[Op-Ed] Housing Insecurity Worsened by the Paradox of Rental Regulations

Falling transaction volume and delayed contracts, with side effects including fewer jeonse listings and a rising share of monthly rentals / Rental regulations clash with the way the market works, distort prices, and push some transactions outside the system / Policy should be adjusted to restore contractual autonomy and guarantee free contracts between landlords and tenants

Debate is once again intensifying over the effects of recent policies surrounding the rental market. This is because the guidance period for the jeonse and monthly rent reporting system has ended, and fines began to be imposed on contracts signed from June 2025 onward, while the impact of the right to request contract renewal on the market has also gradually become clearer since its implementation. These systems were introduced with the aim of strengthening tenant protection and increasing market transparency, but their side effects need to be reviewed.

On the surface, the policies appear to have produced some results. According to the Ministry of Land, Infrastructure and Transport, the cumulative number of jeonse and monthly rent reports has exceeded 5 million, and transaction information is being accumulated more quickly than in the past. However, in some regions, cases of declining transaction volume and delayed contracts continue, while side effects such as a reduction in jeonse listings and an expanding share of monthly rentals have also steadily emerged.

These mixed results show that rental regulations are colliding with the way the market functions. The rental market is formed through contracts with a wide range of conditions interacting with one another, but as policy manages this within a fixed framework, the market’s ability to adjust on its own is gradually weakening.

The first visible change is a contraction in transactions. As reporting procedures and regulations have been added, the time and cost burden involved in the contracting process has increased. When transaction costs rise, the market naturally responds by delaying or reducing transactions. In other words, regulations intended to secure information end up reducing transactions themselves.

The right to request contract renewal has increased housing stability for existing tenants, but it has correspondingly limited landlords’ freedom of choice. As a result, new contracts are seeing more deposit increases and more conversions to monthly rent. In particular, landlords tend to set higher prices in the initial contract in anticipation of future difficulty in adjusting prices, and this ultimately increases the burden on new tenants.

Another problem is that inflation and market conditions are not easily reflected sufficiently in prices. As the range of rent increases is capped at a certain level, rising interest rates and changes in consumer prices cannot be properly reflected in prices. As a result, while prices are suppressed in existing contracts, new contracts experience much steeper increases, creating a distorted pattern.

The market is also showing efforts to avoid regulation. To meet reporting thresholds, some split contract amounts or raise maintenance fees instead of rent, and in the end, a policy intended to secure information may actually undermine the reliability of that information.

Despite the goals of protection and transparency, current rental regulations are weakening market flexibility. Transactions are declining, prices are being distorted, and some transactions are being pushed outside the system. In particular, as a structure emerges in which the burden differs between existing tenants and new tenants, the tenant-protection effect intended by the policy is not being fully realized.

Accordingly, rather than directly controlling prices, policy needs to be adjusted in a direction that restores contractual autonomy. For the right to request contract renewal, the current 5% cap on increases should be applied flexibly according to inflation and regional conditions, and the jeonse and monthly rent reporting system should reduce the burden on transactions by raising reporting thresholds and simplifying procedures.

At the same time, institutional safeguards are needed so that reported information is not immediately linked to taxes or additional regulation, in order to restore market trust. Ultimately, only when free contracts between landlords and tenants are guaranteed will long-term and more stable tenant protection become possible, and renters’ housing insecurity will disappear.

Seohyun Eom, Intern Researcher, Center for Free Enterprise (CFE)

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Original title: [칼럼] 임대차 규제의 역설로 더 커진 주거 불안

Author: Seo-hyeon Eom

Date: 2026-06-17

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&pn=1&idx=29168