company, bought plots of land in two cities in Gyeonggi Province where the government's housing development plan will be implemented.

According to the People's Solidarity for Participatory Democracy and Lawyers for a Democratic Society, around 10 LH employees and their family members bought 23,028 square meters of farmland in Gwangmyeong and Siheung from April 2018 to June 2020.

More troubling is that over half of the 10 billion won ($8.9 million) worth of land was bought with borrowed money, a source of major public fury since many people are struggling to borrow money from lenders amid tighter lending rules that the government put in place to curb such speculation.

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