[Reporter’s Notebook] The Onslaught of 'Jeonse Phobia'... There Were Signals Five Years Ago Too

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"I’m about to lose my 120 million won jeonse deposit." This urgent call from a high school friend came five years ago. She was twenty-four and had come to Seoul, living more diligently than anyone else. When she realized she was about to lose the savings she and her husband had carefully accumulated, she was pregnant with their second child.

At that time, the jeonse fraud that occurred in Dangsan-dong, Yeongdeungpo-gu, Seoul, involved damages amounting to 10 billion won and 142 victims, with my friend being one of them. The landlord, who had recklessly engaged in gap investment and rental business, hid the deposits and obtained loans from secondary financial institutions using fake lease contracts. The entire villa went up for auction, and the landlord was already in prison. Although the victims pleaded their desperate situations, both the government and financial institutions dismissed it as a 'personal issue' and showed indifference. The victims prepared lawsuits for over two years but eventually gave up due to economic pressure.

Now, jeonse fraud has become a 'social disaster' occurring everywhere. The number of victims is countless. Looking at recent jeonse fraud cases in Incheon, Dongtan, and Guri, they closely resemble those from five years ago. Weak tenant protection systems, lax government supervision, colluding real estate agents, and irresponsible loans from financial companies.

The rotten parts of the jeonse system, which had been pointed out multiple times, were hidden during the real estate boom. As both housing prices and jeonse prices rose, even 'kan-tong villas' (properties with loan amounts exceeding their market value) could manage 'tenant rollover.' But when the recession hit, the festering problems burst out. If the signals from five years ago had been properly read and countermeasures implemented, the current disaster could have been avoided.

As the situation worsened, emergency housing support and low-interest jeonse loans were hastily introduced, but these were mere stopgap measures. Only after three victims lost their precious lives did substantial measures such as granting preemptive purchase rights and public rental housing through LH acquisitions emerge. However, gaps remain. The budget for purchase rental housing was cut by more than 3 trillion won compared to last year, even though the number of purchase targets increased. The government said it would use this budget to buy semi-basement units damaged by summer floods. There are concerns that vulnerable housing groups may suffer further harm.

Jeonse fraud is a social disaster that occurred amid comprehensive negligence. If not careful, jeonse phobia could even engulf the real economy. The ruling party blames the previous administration, but to the victims, it is the same government. The government must take responsibility for ignoring the signals five years ago and present thorough solutions and preventive measures.

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