The largest parliamentary research group within the Democratic Party of Korea, titled 'The economy is Democratic Party,' convened on the 8th to discuss measures to curb speculation in the real estate market and options for liquidating real estate assets. In particular, the 'shared equity housing system,' which allows landlords and tenants to share housing equity, was presented as a potential solution. Attention is drawn to whether the political sector will push for legislation to expand the 'equity housing system' to stabilize the real estate market and restore the residential ladder.
At the policy lecture of 'The economy is Democratic Party' held at the National Assembly that day, Lee Kwang-soo, representative of 'Kwang-soo's Fortune Telling Room,' noted that the proportion of financial assets held by Korean households is lower compared to major countries such as the United States and Japan, and suggested three asset restructuring measures, including the 'shared equity housing system.'
The 'shared equity housing system' involves landlords and tenants voluntarily agreeing to divide ownership shares of a dwelling. Landlords sell part of their ownership equity to tenants, who in turn receive stable housing rights (priority rental rights) and the right to purchase the corresponding dwelling in the future (purchase request rights). This structure offers benefits like asset liquification, reduced transfer taxes, and alleviated comprehensive real estate taxes for landlords, while tenants can share in housing stability and some revenue from the real estate, potentially benefiting both sides.
In addition, the representative proposed measures for ▲household debt restructuring ▲the establishment of a 'land housing bank' and 'national REITs' to secure public housing. In particular, national REITs were suggested as a means to simultaneously address the delay in redevelopment and reconstruction and secure public rental housing supply.
Household debt restructuring refers to the application of new lending regulations for existing mortgage borrowers who own multiple dwellings or hold real estate for investment. If they sell property to repay loans, the supply of real estate on the market will increase, stabilizing housing prices. Additionally, those without homes could buy dwellings through loans, increasing home occupancy rates without raising overall household debt.
The seminar also evaluated the 'June 27 Real Estate Measures' announced by the Lee Jae-myung government. It received positive evaluations for curbing speculative demand by limiting loans for high-priced dwellings in the metropolitan area and lowering market sentiment. They collectively voiced that capital in the real estate market needs to be directed toward financial markets.
Kim Byeong-ki, acting party leader and floor leader, said, 'President Lee Jae-myung diagnosed that the concentration of investment means in real estate has turned housing into an investment and speculation tool, leading to residential instability,' and noted, 'similar remarks were made during dinner with the parliamentary standing committee group the day before (the 7th).'
'Speculation is psychological. The diversity of investment markets, such as financial markets, needs to be improved. I expect that the amended commercial law will provide a strong incentive for capital concentrated in real estate to move into financial markets,' he emphasized, adding, 'While promoting policies for the KOSPI 5000 era, we must continuously confirm that real estate is not the only golden market.'
The chairperson of the meeting, five-term lawmaker Kim Tae-nyeon, said, 'Our asset market structure is about 70% real estate and 30% capital markets, so stabilizing real estate policies is crucial in getting that ratio to at least 50-50.'
The ruling party lawmakers showed great interest in the proposals made during the lecture. After the lecture, Kim Tae-nyeon met with reporters, stating, 'We had only discussed shared equity for newly built apartments so far, but the idea of sharing equity with tenants in existing dwellings is a new concept.' He continued, 'Also, the aspect of utilizing various pension funds or private REITs for financing and activating the supply of public housing was impressive.'
The existing representative shared equity housing currently in operation is the 'equity public housing' based on public maintenance. Introduced in public redevelopment areas under the Urban and Residential Environment Maintenance Act, this system allows indigenous residents struggling to bear redevelopment fees to co-own dwellings with public implementers (SH Corporation, LH Corporation). Residents initially buy only a portion of the equity to move in and gradually purchase equity over time, ultimately owning 100%.
Recently, the financial authorities proposed the 'equity housing finance' system. The authorities are considering providing part of the funds for home purchases in the form of 'equity investment' by policy financial institutions, while buyers cover the rest with their own capital and bank loans. During this process, homeowners will enter into a co-ownership relationship with the Korea Housing Finance Corporation (HF), and capital gains from sales in the future will be distributed according to equity ratios. It is suggested that during the residency period, monthly rent in the form of 'dividends' on HF equity is paid. This is seen as a way to prevent excessively high borrowing by individuals and contribute to creating a real estate market focused on genuine demand.
The 'shared equity housing system' proposed at this meeting is distinct in that it institutionalizes a contracting structure between private entities, unlike existing public-centered or finance-centered equity systems.
Meanwhile, 'The economy is Democratic Party' is set to hold its second lecture on the 15th, themed 'A roadmap for resolving Korea's discount and achieving the KOSPI 5000 era.' Launched in August of last year, 'The economy is Democratic Party' is the largest research group in the Democratic Party, with over 100 lawmakers participating, and it officially resumed activities that had been temporarily suspended after the presidential election.