Driving a Luxury Car While Living in Public Housing?… Not Allowed in Korea, but a Surprising Twist in Japan

Photo unrelated to the article. Pixabay

원본보기 아이콘

Have you ever seen luxury cars worth tens of millions of won parked in the lots of city-run housing, which is primarily provided for low-income residents? In Japan, there have even been cases where new models like the Toyota Alphard, estimated to cost over 6 million yen (approximately 56.6 million won), are found parked at public housing complexes. This has led to questions such as, "Should people who can afford such cars be allowed to continue living there?"

On August 14 (local time), Japanese financial media outlet Financial Field reported on this controversy, stating, "To get straight to the point, eligibility for public housing is based primarily on 'income criteria,' and there are few restrictions regarding car ownership or vehicle type."

According to the outlet, public housing in Japan is a form of public rental housing jointly funded by the national and local governments, targeting low-income individuals struggling with housing. Article 1 of Japan's Public Housing Act states that its purpose is "to provide housing for people with low incomes." In Tokyo, applicants are eligible if their annual income is 1,896,000 yen (about 18 million won) or less, or if their monthly income is 158,000 yen (about 1.5 million won) or less. This income is calculated as the household's total annual income minus various deductions. The criteria may vary depending on the number of dependents. Those who own their own homes are not eligible to apply.

Vehicle ownership is not included as an eligibility criterion. For example, the public housing guide for Yokohama, Kanagawa Prefecture, specifies that each household can apply for one parking space. There are no restrictions on vehicle type, so luxury cars are not excluded. Therefore, even if someone drives a luxury car worth 60 million yen (about 56.6 million won), as long as their income is below the threshold, they are eligible to move in. While a resident may have met the income criteria at the time of move-in, their income could increase during their residency. According to Article 29 of the Public Housing Act, if a resident has lived for more than five years and their income has exceeded the criteria for two consecutive years, they may be classified as a "high-income earner" and be asked to vacate the premises.

In Tokyo, the high-income threshold is set at 313,000 yen per month (about 3 million won). However, even if a resident is asked to leave, they are not evicted immediately; typically, a six-month grace period is granted. The outlet explained, "Eligibility for public housing is determined by income, not by vehicle ownership," and added, "Owning a luxury car does not necessarily mean someone is a high-income earner, and as long as the criteria are met, residency is legally permitted."

In Korea as well, there has been controversy over residents of rental apartments for low-income individuals driving luxury imported vehicles. According to data submitted by Kim Hee-jung, a member of the National Assembly's Land, Infrastructure and Transport Committee from the People Power Party, to Korea Land and Housing Corporation (LH) last year, 311 residents of LH rental housing at the time owned vehicles exceeding the eligibility criteria for move-in or renewal. Of these, 135 owned imported cars. By brand, BMW was the most common with 50 vehicles, followed by Mercedes-Benz with 38, Tesla with 9, Audi with 9, and Porsche with 5.

One resident of a public rental apartment in Cheongwon District, Cheongju, North Chungcheong Province, owned a 2023 Porsche Cayenne Turbo valued at 180 million won (based on assessed value), while another resident in Osan-myeon, Iksan, North Jeolla Province, owned a 2022 Porsche Cayenne worth over 100 million won. Among high-priced domestic cars, the Genesis model was the most common, with 78 vehicles.

A public rental apartment parking lot view. Unrelated to the article content.

원본보기 아이콘

LH stipulates that, in addition to income, the total value of all vehicles owned by a household must not exceed 37.08 million won (as of 2024) to qualify for rental apartments. In response to social controversy over luxury cars owned by rental apartment residents, LH revised its policy in January last year: for residents who moved in before January 5, 2023, one renewal is allowed even if the vehicle value exceeds the limit, but for those who moved in after that date, renewal can be denied. Under this system, 271 current residents with high-value vehicles moved in before January 5, so they can renew their leases even if they own expensive cars. Of these 271 residents, 76 can remain until as late as 2028.

LH stated, "We regularly conduct comprehensive inspections of registered vehicles to restrict the ownership and parking of high-value cars by residents," adding, "We will strictly manage the ownership of expensive vehicles in rental housing through policy improvements, renewal denials, and parking registration restrictions."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.