35 Years from Permanent Rental Housing to Public Redevelopment... What Is Needed Is Not 'Many' but 'Doing It Right' [Which 'Public' for Whom 4·End]

[Financial News] When permanent rental housing was introduced in 1989, the role that 'public housing' had to play was clear. It was to provide affordable rental housing to low-income groups who found it difficult to find a home.
Over the past 35 years, the role of public housing has steadily expanded. National Rental Housing was established, followed by the emergence of Happy Housing for young people and newlyweds, and local governments, including Seoul, created and provided long-term Jeonse housing.
The public sector has diversified beyond mere rentals into various forms. Models have emerged ranging from land-lease housing, where the public retains the land and sells only the buildings, to equity-accumulation and profit-sharing public housing sales. In underdeveloped areas where projects are difficult to carry out solely by the private sector, public redevelopment and mixed-use urban public housing projects have been introduced.
'Public housing' has transformed from rental housing for the vulnerable into a massive policy instrument responsible for housing welfare, home ownership, urban renewal, and housing supply. As its role expanded, it performed functions in accordance with its respective purpose, but differing policy objectives began to clash within the single word 'public.'

The results are clear. According to an analysis of Ministry of Land, Infrastructure and Transport (MOLIT) statistics by the Korea Center for City and Environment Research (KOCER), the stock of long-term public rental housing (20 years or more) reached 1,433,000 households in 2024, accounting for 6.2% of total housing. In Seoul, the figure was 301,000 households, reaching 7.7%.
Public rental housing also served as an actual housing safety net. According to the 'Survey on the Status of Public Rental Housing Residency' released by the LH Land and Housing Research Institute in 2023, rents were 30–70% lower than similar private rentals, and permanent rentals were about 15% of the surrounding market rate.
The public function has extended beyond rentals. This is public redevelopment in which the Korea Land and Housing Corporation (LH), the Seoul Housing & Urban Development Corporation (SH Corporation), and others participate to enhance project feasibility and secure public rental housing in areas where private redevelopment has been stalled for a long time.
Lee Yong-ju, Deputy Head of LH’s Special Headquarters for Metropolitan Area Redevelopment Projects, explained, "The key is to rapidly supply high-quality housing through deregulation."

This year as well, the Lee Jae Myung administration presented a target of supplying 372,000 units of public land in the metropolitan area from 2026 to 2030 in the August 13 housing supply measures, and planned to start construction on 62,000 units of public housing this year.
Shin Bo-yeon, a professor in the Department of Real Estate AI Convergence at Sejong University, stated, "Public rental housing is the most direct means of housing welfare in that it lowers housing costs and guarantees long-term residency, whereas land-lease housing requires consideration of counter-benefits such as the burden of land rent and limitations on capital gains in exchange for lowering initial sale prices." She added, "Public development has strengths in increasing the total supply volume through site acquisition, infrastructure development, and density adjustment."
Now that well over 30 years have passed since the introduction of permanent rental housing, diverse voices are being raised regarding to whom and under what conditions public benefits should be provided, depending on individual circumstances.


Then, where should public housing go? I asked Professor Shin, who delivered a special lecture on the topic of "The Current Status and Future of Urban Public Housing Complex Projects" at Sejong University on the 22nd of last month.
"For public housing to be justified, it must be premised on clear demand targets, reasonable pricing, and fiscal sustainability," Professor Shin stated. "Public housing should not be a 'policy of building in large quantities,' but rather a 'policy of providing housing tailored to those who need it,'" he said, suggesting the need to segment demanders more precisely.
In fact, according to a survey by the LH Land and Housing Research Institute, even within public rental housing, income and desired futures varied depending on the type of household residing there. While the average income of public rental households was 58.5% of that of general households, the difference was significant when subdivided into permanent rental housing and Happy Housing, at 44.6% and 82.5%, respectively.
In addition, while 85.8% of permanent rental housing residents hoped to return to public rental housing, a significant number of Happy Housing residents wanted to own their own homes.
The need for a change in the types of housing supplied has also been raised. For instance, it has been pointed out that instead of supplying non-apartment public housing mainly as studio apartments, quality housing suitable for actual demand should be secured, such as housing with two or three rooms where families can reside for a long period.
It is also necessary to place a stepping stone between 'rent or sale.' This involves creating an intermediate stage between renting and full ownership. The government also introduced equity-accumulating public housing in the August 13 measures.
It is a method where one initially purchases only a 25% stake in a house and acquires the remaining stake over 20 to 30 years. The example presented by the government is a structure in which an additional 20%, 20%, 20%, and 15% are acquired every five years. There is also a profit-sharing model. In this model, instead of utilizing low-interest funds from the Housing and Urban Development Fund, a portion of the future profits from the sale of the house is shared with the public.

Professor Shin stated, "We must establish various stages between renting and full ownership," adding, "We need to subdivide rentals, deposit support, housing vouchers, and public housing sales based on income, assets, and household size, and supply them in locations close to workplaces, schools, and transportation."
Advice was also given that the performance of public development should not be evaluated solely on the number of housing units supplied and the project duration. The argument is that it should be assessed based on the social benefits created by public intervention in private development, rather than on "how quickly it was built."
It was also suggested that an exit strategy should be prepared for all public housing from the outset. Tenants of Seoul’s long-term Jeonse Housing 1 (SHIFT), whose 20-year leases are nearing maturity, are in conflict as they demand contract renewals and phased conversion to ownership from the Seoul Metropolitan Government.
The universal public rental housing introduced by the government also allows for a basic residency of 6 years, and up to 20 years depending on factors such as childbirth. The problem lies in what happens after that. While residents may accumulate assets to purchase a home, they may also require continued public support due to old age or unemployment.
Therefore, it is necessary to present pathways from the outset for residents to move to other public rental housing or to become self-reliant in the private market through equity accumulation or public sale schemes, depending on changes in income and assets after moving in.
Conversely, in cases where housing is owned with public support, measures such as actual residence requirements, resale restrictions, and profit sharing must be implemented to prevent the support from leading to short-term capital gains.
Professor Shin emphasized, "We must prevent 'housing support' from degenerating into a 'channel for speculation' by implementing minimum public interest safeguards to ensure that affordable acquisitions do not lead to short-term capital gains."
[email protected] Seo Yoon-kyung Reporter