[Exclusive] "University Areas Must Thrive to Access Job Information"... Youth Rental Housing Detached from 'Work'

LH Secures Housing Cheaper Than Market Price
Zero Supply in 5 Seoul Districts and 16 Gyeonggi Areas
914 Applicants for 3 Houses in Seocho-gu
Housing and Employment Insecurity Pose Challenges
Private Sector Regulations Must Be Eased to Meet Demand

On the 7th, in front of a university in Heukseok-dong, Dongjak-gu, Seoul, flyers advertising one-room and boarding rooms are densely posted ahead of the new semester. Photo by Moon Honam munonam@

[Asia Economy Reporters Jang Sehee and Moon Chaeseok] The supply volume of youth rental housing promoted as a policy project shows significant regional disparities because market prices are higher than the housing purchase prices. Since efforts are made to secure housing priced lower than the market, supply inevitably concentrates in certain areas. However, considering that youth housing stability also affects employment and that housing prices are soaring, there are calls for fundamental measures.

◆Widening disparities in youth rental housing supply in the Seoul metropolitan area including Seoul and Gyeonggi= According to the Korea Land and Housing Corporation (LH)’s ‘2020 Youth Purchase Rental Housing Supply Details by Region in the Seoul Metropolitan Area,’ no units were supplied in five districts in Seoul including Gangnam, and in 16 areas in Gyeonggi including Goyang. The situation was the same in Incheon’s Gyeyang and Jung districts. Looking at the competition rates for youth rental housing projects, it can be confirmed that regional demand differs from supply. In Seoul, Jungnang-gu, which supplied the most units, had a competition rate of 12.3 to 1, whereas Seocho-gu, which supplied three houses, received applications from 914 people, recording a competition rate of 304.7 to 1. Seongbuk and Gangdong districts, which have good accessibility to downtown and Gangnam, also showed competition rates exceeding 100 to 1. This suggests that supply locations considered market prices rather than demand. Youth tend to link housing issues with employment. They prefer to live in areas where there are many jobs or related information. Kim (26), a student at Chung-Ang University, said, “I need to be near the school to at least get employment information,” and added, “It’s a big burden to move away from Dongjak-gu near the school when I haven’t found a job yet.” Lee (32), living in Gyeonggi, said, “Even if I want to apply for youth rental housing, there is no supply, so I feel I don’t even have a chance,” and “I’m considering whether to move my job to Seoul.” Given the challenging employment situation, this perception is likely to be stronger. An analysis of ‘2020 Resume Registrations and Company Job Postings’ data obtained from Saramin by Asia Economy showed that last year job postings decreased by an average of 13%, while resume registrations increased by 13.2%. As private companies reduce hiring, the employment difficulties for youth entering the labor market are intensifying.

◆Limitations of youth rental housing supply due to ‘limited resources’= Experts agree that a certain amount of rental housing should be provided where there is demand. Professor Lee In-ho of Seoul National University’s Department of Economics said, “A prominent phenomenon in housing policy is that what the market wants is not provided, and houses are repeatedly built where supply is possible,” adding, “Ultimately, prices rose because there is demand.” He said, “Supplying rental housing with limited resources will inevitably have limits,” and “The right direction is to ease private regulations to promote youth housing stability.” Professor Choi Young-ki of Hallym University’s Department of Business Administration advised, “It is necessary to develop many one-room units in central Seoul where youth can move in at relatively affordable prices,” and “Youth face serious job and housing insecurity due to COVID-19,” emphasizing “Efforts to bring workplaces and housing facilities closer are needed.” To supply rental housing of appropriate scale in desired areas, it is also necessary to diversify supply types. Professor Shim Kyo-eon of Konkuk University’s Department of Real Estate explained, “The government cannot purchase all purchase rental housing in every district, and price ranges should be formed according to targets by district,” adding, “It is natural that the number of units supplied is relatively small in Gangnam and Seocho and larger in other districts.”

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