Research Report
A Study on the Housing Supply Legislation
I. Background and Purpose
▶ Paradigm shift from housing supply-oriented policies to housing welfare-oriented policies
○ The State-led housing supply policy was implemented to restore housing due to the war before 1960. After 1960, the Government established a legal system such as housing supply, construction, and management and started supplying housing to the private sector, but implemented housing supply-oriented policies such as the enactment of the Korea National Housing Corporation Act to address the severe housing shortage in Seoul due to rapid economic growth and the increase in the number of people moving to Seoul.
○ In order to ensure the basic human right, the Framework Act on Residence, which aims to improve housing welfare, was enacted, and Article 2 of this Act explicitly stipulated housing rights, declaring a change from housing supply-oriented policy to housing welfare.
▶ Comprehensive analysis of laws and policies related to housing supply is needed for stable and efficient operation of the housing supply system.
○ Housing is a basic human right, and “creating a pleasant residential environment” is the responsibility of the State prescribed in the Constitution.
○ In the past, the Housing Act stipulated the overall contents of housing supply, such as housing construction, supply, management, housing funds, and housing transactions, but criticism was raised that it did not reflect the market requirements in a timely manner by comprehensively stipulating declarative, detailed, and technical matters in one law.
○ Accordingly, legislation to separate the Housing Act was promoted, and as a result, the housing supply legal system was formed around the Framework Act on Residence in 2015, but regulations on housing supply were enacted and revised whenever policies were abolished or newly implemented; without a close review of the housing supply legal system, it is complicated by special laws and general laws, and rather, there is a limit to rapid housing supply.
○ It is pointed out that the housing supply policy has changed to the preferred policy type according to the previous government's stance and politically pursued direction, and that the effectiveness of the policy has decreased due to the neglect and abolition of the existing policy if the regime is replaced.
○ Despite the frequent enactment and revision of related laws and policy changes, problems in terms of housing supply, such as deepening social conflict due to real estate polarization, remain pending.
▶ Therefore, in this study, an improvement plan was derived through a comprehensive analysis of housing supply-related laws and regulations for stable and efficient operation of the housing supply system
○ To this end, the housing supply was analyzed from the perspective of disclosure and notice targeting policies as well as laws related to housing supply. Through this, the consistency of the legal system related to housing supply and the consistency between laws and policies were comprehensively examined.
○ Meanwhile, by setting the changed social structural aspects, such as public awareness of low birth rate and aging households, as a standard of consideration, efforts were made to propose improvements to laws that could respond to the changed future society.
○ In addition, this study tried to contribute to the public's comfortable and stable housing life by achieving the purpose of effective housing supply policy by securing system consistency and continuous housing supply stability.
Ⅱ. Major Content
▶ First of all, this study examines the provisions related to housing supply obligations in domestic and foreign housing supply laws
○ In the case of Korea, this study reviewed housing-related laws such as the Constitution, the Framework Act on Residence, the Housing Act, the Special Act on Public Housing, and the Special Act on Private Rental Housing. In particular, the State's obligation to supply housing was confirmed through the provisions of "guaranteed comfortable housing life of the people" and "right to live like a human being" specified in Articles 34 and 35 of the Constitution and Article 2 of the Framework Act on Residence.
○ Article 2 of the Framework Act on Residence stipulates the right to live a human life in a pleasant and stable residential environment as a residential right, the Special Act on Public Housing stipulates the obligation to supply public housing, and the Special Act on Private Rental Housing stipulates that the State and local governments provide support to fulfill their housing supply obligations by expanding the supply of private rental housing, improving the quality of housing, and reducing taxes.
○ Looking at the seven criteria of “appropriate housing” (legal stability for occupancy, availability for services, availability for infrastructure, appropriateness of cost, habitability, accessibility, location, and cultural appropriateness) specified in the UN Social Rights Regulations, we can derive the universal factors that a residential environment should have.
○ This has been confirmed as a suitable criterion for embodying the comfort and stability of the residential environment as previously stated in the relevant law provisions in South Korea.
○ “Residence” is recognized as a very basic human right at home and abroad, and it is legally stipulated that the State has a responsibility to create an environment for the people to live in a pleasant residential environment.
▶ Further, the current housing supply law system was analyzed.
○ Based on the Framework Act on Residence, the current housing supply law system stipulates housing construction and supply in the Housing Act; rental housing supply in the Special Act on Public Housing and the Special Act on Private Rental Housing; housing management in the Multi-Family Housing Management Act; and housing stability in the Act on the Support for Housing Disadvantaged Persons including Persons with Disabilities and the Aged.
○ The "housing supply procedure" stipulates housing supply plans and housing supply methods, the "housing supply entity" is divided into the public and the private sector, and the "housing supply area" is divided into the outskirts and the urban areas.
○ As a result of the analysis according to the “housing supply procedure”, each individual law stipulates a comprehensive housing plan under the Framework Act on Residence, a public housing supply and management plan, a housing support plan, and a basic urban and residential environment improvement plan; however, it has been analyzed that there are insufficient regulations to listen to opinions, such as insufficient regulations related to the comprehensive housing plan, fact-finding survey when establishing the plan, public viewing of local residents for more than 14 days, and opinions of local councils.
○ As a result of the analysis according to the “housing supply entity”, housing supply can be classified into public housing and private housing based on publicity and profitability; however, the housing supply paradigm has changed due to the improvement of housing welfare, and it is becoming difficult to distinguish between the two as private construction companies increase their participation in the public rental housing supply.
