A new agency isn’t necessarily the fix for real estate excesses

The ruling Democratic Party of Korea on Tuesday proposed a bill to establish a state regulator tasked with supervising the property market.

Placed under the Prime Minister’s Office, the watchdog would be granted broad powers to plan, oversee, and coordinate the probing, investigative, and sanctioning functions of eight related ministries and agencies.

Its staff would have special judicial police status and be fully in charge of examining suspicious real estate transactions.

They would also be empowered to carry out direct investigations into a wide range of alleged offenses, including illegal donations, price manipulation and organized land speculation.

They would be able to demand that those targeted for inquiry appear and give statements, require the submission of ledgers and documents, seize and retain them, and conduct on-site inspections if necessary.

The most controversial aspect of the bill is its access to financial information.

The bill allows the watchdog’s special judicial police to access and examine citizens’ financial transaction records and loan data without a court-issued search warrant.

Current law tightly restricts access to an individual’s financial data, allowing it only with a court-issued warrant or upon proof of serious criminal suspicion, such as money-laundering offenses.

The party says that a court warrant would be required if an agency inquiry is upgraded to a formal criminal investigation.

However, when the boundary between broad data access and a formal criminal investigation is unclear, concerns persist that the constitutional warrant requirement will be undermined.

There is also a risk that the watchdog could be misused for behind-the-scenes investigations or surveillance targeting political opponents and other disfavored individuals and institutions.

If the bill becomes law, a mere administrative agency would, under the banner of “constant monitoring,” be granted an easy and indiscriminate path into the public’s property rights and privacy.

The premise of treating citizens as potential criminals and placing their private lives under constant scrutiny for administrative convenience invites justified criticism as an excessive use of state power.

As a supposed safeguard, the party has floated prior deliberation by an oversight council to be created to manage the watchdog’s relations with relevant agencies, yet that council itself would still sit under the Prime Minister’s Office, offering little meaningful restraint.

The privacy controversy is unavoidable as long as an administrative agency retains access to sensitive personal information without oversight by the judiciary.

It is also open to question whether it is appropriate to set up a separate organization of some 100 staff members in the name of cracking down on real estate speculation.

Agencies such as the National Tax Service, the police, the Financial Supervisory Service, and the Ministry of Land, Infrastructure and Transportation are already equipped to tackle property speculation, with vast organizations and manpower at their disposal.

The proposal to add another supervisory body duplicates functions already handled by existing organizations, offering little practical benefit.

Moreover, establishing a supervisory agency does not guarantee that real estate speculation will be curbed.

Amid a property speculation frenzy that left low-income households reeling, the Moon Jae-in administration in 2020 pushed to establish a similar supervisory agency but eventually scrapped the plan.

That decision was based on concerns that excessive regulation could distort the market.

It is true that real estate issues deserve special attention, given their direct impact on people’s lives and the formation of their assets. Establishing this agency, however, must be approached with caution, as it risks doing more harm than good.

It is far from addressing the core issue of increasing housing supply and could chill the market with after-the-fact regulation.

Intruding on individuals’ financial privacy under the guise of oversight demands a rethink. Expanding supervisory agencies risks only deepening bureaucratic clutter.

Rather than leaning on surveillance and control, the government and ruling party should first consider reasonable policy alternatives that align with market mechanisms.


khnews@heraldcorp.com