The central government and Seoul City appear to be toying with the idea of allowing the development of green-belt areas in the capital and its vicinity.
Their intentions are obvious enough _ curbing soaring housing prices in Seoul by lifting bans on the development of some green zones that have already been devalued through gradual erosion. Some property market watchers even say the central and metropolitan governments may jointly create another mini-bedroom town on the suburbs of the capital.
The rocketing home prices, coming on top of the widening income gap and prolonged economic slump, could force ordinary people to withdraw their support for the Moon Jae-in administration. It is a small surprise then the government and City Hall, both occupied by the progressive ruling Democratic Party of Korea, are doing all they can to stabilize housing prices, including the additional ravaging of green zones.
The real problem is the proposed development of the green belt is unlikely to tame the rocketing home prices. Since the government introduced the system about four decades ago to restrict random urban development, it has removed the ban on areas 345 times larger than Yeouido, the so-called Manhattan of Seoul, but failed to curb home prices. Instead, each lifting of the ban forced up the costs of nearby land amid expectations of development.
All this shows why the additional removal of bans or the creation of another new satellite town cannot be the solution to cool speculative fervor.
The surge in home prices is due in a large part to widespread distrust of the government's policies. The incumbent administration, too, has flip-flopped on its policy direction. Whatever the officials say, people are anxious to buy homes before prices rise further. The size of idle funds has also topped 1,000 trillion won ($892 billion), looking for profitable investment targets. An additional supply of green-belt space is sure to push up land prices even higher, deepening the frustration of the working poor.
The government ought to restart its real estate policy from the ground up. And the first step should be to restore public trust.
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