The Paradox of “One House per Household”... Time for Flexibility Over Regulation

The paradox is that regulations intended to stabilize housing prices are instead driving up home prices in high-demand areas. The “one house per household” policy, promoted under the banner of protecting end-users and stabilizing the housing market, has in fact caused demand to concentrate and produced regional imbalances.

Higher taxes on owners of multiple homes, tighter lending regulations, and the expansion of regulated areas have effectively distorted overall housing policy around the principle that “people should own only one home.” Although these measures were justified as protecting end-users and curbing speculation, over time housing price instability has worsened and living inconvenience has only increased.

As regulations enforcing one house per household have increased, they have only stimulated the market psychology that “if you can buy only one, you should buy the most valuable one.” As a result, people have come to prefer homes in popular areas even if it means stretching themselves financially, and demand has therefore become concentrated in certain regions. Meanwhile, as regulations have tightened, supply in those popular areas has become even scarcer.

The perception has spread that, rather than buying a home at a reasonable price in the area where one lives, it is better to overextend oneself to purchase a popular apartment in another region. This has increased upward pressure on housing prices, and in the end, misguided policy has made real estate price instability a part of everyday life. The one house per household policy has driven demand into popular areas in pursuit of one “smart” home.

Another problem is that real estate policy has failed to sufficiently reflect the diversity of actual housing demand. Real-world housing demand is not simple. People own homes for many reasons, including job relocation, children’s education, caring for parents, and region-based business start-ups. In many cases, people need more than one home. Yet current policy treats housing needs uniformly and restricts all multiple-home ownership by categorizing it indiscriminately as “speculation.”

As a result, even ownership of multiple homes for actual residence and livelihood purposes is restricted, and flexibility in people’s lives is being suppressed. This policy imposes a particular economic burden on those living in small provincial cities, as well as on groups with high mobility, such as the elderly and young people. Regulations that fail to reflect reality are worsening housing insecurity.

Another issue is that the very premise of the policy is based on a view that does not match reality. At the foundation of the policy is the simplistic notion that “multiple homes = speculation.” But owning multiple homes is not necessarily an act aimed at unearned income, and holding a certain number of homes can serve a variety of purposes, including asset allocation, retirement preparation, and dispersed family living arrangements.

Nevertheless, the policy has been misused as a political tool, making the mistake of prioritizing symbolism and inflaming public opinion rather than ensuring effectiveness. As a result, disadvantages for housing consumers have increased and market instability has deepened.

The one house per household policy should ideally be abolished altogether. But if that is politically burdensome, a partially flexible approach is needed. A gradual easing of regulations that reflects regional characteristics is the alternative. Rather than regulating all regions uniformly in the same way, policymakers should consider a phased approach that begins by easing regulations outside the Seoul metropolitan area.

Housing demand in non-capital regions remains relatively subdued. It is time to find a realistic solution that restores market function and stabilizes housing through flexible policy innovation that reflects the characteristics of regional demand.

Sung-no Choi, President, Center for Free Enterprise (CFE)

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Original title: ‘1가구 1주택’의 역설… 이제 규제보다 유연성

Author: Sung-no Choi

Date: 2025-05-15

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=27653