Policy measures to relieve the housing cost burden of the young generation can be broadly classified into provision of affordable housing; alleviation of the housing cost burden; mitigation of disadvantages in the housing search, leasing, and occupancy processes; and boosting of residential welfare.
First, small-scale and affordable housing must be made available in regions with high accessibility to public transportation. This requires a variety of approaches including renovation of accommodations and remodeling of vacant houses. A platform for house sharing information is also necessary to register a waiting list and provide a setting for prospective landlord to register rental housing.
2.1 Affordable Housing Supply Reflecting Needs of Young Generation
∙ (Current) Decisive factors influencing young people’s housing decisions include
accessibility to school, workplace, and public transportation and affordability (depending on circumstances)
∙ (Improved) Affordable public shared housing expanded to areas near universities with good transportation access; social enterprise support for providing shared houses from private sector
2.2 Housing Size Reflecting Demand When Supplying Happiness Houses
∙ (Current) Predetermination of housing scale results in certain large-scale housing going unassigned and competition for small-scale housing being high.
∙ (Improved) Applications for desired housing scale accepted in advance after designation of regions to get Happiness Houses, with young generation’s demands reflected in scale of housing supply
2.3 Accommodations Near Universities
∙ (Current) Accommodations used in areas near universities or adjacent urban areas
∙ (Improved) Housing rented out to young people after remodeling; independent spaces should be guaranteed and restaurants and public spaces set up
- Past examples of use in social welfare as homeless shelters
2.4 Remodeling Vacant Homes to Supply Shared Units
∙ (Current) Small-scale support of KRW 20 million provided to landlords when remodeling vacant homes
∙ (Improved) Non-profits and cooperatives interested in supplying shared housing for young people support remodeling costs to tenant recruiters after public purchasing;
shared housing supplied for long periods (eight years or more) in response to young generation’s demand
Second, key money loans with no interest and housing stability funds for young people geared for low-income working adults are recommended in addition to key money loans to reduce the housing cost burden.
2.5 Limited-time Deposit Money Loans with no Interest
∙ (Current) High monthly rent burden continues to rise for young people living in non-residential dwellings such as (half)basement, rooftop, and gosiwon units; Beotimmok Jeonse Deposit Loan Program charges interest of 2.3~2.9 percent
Table 24. Interest Rates for Beotimmok Jeonse Deposit Loan Program (as of July 2017) Deposit amount
Income level KRW 50 mln or less KRW 50–100 mln Over KRW 100 mln
Below KRW 20 mln 2.3% p.a. 2.4% p.a. 2.5% p.a.
KRW 20~40 mln 2.5% p.a. 2.6% p.a. 2.7% p.a.
KRW 40 ~ 60 mln 2.7% p.a. 2.8% p.a. 2.9% p.a.
∙ (Improved) Subsidized key money loans offered at zero interest for limited time until housing conditions improve (e.g., two to five years)
- Up to KRW 1 billion needed when using National Housing and Urban Fund to provide interest support for 2,000 people each with deposit loans of KRW 20 million (2.5 percent p.a.)
2.6 Consider Limited-time Housing Allowance for Young Generation
∙ (Current) Housing benefits apply only to lowest-income segment; young people excluded for being capable of working
∙ (Improved) Housing allowance benefits provided to relieve rent burden of young generation
- Housing cost support may also be saved and assistance provided through matching funds when raising deposit costs
Third, more basic education on rental housing is needed given the disadvantages in locating and leasing housing. This includes additional education on housing in formal education as well as compulsory related education and efforts to promote residential awareness among new and established students as part of a university’s social responsibility. Institutions should also set up residential counseling centers on campus and receive reports of and provide restitution for abuse. Leaflets and/or mobile apps are needed to provide accessible information for young people, along with reporting centers to crack down on the brokering of illegally converted structures and prevent abuse. Government support should also be considered for deposit insurance for the return of key money.
Source: http://nhuf.molit.go.kr/FP/FP05/
FP0502/FP05020101.jsp (last accessed on July 21,2017)
2.7 Rectifying Information Asymmetries in Housing Search and Leasing Process
∙ (Current) Young people are at a comparative disadvantage in the housing search and leasing process due to lack of basic information and experience.
∙ (Improved) Basic information about risky areas when signing a housing lease are available in university neighborhoods, on public organization homepages, and at government offices and real estate agencies.
