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Housing Dynamics in Korea

Building Inclusive and Smart Cities

image of Housing Dynamics in Korea

Housing in Korea has been part of the government policy development agenda for the past three decades contributing to reducing the historical housing shortage and improving the quality of dwellings. Despite its achievements, Korea now faces a housing affordability challenge as prices are too high for several social groups (i.e. newly wedded), owner occupancy levels are decreasing, and social housing is struggling to meet demand. Korea has a complex social housing system largely focused on low-income households, who still suffer from housing poverty in terms of housing stability, affordability and quality.

 

A holistic view on housing policy to promote a more inclusive society and sustainable economic growth is needed. To overcome the current housing challenge requires expanding the network of public housing providers by including the private and community sectors that could alleviate the government’s financial burden. Korea is linking housing and urban regeneration strategies to respond to the complex challenges of social inclusion, job creation, housing and economic revitalisation. Korea has been at the forefront of smart city development for more than a decade, which has brought benefits to Korean cities such as integrated transport systems, and it is now committed to applying the concept as a vehicle for inclusive growth.

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Executive Summary

Korea’s record for improving access to quality housing has been significant. This has been due, in part, to the introduction of minimum standards (e.g. number of rooms and floor space differentiated by size and composition of households) and the direct government support for housing construction. Korea has a wide set of planning, financial, legal and institutional instruments to implement its housing welfare policy contained in the Comprehensive Housing Plan (CHP). However, although the long-term public rental housing inventory has been steadily rising over the last decade, its share (5.5%) of total housing is still below the OECD average (8%). The government’s housing welfare strategy focuses on direct financial assistance through a number of financing instruments (e.g. subsidies, mortgages, tax relief) managed by national and in some cases municipal government. The strategy also includes specific programmes intended to facilitate access to private rental housing such as the jeonsei deposit loan.

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