Work with local governments before searching for land

The direction of the Lee Jae Myung administration's housing policy became clearer after the three-hour public forum on real estate chaired by the president on Wednesday.

Judging from his remarks, the government appears set to strengthen property holding taxes, tighten lending restrictions on homeowners, provide targeted support for young people, newlyweds, first-time buyers and low-income households, and address the growing concentration of demand for a single high-value home. The broad framework is taking shape, although the scope and intensity of each measure have yet to be announced.

As the saying goes, however, the devil is in the details.

Even strengthening property holding taxes will be far from straightforward. President Lee himself acknowledged the dilemma, saying that matching the levels seen in many advanced countries would require tripling current taxes. He added that such a move could provoke a public backlash, making compromise unavoidable.

The government should therefore pursue a balanced and sustainable policy. Any reform must minimize taxpayer resistance while remaining broadly acceptable. Adam Smith's principles of taxation — fairness, predictability, convenience and administrative efficiency — remain relevant today. Policymakers should also communicate clearly with those who would bear heavier tax burdens and consider retirees who own valuable apartments in Seoul's Han River districts but have little regular income. Most importantly, higher holding taxes should be accompanied by lower transaction taxes, giving homeowners a practical way to sell rather than trapping them with rising tax bills.

By contrast, housing supply received relatively little attention during the forum. Supply measures inevitably require more time than demand controls, so immediate results cannot be expected. Even so, the government needs to demonstrate greater commitment, particularly on redevelopment and reconstruction projects.

President Lee remarked that Seoul has little land left for new housing and even suggested taking a helicopter tour over the metropolitan area to search for available sites. Yet a meaningful supply strategy should begin elsewhere. The central government should first work closely with local governments, especially the Seoul Metropolitan Government, which possesses detailed knowledge of local conditions.

Expanding redevelopment, accelerating reconstruction and securing land for new housing all require close cooperation between central and local authorities. Without that partnership, supply policies will struggle to gain momentum.

Searching for land from a helicopter may capture attention, but effective housing policy begins with collaboration. Before looking to the skies, the government should sit down with local governments and build a practical strategy together.