2.8 Basic Education on House-searching and Lease Signing
∙ (Current) Education on basic life necessities extremely lacking in post-high school curriculum
∙ (Improved) Basic education on house-hunting and lease signing, housing leases, and lessor/lessee rights and obligations included in high school curriculum
2.9 Mandating Tenancy Reporting and Policing Illicit Activities
∙ (Current) Lack of adequate punishment for lessors and brokers who demand non-reporting of tenancy
∙ (Improved) Discrepancies in resident registration and actual residence determined through comprehensive survey of university student leases and residential sites;
reporting center opened for cracking down on failure to report (e.g., Juparazzi) and automatic reporting system instituted
2.10 Reduced Brokerage Fees for Non-residential Dwellings
∙ (Current) Private academies, gosiwon, and offices included as secondary facilities for neighborhood living used as residences or difficult to classify by exterior
∙ (Issue) Brokerage fees for residential rentals of illegally converted structures and those built as neighborhood living facilities reach as high as 0.9 percent, more than 0.4–0.5 percent for regular housing
∙ (Example) Brokerage fee for unit costing KRW 500,000 in monthly rent with KRW 10 million deposit01 : KRW 240,000 (0.4 percent) for house, KRW 540,000 (0.9 percent) for commercial units but using residential purpose for neighborhood living facility
∙ (Improved) Same rates over short term applied regardless of structure use when rented for residential use; fixed transaction rate for deposit rentals below certain amount applied over long term
2.11 Prohibiting Brokerage of Illegally Converted Structures
∙ (Current) Problems with legal protection for young people living in non-residential or illegally converted structures
∙ (Improved) Permanent center instituted for reporting illegally converted structures, stronger punishment and fines for those brokering such structures
2.12 Government Support for Insurance for Deposit Protection
∙ (Current) Subscribers in the insurance system meant to protect deposits are consumers, who face excessively high premiums ranging between 0.128 (Housing &
Urban Guarantee Corporation) to 0.153 (SGIC) percent
- Premiums for KRW 100 million in key money amount to KRW 128,000~153,000 per year
∙ (Improved) Responsibility for returning key money lies with the lessor, thus costs can be distributed 50:50 between the lessor and lessee, or the government could cover premiums for low-income young people
01. Rate applied for converted key money value of KRW 60 million for KRW 10 million deposit with rent of KRW 500,000
Finally, general residential welfare should be improved with the institution of minimum (quasi-) housing standards for dwellings used by single-person households and young people, including quasi- and shared housing. Quasi-housing should also be included when registering private rental housing to improve residential conditions for vulnerable population segments. To promote self-sufficiency, programs for matching small-scale deposits and standards for assessing quasi-housing maintenance fees should be introduced.
2.13 Establishing Minimum (quasi-) Housing Standards for Era of Single-person Households
∙ (Current) Minimum housing standards focus on three- to four-person households and inadequately reflect single-person residence types; no residential standards exist for shared housing
∙ (Improved) Minimum housing standards reworked to consider single- and two-person housing demand and shared housing conditions; minimum quasi-housing standards established for quasi-housing chiefly occupied by small one- and two-person households
Minimum housing standards focus on three- to four-person households inadequately reflect single-person residence types; no residential standards exist for shared housing
CHAPTER VI.
Conclusion
The third UN Habitat Conference (an event held once every 20 years) was hosted in 2016 in Quito, Ecuador, where a New Urban Agenda was adopted. The event reaffirmed the importance of housing as the central means of achieving the New Urban Agenda. The five pillars needed to tackle global housing issues are adequate and affordable housing supply; inclusive and integrated housing policy; and upgrade of informal settlements. This was largely aimed at revamping poor residential environments in underdeveloped countries. The framework, however, can also be applied to assist Korea’s young generation with their housing problems. Even in Korea, affordable housing must be made available to those facing difficult conditions such as failure to meet minimum housing standards and the excessive burden of housing costs. Young people must be considered targets for housing support and policy must be integrated with those in other sectors. Housing issues for young Koreans originated with past practices whose consequences have been manifested today, and ample support and efforts can ensure future sustainability. Rather than dismissing the young generation’s housing issues as “someone else’s problem,” Korean society must make it its own problem, adopting an inclusive stance of shared concern and reflecting this in policy to broaden the horizons of residential welfare. Finally, only when this is combined with responsible efforts by the young generation to improve self-sufficiency and develop into full-fledged and responsible members of society can the legitimacy of housing support for young people gain broader support.