(EDITORIAL from Korea JoongAng Daily on Sept. 17)

The Democratic Party in South Korea has advocated for extending the application period for exemptions from the owner-occupancy requirement in land transaction permit zones. The government initially relaxed these rules in May, but the unintended consequences have led the ruling party to request another extension just four months later.

The October 15 housing measures designated all of Seoul and parts of Gyeonggi as land transaction permit zones. The stringent regulations, designed to curb speculative buyers, inadvertently led to complications in the housing market. Sellers with tenants found it challenging to sell their homes, and tenants faced increased housing insecurity due to tightening jeonse and monthly rental markets.

In May, the government granted a temporary extension for tenants without homes to buy tenanted properties and postpone moving in until the lease expires. The ruling party now seeks to prolong the application deadline through the following year and allow tenants to renew their leases. The proposed changes aim to provide homeowners with more time to sell properties and offer tenants greater housing stability.

If implemented, the extension could postpone the owner-occupancy requirement until 2031. The repeated modifications to the land transaction permit system reflect the government's failure to adequately assess the system's potential side effects. The land transaction permit system is not an isolated issue; last month, the government introduced more stringent tax reforms, increasing the burden on owners of unoccupied homes.

Public opposition forced the government to revise its proposal, and now the ruling party is preparing further revisions. However, these patchwork solutions are insufficient to address the underlying issues plaguing the housing market. The simultaneous surge in home purchase prices, jeonse, and monthly rents indicates that regulation and taxation alone cannot stabilize the housing market.

The government and ruling party must reconsider the direction of housing policy, rather than perpetually patching the system, which creates new distortions and uncertainty for both owners and tenants.