[Beginner's Guide to Real Estate] Why Exactly 85㎡? ... The Secret of the 'National Housing Size'

[Asia Economy Reporter Lee Chun-hee] When you become a real estate reporter, friends often suddenly message you on KakaoTalk. "How do I apply for a housing subscription?" "What does first priority mean?" For the 2030 'Burin-i (Real Estate + Beginner)' who only have subscription accounts their parents opened when they were young, I am trying to create a guide.

"All units are composed of the most popular 84㎡ (exclusive area)"

"The apartments being sold this time are all built with units under 84㎡, so there are no medium or large units"

These are phrases you naturally hear when looking at recent apartment sales announcements. Why is 84㎡ the most essential unit size in most apartments? This is because 85㎡ is defined as the 'National Housing Size,' and many standards diverge based on this boundary. The current Housing Act defines houses with a residential exclusive area of 85㎡ or less per household as national housing. However, in non-urban eup and myeon areas, this limit increases to 100㎡ per household.

During the housing construction process, various government benefits are granted only to households below the national housing size, and many aspects of the subscription process are divided based on this 85㎡ standard. For example, special supply for newlyweds and institution recommendations is only available for apartments with an exclusive area of 85㎡ or less. Also, in speculative overheated districts like Seoul, units under 85㎡ are supplied 100% through a point system without any lottery-based allocation. Furthermore, public sale apartments constructed by national or local entities such as the Korea Land and Housing Corporation (LH), Seoul Housing and Communities Corporation (SH), and other local public corporations are all supplied only in units of 85㎡ or less.

This 85㎡ threshold was first established in the 'Housing Construction Promotion Act' enacted in 1972. Although this law was abolished in 2002, the formula '85㎡ = National Housing Size' is still used in various laws. However, there is no clear evidence explaining why exactly '85㎡' was chosen, leaving only several theories.

One theory is that the government considered the average household size at the time to be five people, and since the appropriate living area per person was about '5 pyeong,' they calculated '5 x 5 = 25 pyeong' and set it as 25 pyeong. Since 'pyeong' is not a legal unit, it was converted to the legal unit of square meters. Actually, 25 pyeong is about 82.5㎡, but it was rounded to 85㎡ in this process.

Another theory claims that since a family living in three rooms plus a living room and bathroom would total about 85㎡, this was used as the national housing size standard. A simpler theory suggests that the reason was that President Park Chung-hee’s residence in Sindang-dong was 85㎡, so this became the standard.

The existence of these various claims may indicate that the exact basis for the standard is unknown. However, this 'National Housing Size' has been the fundamental framework of the real estate market for over 40 years. Therefore, there have been several calls to change it.

Some argue that this size should be reduced. In 2012, Seoul City proposed reducing the national housing size to 65㎡ through the 'Measures for Stabilizing Housing for the Working Class.' This was because demand for smaller homes increased due to the rise of 1-2 person households. In fact, the average household size decreased from 5.69 persons in the 1970s to 2.69 persons in 2010. As of the end of last month, this number further decreased to 2.29 persons.

At that time, Seoul City argued that the number of 4-person households had significantly decreased, the proportion of 1-2 person households had increased, and building smaller homes on limited land would increase housing supply and lower prices. However, the Ministry of Land, Infrastructure and Transport (then Ministry of Land, Transport and Maritime Affairs) opposed this, fearing that housing supply through reconstruction projects would shrink.

There is also an opposite argument. Since the national housing size is not a minimum housing standard but a basis for various benefits, it should be increased to reflect changes in the times. Given the improved economic level, the national housing size should be raised to 100㎡, the current standard for eup and myeon areas.