○ As a result of the analysis according to the “housing supply area”, laws for the outskirts stipulate benefits such as licensing agenda, special regulations, loans to migrant institutions, priority housing supply, education and medical facilities, etc. based on balanced national development, and laws for the urban areas stipulate the licensing agenda and special cases, but the smaller the number of cases, the more simplified the process.
○ As a result of the comprehensive analysis, problems such as “the deformed legal system centered on special cases”, “difficulty in establishing relationships between basic law, general law, and special law”, “lack of supply role of local governments”, and “contradiction and overlap between housing supply laws” appeared.
▶ Next, the housing supply policy and its impact were examined.
○ The Roh Moo Hyunn government tried to strengthen the public nature of the housing supply, but it was overheated by the intervention of the housing market; the Lee Myung Bakn government pursued a policy of revitalization through deregulation, but it was not enough to solve the fundamental problems of the housing market; and the Park Geun Hye government implemented a housing supply policy centered on the economic recovery, but it was pointed out that support for low-income families without housing was somewhat insufficient
○ The Moon Jae In government implemented a policy to strengthen regulations to eradicate speculative demand, which caused tax resistance, resulting in a surge in housing prices in the Seoul metropolitan area; and the current Yoon Suk Yeol government presents tax reductions related to housing supply, and shows a similar form of housing policy to the Lee Myung Bakn government and the Park Geun Hyen government, but it should be considered that it is in the early stages of the government.
○ Looking at the changes in the housing supply policies of previous governments, the cycle of "speculation control-regulation" is mainly circulating, and South Korea has the tendency to rely on the government's housing supply policy, with 40% of rental housing residents.
○ However, the government is not supplying housing to "necessary" places, but is promoting housing supply to "efficient" places, and due to imbalances between the metropolitan area and local governments, end users are not receiving the benefits of housing supply policies in a timely manner.
○ As a result of reviewing the laws and policies related to housing supply, problems such as “the absence of a continuous housing supply system”, “the complexity and unclear system of the housing supply legal system”, and “the role of unclear housing supply stakeholders” were derived.
○ Currently, housing supply policies and ground laws are frequently revised, but it is still difficult to promote stable housing supply projects due to problems that take time to apply the law to the housing market.
○ Therefore, in order to improve the overall system related to housing supply, it is necessary to improve related laws and regulations as part of a preemptive response plan.
▶ Lastly, this study examines the problems of the housing supply legal system by synthesizing what has been examined so far, and then seeks ways to improve it.
○ The current problem of housing supply results in "confusion and overlap in the enforcement and application of the law due to lingering legal systems focusing on responding to the current housing supply status." In other words, the current housing supply legislation system is immediately enacted and revised to solve the problems at hand, causing confusion in the operation of the system.
○ Since housing supply tends to be less effective as existing policies are neglected or abolished according to the government's stance, it is necessary to closely understand the effects of policy establishment, and to clarify the demand and target of housing supply, and the appropriate supply target.
○ Due to regulations that contradict the relationship between the sporadic special law and the general law, the system of the housing supply law system should be reorganized.
○ The purpose of the housing supply policy should be effectively achieved by clarifying the role of housing supply stakeholders such as public housing business operators and private housing businesses.
○ The law should be revised to stabilize housing supply prices by adjusting the economic interests of private housing operators and the publicity of housing by calculating appropriate profit rates for housing supply, review the introduction of development profit sharing system in the mid- to long-term, and prevent privatization of development profits.
○ The plan for housing policies scattered in other laws must be mutually linked with the Framework Act on Residence and the comprehensive housing plan to ensure system consistency.
○ Public redevelopment projects and public reconstruction projects should be promoted quickly through precision safety diagnosis exemption for old apartment houses to stabilize housing supply.
○ To this end, this study proposes the following short-term solutions: “Avoiding partial centralization of housing supply system”, “sharing of information on complex housing development profits”, “consideration of future housing supply demand and household structure changes”, “legal system and safety of housing supply”, and “establishment of a legal system focused on housing supply”; and the long-term solutions include “avoiding new supply artificial supply regulations”, “enactment of a law for preventing privatizing development gains”, “comprehensive management of data related to housing policy”, and “transfer of authority of the central government for housing supply.”
Ⅲ. Suggestions and Expected Effects
▶ This study proposes a solution according to the time procedure as follows to create a pleasant residential environment for the people.
○ First of all, in the short term, it is necessary to improve the legal system as a way to increase consistency and accuracy between various laws and regulations related to housing. Since the Framework Act on Residence is declared as the highest law on housing policy in the current law, the relevant law can adopt a method of embracing housing-related policies. In addition, it is necessary to increase the effectiveness and consistency of housing supply policies by establishing a system that can manage various information related to housing.
○ Also, it is necessary to improve the legal system in the direction of solving problems that may arise due to changing social structures in the long run. To this end, it is necessary to redefine the concept of generation that gives supply priority to the Rules on Housing Supply by reflecting changed perceptions. In addition, it is necessary to consider solutions such as “review of the general supply selection and additional points system” and “segmentation of special supply demand' to solve the disproportionate housing supply problem.
▶ The results of this study are expected to help realize stable real estate market operation and ultimately realize the housing welfare of the common people and the people.
○ "Residence" is a basic factor in our daily lives and can contribute to the creation of a pleasant and stable housing environment guaranteed by the Constitution and "Residence Rights" to the public through the results of this study.
○ By securing systematicity and consistency of housing supply laws and policies, the effectiveness of housing supply policies can be enhanced, and a stable real estate market can be realized to contribute to achieving the housing welfare of the people.