Last Year's 100 Million Won Cayenne Parked Right in the Parking Lot... The Chaos of Rental Housing

National Assembly Land, Infrastructure and Transport Committee Audit Puts 'Rental Housing' Under Scrutiny
Strict Criteria Cause Tears for Young Adults Who Actually Fail
Incidents of Assault and Verbal Abuse in Rental Housing Also on the Rise

H rental housing complex located in Haeundae-gu, Busan. Although the basic rent is around 400,000 KRW per month, a 2021 model 'Porsche Cayenne Coupe' (vehicle value approximately 91 million KRW) comes and goes in the parking lot here. In the S rental housing complex in Giheung-gu, Yongin, where the rent is about 350,000 KRW, a foreign car worth over 100 million KRW (Mercedes-AMG S63 4Matic+L) is openly registered.

A office worker, Mr. A, who commutes from Bucheon, Gyeonggi-do to Magok, Gangseo-gu, Seoul, recently pinned his hopes on the recruitment for Bucheon Happy Housing residents. The rent was much cheaper than the surrounding market price, and there were no strict screening criteria such as income, so the chances of winning seemed higher than ever. However, the complex recorded a competition rate of hundreds to one, and Mr. A's name was not on the winner list.

The government’s public rental housing, supplied as part of residential welfare for low-income people, has been found to be filled with high-priced vehicles exceeding the resident eligibility value, such as luxury foreign cars. Recently, incidents and accidents such as verbal abuse and assault within rental housing have surged, causing ongoing controversies surrounding rental housing. At the National Assembly’s Land, Infrastructure and Transport Committee’s audit held on the 4th, there were continuous denunciations exposing this 'rental housing chaos.'

◆Porsche, Ferrari, Maserati Lined Up in Rental Housing Parking Lots

Public rental housing is supplied at prices lower than market rates, so strict screening criteria are applied. However, according to the 'Status of Assets Exceeding Public Rental Housing Standard Value' data submitted by LH and the Housing Management Corporation to Jang Cheol-min, a member of the Democratic Party, there are 264 households owning high-priced foreign cars exceeding resident eligibility standards. Some of these even had cases of rent arrears.

The selection criteria for public rental housing residents are △households without home ownership △total assets of 242 million KRW (permanent), 325 million KRW (national) △vehicle value must be 35.57 million KRW or less. However, among 609,379 households in 817 public rental housing complexes submitted by LH, 71,233 households (11.7%) owned two or more vehicles, and 264 households (0.04%) owned high-priced vehicles exceeding the eligibility criteria.

There were 143 households owning high-priced domestic cars such as Genesis EQ900, as well as foreign cars like Porsche, Ferrari, Maserati, Tesla, and Audi. By model, BMW and Mercedes-Benz each accounted for the highest number with 48 vehicles. Despite owning high-priced vehicles, cases of rent arrears were often detected. One household owning a luxury foreign car had delayed rent payments for 22 months.

Assemblyman Jang said, "Although public rental housing is prepared as part of residential welfare for low-income people, residents owning luxury vehicles have been found," adding, "Some institutional improvements are needed, such as disallowing contract renewal for those exceeding the eligibility value."

◆Frequent Verbal Abuse and Assault Incidents in Rental Housing... Chronic Supply Shortage in Seoul

The controversies surrounding rental housing do not end there. Recently, the number of incidents and accidents has been increasing.

According to data submitted by LH to Min Hong-chul, a Democratic Party member, the number of incidents such as assault, verbal abuse, and swearing between residents and between residents and complex workers was only 310 in 2020, but increased to 501 last year. This year, in just eight months, 509 incidents have already been recorded, surpassing last year's total.

In addition to poor management, the shortage of rental housing supply has also come under scrutiny. Park Sang-hyuk, a Democratic Party member, said, "The Yoon Seok-yeol government announced in its 110 national tasks that it would supply 100,000 public rental houses annually," adding, "This is 30,000 fewer than the 130,000 units in the Moon Jae-in administration’s housing welfare roadmap." He continued, "The budget was also cut by 5.7 trillion KRW (25.1%). Reducing the quantity at a time when the expansion of public rental housing is necessary is abandoning LH’s role in stabilizing low-income housing."

Furthermore, among areas where LH supplies construction rental housing, Seoul, known as the region with the highest housing costs, has the lowest ratio of managed units per population. According to data received by Kim Byung-wook, also from the same party, the ratio of managed units per population for LH-supplied construction rental housing in Seoul is only 0.3%. The highest ratio is in Sejong (3.1%, 11,686 units), followed by Chungbuk (2.9%, 46,157 units).

Lee Jung-kwan, Acting President of Korea Land and Housing Corporation, is delivering an opening statement at the National Assembly audit on Korea Land and Housing Corporation held on the 4th. Photo by Yoon Dong-joo doso7@

◆Ministry of Land and LH: "Strengthening Contract Renewal Criteria and Improving Management While Expanding Supply"

LH and the Ministry of Land, Infrastructure and Transport explained that they will improve the operation and management level of rental housing and continue to increase supply. LH stated, "We are conducting campaigns to establish a culture of mutual respect and community life between residents and workers, and will continue to actively cooperate with related organizations to prevent incidents and accidents."

Regarding the luxury vehicle issue, they said, "We have strengthened contract renewal and registration criteria for owners of luxury vehicles, and the number of vehicles exceeding the vehicle value standard is decreasing due to raising the vehicle value threshold," adding, "In the future, we will strictly enforce contract renewal refusals and parking registration restrictions for owners of luxury vehicles."

The Ministry of Land said, "The government plans to shift the public housing policy focus from solely public rental housing to supplying both public rental and public sale housing, thereby expanding the overall public housing supply compared to previous administrations," adding, "Considering the demand for home ownership among youth and households without homes, we will expand public sale housing supply and ensure sufficient supply of public rental housing for vulnerable groups, not less than previous governments."

Lee Jung-kwan, acting president of LH, acknowledged the insufficient supply of rental housing in Seoul and said, "LH will establish special measures to directly address rental housing issues in Seoul and urban areas."