Review of Policy Options for Stabilisation of Private Rental Housing Market in Korea: Focusing on International Comparison

Han, Man- Hee; Park Joon

doi:10.15793/kspr.2017.94..008

The purpose of this study is to examine the policies for stabilisation of rental housing market such as rent control, housing benefit, and provision of social housing. This study adopted three methodologies to extract main policies for stabilisation of rental housing market and analyse the applicability of the polices in the context of Korea. They are an extensive literature review on social housing policies, comparative analysis with the liberal welfare regime countries by Esping-Andersen(1990) category, and interviews with housing policy experts. The polices for the stabilisation of rental housing markets can be categorised into three: 1) rent control to reduce the asking price; 2) increase of the affordability of lower income group with housing benefit; and 3) reduction of the pressure of rent increase by supplying more social housing in the market. Considering the proportion of private rental housing market is 40% in Korea, introducing a strict rent control is likely to lead to the side-effects of shift of the burden to tenants at early stage and the decrease of rental housing supply. It would be more appropriate to introduce lessor registration system with an effort to secure more affordable houses than rent control. Expansion of housing voucher needs to be carefully handled considering the level of income of the beneficiaries as it has problems of increase in rent level and budget limit. Lastly, a strategy to increase the stock of social housing by public and non-public sector and competition with private rental housing so that the entire rental housing market can be stabilised and the burden of tenants can be reduced. A system which can invite the participation of ‘national houisng and urban fund’, non-profit organisations, and limited-profit organisations to build social housing needs to be considered before introducing the strict rent control.

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