190,000 Universal Public Rental Homes... Was Demand Ever Verified?

The government recently announced that it will supply about 190,000 units of a new “universal public rental housing” by 2030. The idea is to expand public rental housing, previously centered on vulnerable groups, to include the middle class and to provide high-quality rental housing near transit stations and in urban centers. But before settling on the figure of 190,000 units, the government should first ask whether public rental housing is in fact the type of housing people want.

There is clearly demand for public rental housing. Affordable and stable rental housing is an important social safety net for low-income households, young people, and housing-vulnerable groups. The question is whether large-scale “universal public rental housing” aimed at the middle class is really the kind of supply the housing market now needs.

If good housing near transit stations and in city centers is offered at below-market prices, applicants are bound to flock to it. But this should not be interpreted as a preference for public rental housing itself. Demand for inexpensive housing and demand for rental housing are different.

The Ministry of Land, Infrastructure and Transport’s 2024 Housing Survey also found that 86.8% of general households, 89.6% of newlywed couples, and 75.8% of young households responded that “one should own one’s home.” For many people, the ultimate housing goal still remains homeownership rather than long-term rental. If so, the government too should first confirm actual owner-occupier and rental demand before focusing on the volume of rental housing supply.

How limited urban land should be used is an especially important issue. On the same public housing site near a transit station, the government could build middle-class rental housing for 20-year occupancy, or it could supply for-sale housing that actual demand-side homebuyers without homes can purchase. Since land and fiscal resources are limited, expanding public rental housing also entails an opportunity cost in the form of fewer opportunities to buy homes.

The problem in today’s housing market is not simply a shortage of places to live. There is also strong demand for new apartments at affordable prices in preferred areas, especially homes that people can purchase as their own. The fact that the government separately included 240,000 units of public for-sale housing in this plan also reflects recognition of this demand for homeownership.

Moreover, the areas near transit stations and in city centers where the government plans to provide universal public rental housing are also places where demand for for-sale housing is strong. If prime locations have been secured, the first question should not be “How many rental units should be built?” but rather whether actual demand is greater for rental housing or for-sale housing. It is more rational to let consumers’ choices determine the housing type than to let suppliers’ plans do so.

Housing markets across the country are not the same either. In Seoul and key parts of the Seoul metropolitan area, there are concerns about a shortage of new housing supply, while in some provincial regions unsold housing has been piling up. Rather than first deciding rental and for-sale volumes on a nationwide basis, the type of supply should be adjusted flexibly by region according to local supply and demand conditions and preferences for owning versus renting.

The success of housing policy cannot be judged solely by how many units have broken ground. More important is how much housing has been supplied in the locations people want and in the forms they want. That is why the figure of “190,000 units supplied” must not become the policy goal in itself.

Public rental housing should be provided sufficiently to those who need it, but a housing ladder in the form of for-sale housing should also be opened to homeless households who want to buy a home of their own. The solution to supply shortages lies not simply in increasing the number of homes, but in supplying housing that matches demand.

Before building 190,000 units, what the government needs to verify is not “Can it be supplied?” but “Is this really the housing the public wants?”

---

Original title: 보편형 공공임대 19만호… 수요는 확인했나

Author: Gwang yong Go

Date: 2026-10-07

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&pn=1&idx=29602