Long-term fix for housingRent prices in and around the nation’s capital are skyrocketing, raising concerns that a catastrophic housing crisis is on the horizon for people who can’t afford to buy property.
Rental properties are scarce not only in southern Seoul, but also in the northern part of the city. In some places, locals need to put down deposits of 100 million won ($88,132) to secure an apartment or house.
Renters have it tough these days, and they’ve been suffering for more than three years now.
Last year, rents rose 7.1 percent on average nationwide. The reality, however, is much worse than the official figures lead you to believe. In some areas, for instance, rent prices have gone up 20 percent to 30 percent.
Since his inauguration, President Lee Myung-bak vowed to improve housing conditions for the working class. The government promised to supply housing in greenbelt areas, where renters can find places for much cheaper than in the city.
Seoul is working to ease the burden on renters as well, pushing plans to subsidize some types of housing and cut rents significantly.
If you listened to the government as they detailed these plans, you’d think that few people would have to worry about having a roof over their heads.
Now, officials must scramble to explain why rental properties are scarce and rents are rising.
Industry experts say that prices have soared because people prefer to rent rather than buy amid uncertainty in the housing market.
If rent prices continue to climb, it will exacerbate problems in the real estate market.
Stabilizing rental prices, on the other hand, would help strengthen the overall market.
But the government remains clueless when it comes to this issue. It reportedly plans to respond to the rental market crisis with stopgap measures, such as providing immediate housing as the need arises and promising to offer apartments and homes at lower rental rates.
But these moves amount to a quick fix for deep-rooted problems. The government should come up with a longer-term housing supply outline and solutions. It should consider reinforcing subsidized rental units and pursuing other housing projects. Officials must revisit the idea of restarting stalled housing projects in the satellite cities of Seoul.
Without far-sighted and fundamental measures, people who don’t own homes should brace themselves for the painful process of finding an affordable place to live every year.