Minister Park Sang-woo of the Ministry of Land, Infrastructure and Transport noted that fundamental improvements to the overall housing system are necessary to prevent the recurrence of the jeonse fraud issue.
Minister Park responded to the remark by Democratic Party of Korea Representative Son Myung-soo during the 2nd plenary meeting of the Land Infrastructure and Transport Committee on the 26th, stating that "jeonse loans and security deposits have aspects that encourage jeonse fraud."
Minister Park explained, "Rather than the current approach of operating the jeonse guarantee system in the form of property insurance, it would be appropriate for landlords to join the guarantee as a definite proof of their obligation to return the rental deposit."
Furthermore, Minister Park said, "What is called jeonse is essentially no different from people paying monthly rent to banks like KB Kookmin Bank or Shinhan Bank," adding, "In reality, it is monthly rent, but it becomes a problem like jeonse fraud because it is packaged as if it were jeonse." He added that "a fundamental review and improvement of the overall housing system is necessary."
On this day, Minister Park also mentioned that it may be worth considering expanding the housing & urban fund. He explained that in response to Democratic Party of Korea Representative Song Gi-hun's observation that "the housing & urban fund has significantly decreased," that "while the fund formation is stagnant, expenditures have increased because many loans are given to newlyweds and others, resulting in a situation where surplus funds have significantly diminished."
Minister Park stated, "As it is essential to use the funds for necessary areas, it is necessary to thoroughly review ways to increase the housing & urban fund rather than locking it up." He explained that various internal measures, such as preferential interest rates for subscription savings accounts, are under review in this context.