“Rentals Alone Cannot Help Young People Buy Homes” ... A Housing Ladder Solution Using Urban Renewal Projects Emerges

[Financial News] A proposal has emerged to create a “housing ladder” linked to urban renewal projects, going beyond the simple provision of rental housing to help young people buy their own homes. The proposal calls for securing housing for young people during redevelopment and reconstruction, then connecting rentals to eventual ownership in stages. It also suggests reducing the initial financial burden so young people can gradually acquire an equity stake in a home over the long term.
Hyun-seok Jung, an adjunct professor in the Department of Real Estate at Sogang University, proposed “rental housing linked to urban renewal projects with a later conversion to ownership” at the “Is Homeownership Possible for Young Koreans?” forum held at the National Assembly of the Republic of Korea Members’ Office Building on the 2nd.
Professor Jung proposed using approximately 2,300 publicly owned villas in redevelopment areas held by the Seoul Metropolitan Government and other public entities to connect housing for young people with homeownership. Under the plan, the public sector would rent the homes to young people. Once the urban renewal project gains momentum, their rental deposits would be converted into equity stakes in the homes, allowing them to purchase the remaining shares in stages.
Professor Jung explained that this approach would reduce the burden of having to purchase an expensive apartment from the outset while still enabling young people to move from renting to homeownership. Ultimately, the plan would support young people’s asset building by allowing them to acquire redevelopment apartments at prices available to redevelopment association members.
Hyun-jin Lee, a director at Gyeonggi Real Estate Brokerage Corporation, also proposed “intergenerational-coexistence redevelopment,” which would secure separate housing for young people during reconstruction projects. Lee argued that some units in reconstructed apartments should be designed as independent living spaces for young people, allowing them to accumulate assets while living at relatively low housing costs. The plan would also combine public matching support or shared-equity arrangements to make up for young people’s insufficient initial funds and ultimately help them secure homeownership.
The two experts pointed out that youth housing policy should not stop at expanding the supply of rental housing. They argued that a housing ladder linking urban renewal projects with financial support should be established so that young renters can eventually own homes.
Moon-Sung Oh, chairman of the Korean Association of Tax Policy, emphasized the need for financial and tax support. He noted that it is difficult to curb real estate prices through regulations alone as the money supply increases. Considering the reality of high home prices relative to income, he argued that financial tools such as long-term mortgage loans should be expanded. He also explained that the uniform Debt Service Ratio (DSR) regulations need to be reconsidered.
Political figures also called for expanded housing supply and financial and tax support to restore the housing ladder for young people. At the forum, People Power Party leader Jang Dong-hyuk stressed the need to establish housing policies that make homeownership possible for young people. Im Lee-ja, the People Power Party policy committee chair, said the government should move away from policies centered on long-term rentals, increase the supply of homes in areas preferred by young people, and reduce the financial and tax burdens on first-time homebuyers.
[email protected] Min-kyung Jeon Reporter