Jun-Hyung Kim (2018. 9), "Why do we levy on the redevelopment profit?", Journal of Korean Social Trend and Perspective, 104: 262-281.
Abstract
This paper examines the legitimacy of the Levy on Excess Return of Redevelopment (LERR) analyzing whether or not LERR achieves its two stipulated goals: ‘stabilization of housing prices’ and ‘social equity’. First, it is not obvious that LERR stabilizes housing prices. Even if the prices rise, its upper bound exists－the regional average of newly build housing. Although it sometimes shows rapid growth, it should be regarded the growth based on consumption demand since the government recently enforced strong regulation on investment demand. However, the current LERR treats consumption demand as same as investment demand. Second, the social equity seems to represent the housing wellbeing of low-income households. Yet, LERR neither do set the levy based on the negative effects on affordable housing, nor use the revenue of levy for affordable housing provision. The most important reason why LERR fails to achieve its main goals is that it is designed and implemented by the central government, although it is purely local issue to evaluate the impacts of redevelopment projects, to grant permission to them, and to minimize their side effects to communities. This implies that LERR can win a social consensus only after the local government includes it in its regional housing policy and uses it to expand regional affordable housing opportunity.
Keywords
levy of redevelopment; redevelopment project; law of levy on excess return of redevelopment; affordable housing; regional housing policy