After the 'Silvertown Failure,' Both Operators and Seniors Turned Away [Senior House]

[4] Monthly Rent 50,000 Won vs Deposit Only 2 Billion Won, The Reason Is

Perception Worsened After Silver Town Failure in 2000
Ultra-Luxury Facilities and Public Housing Divided into Extremes
Private Operators Gave Up After Only Reviewing Due to Lack of Support Measures

▲On the 26th of last month, elderly people are resting under the shade of trees in a park in Gwangjin-gu, Seoul. Photo by Jo Yongjun jun21@

There was a time when 'Silver Towns' attracted attention in South Korea as well. Riding on the desire that "when you get old, you should live in a place with good water and clean air," countryside-style Silver Towns sprang up like mushrooms from the late 1990s to the early 2000s. However, the trend did not last long. Above all, hospitals were far away, and transportation was inconvenient. For the elderly, countryside-style Silver Towns were 'beautiful prisons.'

At that time, construction companies were also part of the problem. The core of Silver Towns in the eyes of construction companies was not operation but sales. They were busy building, selling, and running away after making a profit, neglecting operations. Many cases of damage to Silver Town residents who had purchased units for hundreds of millions of won but faced poor management and even legal disputes flooded the media, with some saying they "lost their entire fortune." An operator who worked in elderly housing for 16 years said, "Since then, the government's interest in privately built elderly housing has waned, and the elderly have turned their backs as well."

After the Failure of Silver Towns, Interest Disappeared

The wounds inflicted by Silver Towns did not heal easily. After the failure of Silver Towns, elderly housing in South Korea split into extremes. On one end were facilities offering ultra-luxury services with deposits exceeding 2 billion won, and on the other were public housing units costing 50,000 won per month for those who could not live alone. Although the entry into a super-aged society is imminent, the elderly housing market has not even laid the groundwork for popularization, splitting into extremes based on 'demand' and 'need.'

One reason for this distorted structure in the elderly housing market is the lack of awareness about aging issues. Aging has only recently emerged as a significant social problem. According to Statistics Korea's future population projections, the population aged 65 and over was 8.15 million in 2020. However, 20 years later, it will more than double to 17.24 million (2040). By 2050, it will increase to 18.91 million. As the first baby boomers become grandparents, the elderly population begins to increase explosively. In other words, before 2020, even if aging was anticipated, there was no social consensus to respond to it.

Yoo Ae-jung, head of the Integrated Care Research Center at the National Health Insurance Service, explained, "Before Japan entered aging, like South Korea, there were only housing options for high-income groups and public housing for low-income groups," adding, "In 2010, as the aging rate suddenly increased, housing types for middle-class elderly began to develop." She continued, "South Korea is now following that process."

The Elderly Welfare Act Still Reflects the 1970s Legislative Background

Government interest in elderly housing was also lacking. Officially called 'Elderly Welfare Housing,' also known as Senior Towns, the legal basis for elderly welfare housing in South Korea is the 'Elderly Welfare Act.' Kim Jeong-ha, a professor of Real Estate Law at Kwangwoon University, said, "The Elderly Welfare Act, which underpins elderly welfare housing in South Korea, still reflects the social context of the 1970s," and evaluated it as "a basic law aimed at low-income elderly such as those without family support rather than universal elderly." As a result, elderly welfare housing received no government support and had to be supplied by the private sector at their own expense, making it difficult for various forms to emerge.

On the 3rd of last month, residents at Spring County Xi, a senior welfare housing complex in Yongin City, are playing board games. Photo by Jinhyung Kang aymsdream@

The structure also made it difficult for businesses to jump in easily. Building is not the problem. The challenge lies in taking responsibility for and providing services for the elderly after construction. An industry insider in elderly welfare housing explained, "Unlike general apartments where developers just build and sell, elderly welfare housing is a rental business, so the real work begins once residents move in." He added, "The term 'welfare' in elderly welfare housing means providing appropriate meals, health, and leisure services to residents, but many businesses give up after only reviewing whether they can sustain the business or make a profit."

The elderly themselves are often unaware of the existence of elderly welfare housing. According to the 'Elderly Survey Report' (based on 2020) released by the Ministry of Health and Welfare two years ago, about 7 out of 10 elderly respondents said they did not know about it. Given this situation, while the number of late-stage elderly needing care is rapidly increasing, the number of elderly welfare housing units has remained similar: 35 in 2018, 36 in 2020, and 39 in 2022.