[Editorial] Can the desire for homeownership be satisfied with "good rentals"?

The government has unveiled a new rental housing supply plan aimed at building homes for those who wish to live in desirable locations. While the intention to broaden choices is commendable, public housing alone cannot meet diverse housing demands. To restore the broken housing ladder, efforts must begin with stabilizing the rental market, where supply has dwindled and prices have surged.

The "Universal Public Rental" component of the "Housing Stability Plan," announced by the Ministry of Land, Infrastructure and Transport on the 21st, includes a target of 190,000 units. This plan considers diverse housing needs. While existing integrated public rentals were designed with a focus on supporting vulnerable groups, the newly introduced "universal" type aims to provide homes of various sizes in preferred locations such as transit-oriented developments and city centers, as well as newly developed residential areas. For example, 55–85 square meters will be supplied in new residential zones, 40–60 square meters in urban areas, and at least 30 square meters for single-person youth households.

The government previously announced its plan to build universal public rental housing through the the 13th housing supply and rental market measures, as well as next year's budget proposal. This was accompanied by a funding strategy utilizing the youth-related account within the Future Response Fund, which is based on excess tax revenues from semiconductor companies. However, given the unpredictability of the semiconductor market, it cannot be assumed that funding will be consistently secured. In fact, the relevant budget has been allocated only through next year at a scale of 30 trillion to 34 trillion won, making its predictability lower compared to the plan to operate for over 20 years.

While supply measures are emphasized, the government ignores policies to revitalize private redevelopment and reconstruction projects, insisting instead on increasing public and rental housing. However, disagreements with Seoul Metropolitan Government and other local authorities, along with difficulties in securing cooperation from nearby residents, make supply prospects unclear. Overly strict loan regulations combined with proposed tax reforms targeting non-resident single-home owners have led to a transaction cliff and sharp increases in rental prices. Amid this situation, apartment prices in Seoul have continued to rise since the first week of February last year, approaching the previous longest consecutive increase period of 85 weeks. Although there was hope that real estate measures would be announced following President Lee Jae-myung's press conference, discussions were sidestepped after questioning the validity of questions related to jeonse (deposit-based rentals).

Rather than insisting that rental housing offers a wide range of choices, efforts must focus on maximizing private sector supply capacity to stabilize the rental market first. Regulatory easing for redevelopment and reconstruction projects, simplification of permitting procedures, and improvements in project viability should be implemented to encourage private companies to participate.