"Too Small to Live In" One in Five Happy Housing Units Is a 'Vacant House'

Increase in Vacancy Rates of Small Rental Housing Units
Assemblyman Hong Gi-won: "Supply Tailored to Demand"

Perspective view of Happy Housing in Gangseo-gu, Seoul

The number of public rental housing units vacant for more than six months has been increasing every year. In some regions, the vacancy rate of Happy Housing exceeded 20%. This means that one out of every five houses is left empty. There are calls to integrate smaller units to increase exclusive area and to establish supply plans tailored to regional demand.

According to data received by Rep. Hong Gi-won of the Democratic Party from Korea Land and Housing Corporation (LH) on the 29th, the rate of public rental housing units vacant for more than six months was 3.5% as of the end of June this year. The vacancy rate has increased annually from 1.2% in 2018 to 1.6% in 2019, 2.3% in 2020, and 3.1% in 2021.

Among types of public rental housing, the long-term vacancy rate was highest for Happy Housing. Happy Housing is public rental housing supplied by local corporations to stabilize housing for low-income, homeless groups such as university students, newlyweds, and housing benefit recipients.

The vacancy rate, which was 4.4% in 2017, gradually increased to 8.7% in 2021 and 9.1% in June 2022. By region, Chungbuk had the highest vacancy rate at 22.2%, followed by Gyeongnam at 19.9%, Chungnam at 19.0%, and Jeonnam at 12.3%.

The main reasons for the high vacancy rates are ▲small unit sizes and ▲mismatch between supply and demand.

An analysis by the National Assembly Budget Office of the top five construction-type public rental housing complexes with more than 100 units and high long-term vacancy rates in the '2021 Settlement Report' found that units with smaller exclusive areas had higher long-term vacancy rates. In particular, Happy Housing was mostly supplied with small units under 40㎡, resulting in high vacancy rates.

For example, at Yeongam Yongyang 3 (Happy Housing) in Jeonnam, the vacancy rate was only 1.5% for units with an exclusive area of 10 pyeong (36.27㎡), but for smaller units, the vacancy rates were 40.5% for 6.4 pyeong (21.28㎡) and 75.0% for 7.9 pyeong (26.39㎡). Similarly, at Gunsan Shinyeok Station Area A-2BL (National Rental) in Jeonbuk, the long-term vacancy rate was 19.2% for units with an exclusive area of 14 pyeong (46.28㎡), but it was more than double at 46.6% for smaller units of 10 pyeong (33.60㎡).

There are also regions where the vacancy rate is high due to oversupply in areas with low demand. In Chungbuk, most recipients live in long-term public rental housing, so even if existing residents move out, there is almost no waiting demand for new tenants. Gyeongnam and Chungnam also rank high in vacancy rates every year.

If the high vacancy rate continues, financial conditions worsen due to rental income losses and management cost burdens caused by vacancies. In fact, LH's public housing management business financial status last year showed deficits with annual gross sales profit of 1.7792 trillion won, operating profit of 1.9596 trillion won, and net income of 1.8289 trillion won. While the number of managed units increases by an average of 7.3% annually, rental income only grows by 6.2% annually, resulting in an operating deficit averaging 17.1% per year.

Rep. Hong said, "What housing demanders want is not mechanical supply to increase quantity indiscriminately," adding, "It is necessary to analyze the causes of vacancies accurately and supply 'demand-tailored' housing where it is truly needed."

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