[VIEWPOINT]Leave housing to the private market

“I’d like to build a pretty house on a green field to live with my lover for a hundred years.”
Just like the song says, most people desire to have a home of their own. Yet the government has launched an ambitious plan to change people’s root desires. In short, the government plans to change the perception of housing from that of a possession to a place for living.
For this, the government plans to invest some 88 trillion won ($91 billion) by 2012 to build rental homes, make middle-class people live in rental homes, and increase the supply of medium- and large-size housing units that have more than 85 square meters of floor space.
Furthermore, the government announced that it will upgrade the interiors of rental homes to show that rental housing is not only for low-income families.
The focus of the government’s housing policy seems to be to make it possible for as many people as possible to live in rental homes. It is good that people can live in a house even if they don’t own one.
However, the idea that the government can solve the housing problem by building large-scale rental housing estates is out of place.
Since large-scale rental housing estates are difficult to manage, are shunned by people in low-income brackets and tend to become slums, advanced countries have changed their housing policies from the welfare concept to providing direct financial support of housing costs.
In advanced countries, the governments have started to reduce the supply of public rental homes.
The British government sold a large number of public housing units managed by the central or local governments to the private sector. Except for the need to provide housing for certain low-income households, the British government intends to entrust the supply of rental units to the private market and have the government pay housing costs directly to needy people instead. The U.S. government’s housing policy also emphasizes increasing the rate of home ownership and providing housing finance to low-income brackets.
At the moment, the rate of public rental housing in Korea is lower than other advanced countries, at less than 10 percent of all of the housing units.
Therefore, the construction of new public rental homes should be continuously promoted. But the supply of rental housing units should be limited to people with low incomes who cannot afford to buy a home of their own.
It is especially worrisome that the government harms long-preserved green areas around big cities to develop housing sites, while clinging to the target of building 1.16 million public rental homes.
The idea of building rental homes for low-income families in greenbelt areas on the outskirts of cities will not only be harmful to those areas, but also threaten the people’s daily lives.
Low-income workers want to live close to their workplaces. Many of the victims of a recent fire at a building that housed many one-room rentals were daily workers who wanted to live close to their work places.
Because the government builds rental housing units where there is no demand, the completed rental homes are left unoccupied and the government is forced to loosen the income limits for the people eligible to live there.
Except for a minimum number of public rental homes, the most efficicent way to meet the demands for housing is to leave the supply to the market.
The biggest obstacle to activating the private rental market at the moment is the punitive regulations against the owners of multiple homes. The regulation originates from the government’s view that multiple-home owners are real estate speculators.
However, it is much more effective and desirable that the supply of rental homes is provided by the private sector, using private investments, rather than the government investing huge amounts of tax payer money.
This has already been proven historically and by the precedents of other countries.
The government should make our society free from real estate speculation by facilitating the supply of homes. Also, the government should establish a suitable housing policy by figuring out what people really want.
Providing rental homes to those who want to be home owners and demanding that they change their way of thinking sounds like the government intends to control even the desires of individual citizens.
Instead of putting all its energy on building rental homes, sticking to the illusion of building “a society without the worries of housing,” we have to increase the rate of home-ownership and vitalize the private rental market.
And promoting various policies, including housing finance to needy people, in harmony with the above policies is a more balanced housing policy.

* The writer is an editorial writer of the JoongAng Ilbo.

by Shin Hye-kyung