The government will roll out nationwide what it calls "1,000-won homes" to ease housing costs for young adults outside the greater Seoul area. Under the plan, the Korea Land & Housing Corporation (LH) will buy homes in non-metropolitan regions and rent them out for 1,000 won a day, or 30,000 won a month. The government has earmarked 1.4 trillion won (about $1 billion) in next year's budget to supply 10,000 units first, with another 10,000 to follow the year after. The move expands nationwide a model already tried by local governments including Incheon, Pohang and Boryeong, whose ultra-low-cost rental housing for young adults drew a strong response.
The intent — lowering housing costs for young people squeezed by a tough job market and high prices, and encouraging them to settle in their regions — is easy to sympathize with. Buying and refurbishing vacant or aging homes could also improve living conditions in provincial areas. But upgrading this from a local government program to national policy requires close scrutiny of sustainability, fairness among beneficiaries and fiscal efficiency. It should not be pushed through without detailed preparation, only to end up as another showpiece youth policy.
First, because large benefits are concentrated on a few even among those who meet the eligibility criteria, the risk of "lottery-style welfare" deserves attention. If some young people pay 500,000 to 1 million won in monthly rent while others pay just 30,000 won, controversy over "jackpot housing" will be hard to avoid. Fairness questions may also surface with existing public rental tenants who pay more than that. Since the rent gap and property management costs will ultimately have to be covered by taxes, the long-term fiscal burden must be weighed as well. There is also a risk that a rush to fill unit quotas leads to overpaying for homes in poor locations and of poor quality.
Above all, the government must not get fixated on the eye-catching figure of "1,000 won a day." It should vary how much tenants pay according to income, assets and local rent levels, and design the support period and eligibility more precisely. Monthly rent of 30,000 won amounts to virtually free housing welfare. What, then, of low-income renter households struggling with hundreds of thousands of won in rent every month? "1,000-won homes" are only a short-term remedy. The government should keep in mind that expanding housing supply — including reviving private redevelopment and rebuilding projects — is the fundamental answer to housing stability for young adults and low- and middle-income households.
