Following the government's expanded designation of land transaction permit zones, demands for de-designation are emerging across the affected local governments. Heads of local governments designated as land transaction permit zones are urging a full review of the regulation, saying it "distorts the market." Under current law, if a local government head requests the lifting or reduction of a permit zone, the government must review the de-designation of the land transaction permit zone. However, given the overheated real estate market, the likelihood that the government will withdraw the designation of land transaction permit zones is virtually slim.
According to the Seoul Metropolitan Government on the 23rd, the Council of Seoul District Mayors the previous day issued a statement calling for the immediate withdrawal and minimization of the citywide expansion of land transaction permit zones included in the government's Oct. 15 real estate measures. The districts that joined the statement were Gangnam, Seocho, Songpa, Yongsan, Mapo, Gwangjin, Yangcheon, Yeongdeungpo, Dongjak, Gangdong, Dongdaemun, Jung, Jongno, Seodaemun and Dobong—15 in total.
Seo Kang-seok, Songpa District Mayor and chair of the Council of District Mayors, said, "The government's unilateral and sweeping regulation undermines the foundation of local autonomy and infringes on residents' property rights," adding, "Because the land transaction permit system is a strong sanction on private property, it should be applied only in extremely exceptional cases, yet it was decided unilaterally without consultation with the Seoul Metropolitan Government or the districts." Seo went on to say, "You cannot regulate forever, and lifting regulations itself is a factor that shocks the real estate market," stressing, "I do not think binding the entire city of Seoul is an appropriate measure."
Before the 15 districts in Seoul, Uiwang in Gyeonggi Province on the 21st issued a petition to the Ministry of Land, Infrastructure and Transport (MOLIT) calling for a full review of the designation of adjustment target areas, speculative overheating districts, and land transaction permit zones.
As local governments request the easing of regulations such as land transaction permit zones, under current law the government must examine whether there are valid reasons for the request. According to Article 10 of the Act on Report on Real Estate Transactions, etc., if the Minister of Land, Infrastructure and Transport or a provincial governor recognizes that the grounds for designating a permit zone no longer exist, or deems a request from a relevant provincial governor, mayor, county head, or district mayor to lift or reduce a permit zone to be justified, they must, without delay, lift the designation of the permit zone or reduce part of the designated permit zone.
However, it appears difficult for the Ministry of Land, Infrastructure and Transport (MOLIT) to ease regulations such as land transaction permit zone designations. Easing regulations could amount to admitting that the policy design was inadequate. In addition, the fact that home prices surged earlier this year after the lifting of land transaction permit zones is also a burden for MOLIT. A MOLIT official said, "There are requests from district mayors, but it has not been long since land transaction permit zones were designated, so it will be difficult to withdraw them."
Some also note that because lifting land transaction permit zones is likely to cause side effects, the government should have been prudent in deciding to designate land transaction permit zones in the first place.
Oh Se-hoon, the Seoul mayor, at the Public Administration and Security Committee's Seoul audit held at the National Assembly that day, pointed out that there should have been sufficient discussion from the stage of deciding whether to designate land transaction permit zones. Oh said of the designation of the entire city of Seoul as land transaction permit zones, "The land transaction permit system is easy to designate but hard to lift. It is obvious that lifting it will cause unforeseen side effects," adding, "Caution should have been exercised in the designation, but I express deep concern and regret that it was designated at the outset without sufficient discussion."