[Open Forum] Repeal of the 3 Lease Laws Is the Answer

In a public opinion poll on abolishing the Three Lease Laws, 45.3% responded that the legislation should be repealed, while 30.4% said it should be maintained or strengthened. In other words, support for repeal was about 15 percentage points higher.

It is quite noteworthy that around 75% of respondents opposed the legislation. Moreover, the fact that public opinion is not merely in favor of amendment but is approaching a majority in favor of repeal can be seen as evidence of strong public backlash against the law. Why is that?

On July 30, 2020, the National Assembly passed the Three Lease Laws, claiming they would promote and protect housing stability for tenants. Enacted the very next day, these measures refer to the lease reporting system, the rent cap system, and the right to request contract renewal, and they were amendments to the Housing Lease Protection Act and the Real Estate Transaction Reporting Act.

With the implementation of the Three Lease Laws, the period during which jeonse prices could remain unchanged was extended from two years to four years. Landlords began raising jeonse prices, and as a result, within just one year, the average jeonse price in Seoul became more than ten times more expensive than in previous years.

It was not only jeonse prices that surged. Disputes between landlords and tenants also increased nearly fivefold. The government passed the legislation on the grounds that it would protect tenants’ rights, but in the end it effectively deprived tenants even of their homes, while causing conflict and confusion among the public.

All of this has taken place within the past year. When the legislation was first proposed, experts repeatedly warned that jeonse prices would soar. Nevertheless, the government and the ruling party pushed it through, even skipping the clause-by-clause review process. As a result, the national average jeonse price, which had been more stable than in the Seoul metropolitan area, also rose by 24.6%. It literally skyrocketed.

Debate continues over how the government should deal with the current situation. It is uncertain whether already elevated real estate prices will come back down, but if the legislation is not repealed, jeonse prices will continue their relentless upward climb. Because of the government’s complacent attitude, the burden has once again fallen on the people.

Many experts, public opinion, and ordinary citizens say that the Three Lease Laws were a failed policy. Yet the government and the Democratic Party are still making the absurd claim that the jeonse market has stabilized because of the lease law. The Three Lease Laws were implemented in the name of protecting tenants. It is hard to tell exactly which tenants were actually protected.

In the end, neither the tenants the legislation was meant to protect nor the landlords who were able to raise jeonse prices were the winners. Wasn’t the government, which was ultimately able to collect more taxes from the public, the greatest beneficiary of this legislation?

The Three Lease Laws, widely called a bad law by the public, will be remembered for a long time in the history of jeonse and the history of ordinary people’s livelihoods in Korea. To prevent any more victims from emerging and to avoid further conflict among market participants, the government should abolish the Three Lease Laws as soon as possible.

Haeun Ahn, Intern Researcher, Center for Free Enterprise (CFE)

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Original title: [자유발언대] 임대차 3법, 폐지가 답이다

Author: Ha-eun An

Date: 2022-03-11

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&pn=9&idx=24578