Deaf to cries for jeonseFall is usually moving season, but moves have become deadlocked due to a scarcity of houses for lease. The ramifications from a string of antimarket rent regulations have been graver than expected. Prices of jeonse — or longer-term rent with lump-sum deposit — have increased for the 64th week in Seoul.
Rent for many apartments across Seoul has increased by more than 100 million won ($85,529) in just a month. For instance, an 84-square-meter unit in Mapo District, western Seoul, was leased for 850 million won, up more than 100 million won in a month. The surge in jeonse prices has spilled over to houses or less expensive multi-family housing. According to a real estate website, a unit in a multi-family buildings measuring less than 30 square meters demanded a jeonse deposit of 162.5 million won on average in August, up 23 million from January.
Even if one can afford higher prices, there are fewer long-term rental offerings. People have to move out of their neighborhoods or give up places they want to live in to search in outer Seoul. But the rent situation is equally bad there and less popular neighborhoods in the capital. Prices of apartments and other multi-family residences have all gone up under the Moon administration despite its 23 sets of real estate measures to control housing prices. A single-room unit in Donbong-gu, a relatively cheap neighborhood, which was leased out for long-term at a deposit of 81 million won in January, now demands 128 million won, a 57 percent increase.
Tenants are scurrying to find cheaper places to live or save more money to meet the higher demand from landlords.
The government stays clueless to the disaster caused by its own policy which blocked sale and supply pipelines through multiple regulations and taxes. Land Minister Kim Hyun-mee defended the government policy of enforcing the extension of lease terms by two more years, saying the jeonse term must change to ensure housing for a minimum of four years instead of two. But due to radical enforcement, tenants are pushed out of their homes and have no place to go.
The so-called Tenant Act mandating a lease for four years and capping annual rent price hikes at 5 percent has actually worsened life for tenants. After landlords withdrew long-term rents because of tougher regulations, jeonse prices went up. Policymakers must stop with policy experiments that only burden the livelihoods of common people.