We don’t ask about income or assets … We supplied 110,000 homes for the ‘homeless’ public charter

As the price of jeonse in Seoul rose for more than 70 weeks and recently the cheonsei crisis spread to local metropolitan areas, the government came up with a ‘jeonse plan. The key is to supply 114,000 rental housing units nationwide (70,000 units in the metropolitan area) for two years. LH, etc. secures the number of vacancies and new multiple homes between public leases and supplies them through lease. To respond quickly to the jeonse crisis, it plans to supply 49,000 households, more than 40% of the volume, in the first half of next year.

39,000 homes are prioritized in public leases that are vacant for more than 3 months. In the metropolitan area, there are 16,000 public rental vacancies and 26,000 accommodation facilities, such as shopping centers and hotels, were remodeled to provide additional rent. Rental housing provided in this manner eliminates income and asset standards and is eligible for the homeless.

A plan is also being promoted to buy houses built by private construction companies and turn them into a “public statute” that can live up to 6 years. The goal is to supply 63,000 homes for five years, 20,000 homes for the middle class, with a dedicated area of ​​60m2 to 85m2, where 3-4 people can live.

It is planned to supply 40% of the volume through intensive supply by the first half of next year, but it seems that it remains to be seen if it will help solve the recent Jeonse crisis.

It is positive that government-provided rental housing includes 3-4 people, but some point out that the focus is still on 1-2 households. The current jeonse crisis is mainly due to the evaporation of the number of cheonsei from households with three or more people, as the third lease law (rental lease report system, contract renewal application system and rental system) cheonsei roof) has been fully implemented.

In general, this countermeasure can be found in that it suggests a long-term political direction rather than solving the recent Jeonse crisis. It means that the coordinates of government policy are shifting from the existing policy of “low income focused rental housing” to “increasing the number of public rental housing” regardless of income.

Jeonse public goods supply, if short-term measures are taken, they become thieves

Land, Infrastructure and Transport Minister Kim Hyeon-mi told a briefing about the “Plan to support residential stability for the middle and common class.” “The result of a combination of factors.

Due to the low and long-lasting interest rate, many rented families are looking for a jeonse that is less expensive than the monthly rent, and the price of the jeonse has risen as the demand for housing has increased. Furthermore, the number of households in the metropolitan area increased from 1,290,000 units in 2016 to 254,000 units in 2019, as the number of households in the metropolitan area increased rapidly in a short period due to the division of households. I put it.

However, Minister Kim also explained that the living environment of the existing tenants was relatively stable. Before the application of the Third Lease Law, the renewal rate of the lease to cheonsei increased from 57.2% to 66.2% in October.

But there is still a long way to go. This is because the cheonsei contract renewal fee cannot cover the severity of the cheonsei crisis that households with three or more people are experiencing. It is also worth paying attention to the point that the cheonsei crisis and rising house prices are not caused by the ‘potential jeonse housing consumers’ that the government will offer, but rather the demand for alternatives to move. Better homes is the main factor in the jeonse crisis and rising house prices.

It is noted that the jeonse crisis due to the 3rd Leasing Law is just beginning, and the full-blown cheonsei crisis due to the explosive rent increase after 2 years, with a suppressed increase of less than 5%, has been delayed after 2 years.

Ultimately, there is a need to keep increasing public rental housing, such as high-quality public schools. It is an urgent task to change the paradigm towards ‘buy, but live’.

There is also a need to closely examine the possibility that government measures to supply rental amounts could cause side effects that further stimulate house prices. Experts note that the effectiveness of the government’s ‘Jeonseed Housing Supply’ policy depends on how well the region, quantity and speed of housing supply actually meet market expectations.