Rep. Kim Tae-nyeon, floor leader of the ruling Democratic Party of Korea, proposed that the presidential office, the National Assembly and all of the government ministries remaining in Seoul be relocated to the administrative city of Sejong.
He made the proposal as a way to resolve real estate problems and ease overpopulation in the capital area.
Ruling party heavyweights have gotten behind the proposal.
Rep. Kim Du-kwan said that ending the era of the “Seoul Republic” is the only way for South Korea to go. He added that he is working on a special bill to establish an administrative capital.
Rep. Lee Nak-yon, the previous prime minister under Moon, said the “concentration of everything in Seoul is one of the biggest problems in the real estate market.”
South Gyeongsang Province Gov. Kim Kyung-soo of the party said that real estate problems can be solved when Korea has two or three areas as highly developed as Seoul.
The party proposed an actual capital relocation all of a sudden because housing prices and rental deposits have kept soaring in the Seoul area despite strong steps taken by the Moon government on 22 separate occasions.
Former President Roh Moo-hyun pledged to relocate the “administrative capital” to the Chungcheong region during his campaign for the 2002 presidential election. Roh proposed it as a way to achieve the balanced development of the nation’s land. However, the ruling party proposed it to curb housing prices in Seoul. Capital relocation has become a real estate measure.
Roh’s plan to move the capital was ruled unconstitutional by the Constitutional Court in 2004. The court prohibited the relocation of the presidential office and the National Assembly. The Roh government supplanted the aborted capital relocation with the creation of a “multifunctional administrative city” near Gongju, South Chungcheong Province. The newly created city was named Sejong Metropolitan Autonomous City, and most government ministries and agencies were moved there.
The issue of relocating the capital was revived suddenly amid mounting popular fury over skyrocketing housing prices. It seems to be aimed at deflecting criticism over the government’s real estate policy failures to an issue of regional development.
There are obvious reasons that people rush to Seoul from around the country. However, the ruling party looks away from this reality and has reengaged in the capital relocation drive.
It is questionable whether the plan can solve real estate problems in Seoul. Housing prices have not soared just because the presidential office and National Assembly are located in the capital. Rather, relocation may worsen the situation in both cities.
Sejong has often been viewed as an example of high cost and low efficiency. A large part of the country’s population resides in and around Seoul, but public services have been geographically separated from them, causing inconvenience both to ordinary people and public servants. There is criticism that the administrative city failed to ease overpopulation in the Seoul area and was a waste of government resources.
Capital relocation is an issue requiring consideration of diverse matters including politics, economics and security. Real estate problems are secondary.
The proposal may not be limited to a real estate issue.
Roh said “I won many votes” in the North and South Chungcheong provinces by pledging to relocate the capital. The issue may become a hot button again in the Seoul and Busan mayoral by-elections slated for April next year and, in the long term, the 2022 presidential election. An unnecessary split in public sentiment is feared.
The Moon administration’s real estate policies avoid the essence of the problem -- reconstruction and redevelopment in Seoul.
The ruling party is preparing bills to regulate homeowners more tightly. Bills to raise transfer taxes sharply and allow the indefinite renewal of housing leases are punitive to homeowners, and anti-market.
The basic way to curb housing prices is to increase supply. Seoul has many shabby houses. The definite solution is to supply houses in places where consumers want to live. Reconstruction and redevelopment should be expedited, along with an increase in floor area ratio.
The first thing for the ruling camp to do is to face the reality and admit its policy failures. It should stop looking for a detour and go the regular route.
If it is intent on dodging the bullet with a politically motivated trick, it will only add fuel to people’s fury.