[Viewpoint] Emergency Disaster Relief Funds Should Be Used to Prevent a Tsunami of Rent Arrears

Sangwoo Park, Distinguished Professor, Graduate School of Engineering, Korea University

The novel coronavirus disease (COVID-19) pandemic, which brought the entire world to a halt, seems to be gradually entering a phase of stabilization. Although it will still take a long time for complete eradication worldwide, citizens weary of 'social distancing' and 'lockdowns' will likely try to return to their daily lives in the near future. Governments around the world are supplying emergency disaster relief funds, commonly called 'helicopter money,' almost without limit to overcome the economic difficulties caused by COVID-19. Given the urgency of the situation, this government concern is fully understandable. The calculation is that if money is distributed like drops from a helicopter, the droplets will splash here and there, eventually extinguishing the fire. In any case, the fire will be put out.

However, even if the urgent fire is extinguished this way, the impact of the COVID-19 crisis will last for a long time. In particular, there seems to be no dispute over the forecast that the trend toward a 'Untact Society' will deepen and 'Untact Services' will increase significantly. The problem is that the COVID-19 shock will not only cause short-term business downturns and job losses but will also bring about long-term and continuous remodeling of the economic structure, resulting in a surge of victims. Basic untact services, such as bank ATMs and kiosk ticketing, are already familiar experiences. The e-commerce and delivery service markets will expand further, and smart orders such as cyber lectures and drive-thru services will also increase. These changes will inevitably reduce traditional jobs like retail salespeople and deal a huge blow to small self-employed businesses that employ them. Consequently, in the real estate sector, there is a high likelihood of an increase in vacant stores in neighborhood commercial districts and rent arrears for houses and commercial buildings. If rent arrears persist long-term, landlords will also suffer considerable damage, such as difficulties in repaying loans. In this way, the crisis of socially vulnerable groups will not remain their own problem but, like a virus spreading at a terrifying speed, can propagate through the economic neural network to every corner of the economy and industrial ecosystem.

The first priority in post-COVID-19 measures should be to prevent a tsunami of rent arrears for stores and houses, which is expected to start among small business owners and low-income citizens. Even if ordinary people face crises due to the COVID-19 situation, if they are not evicted from the stores they rent or the homes they live in, their basic living spaces will be protected. Under such a foundation, if the economic situation improves, they will be given time to recover or restructure.

The problem ultimately lies in the money to protect them. I propose utilizing the money to be distributed as emergency disaster relief funds. As someone whose main income sources are salary and pension, I have not yet suffered direct economic damage from this crisis. Nevertheless, Gyeonggi Province, which acted swiftly, has already given my spouse and me 100,000 won each, totaling 200,000 won. If the ruling party’s election pledge is fulfilled, we will likely receive an additional 2 million won. Instead of spending the support funds given to people in situations similar to mine, let’s convert them into a social fund system to lend interest-free or provide free support to those who inevitably face rent arrears due to the economic crisis. Even those who do not receive government support will gladly participate and find it rewarding if their shares go to citizens in more difficult circumstances and help protect the foundation of our economy. However, careful consideration should be given so that those who do not receive support can feel pride in having 'sacrificed their share.'

Sangwoo Park, Distinguished Professor, Graduate School of Engineering, Korea University

This content was produced with the assistance of AI translation services.