[Report on 130,000 Vacant Homes] ⑤ Urban and Rural Areas Managed Separately ... Urgent Need for Government Control Tower

Vacant Home Management Left to Local Governments
Clear Gap in Results Depending on Fiscal Independence
Government Forms Pan-Governmental Task Force
But Efficiency Remains Low Due to Fragmented Oversight by Ministries

Editor's Note'17,603 households.' This is the number of vacant homes in Seoul, Gyeonggi, and Incheon where no one lives. When expanded nationwide, the number rises to 134,009 households. Despite the perception that there is a shortage of housing supply in urban areas, the number of vacant homes in cities continues to increase. Urban vacant homes quickly turn into abandoned houses. While the structure remains, they become zombie houses that are uninhabitable. In particular, once these vacant homes appear, they tend to spread like an epidemic. The proliferation of vacant homes leads to the formation of crime-prone areas and sets the stage for neighborhoods to become ghost towns. Asia Economy intends to shed light on the issue of vacant homes spreading throughout cities and, over the course of five articles, propose prevention and management measures.

More than 130,000 vacant homes are left unattended across the country, yet there is no central control tower to oversee them. So-called 'piecemeal responses' are the reality of South Korea's vacant home policies. Because the management of vacant homes is left to local governments, the effectiveness of countermeasures varies greatly depending on their financial circumstances.

The government belatedly launched an inter-agency task force and announced a comprehensive plan, but the system in which different ministries oversee urban and rural areas separately remains unchanged. Budgets are scattered, and policies rarely move in a unified direction. There is growing criticism that a national-level control tower and consistent budget support are urgently needed.

A three-story row house that has been abandoned for several years is surrounded by barbed wire in the Michuhol District of Incheon. Photo by Yoon Dongju

According to industry sources on May 27, under current law, vacant homes are managed separately as urban and rural vacant homes under the 'Vacant Home and Small-Scale Housing Maintenance Act' and the 'Rural and Fishing Village Maintenance Act,' respectively.

The main actors in response are the heads of each city, county, and district office. Local government heads are required to conduct a status survey every five years, and rural areas must establish response plans every year. The Ministry of Land, Infrastructure and Transport, the Ministry of Agriculture, Food and Rural Affairs, and the Ministry of Oceans and Fisheries are each responsible for vacant homes in urban, rural, and fishing village areas, respectively. However, their roles are largely limited to supporting vacant home maintenance as part of broader spatial or district regeneration projects.

Because the overall response, such as preventing or demolishing vacant homes, has devolved into a local government responsibility, outcomes differ dramatically depending on financial independence. According to Representative Hwang Unha of the Innovation Party for the Fatherland, there have been 2,865 vacant home maintenance projects carried out in non-capital regions over the past five years. On an annual basis, this is 573 projects per year, which is far from sufficient considering there are 134,009 vacant homes nationwide.

Rural Local Governments Struggle to Secure Budgets Due to Low Fiscal Independence

Yeoncheon County in Gyeonggi Province barely managed to secure 170 million won for vacant home maintenance this year. This is a significant decrease from last year’s 238 million won. Yeoncheon County splits the vacant home budget equally with Gyeonggi Province. However, provincial support dropped from 89 million won last year to 50 million won this year, resulting in a reduced total budget. As a result, the county was forced to make a supplementary budget adjustment.

Despite these efforts, the secured budget falls far short of covering the cost of demolishing vacant homes. It is estimated that a total of about 1.89 billion won is needed to demolish all vacant homes in Yeoncheon County, including incidental expenses.

According to the county’s vacant home maintenance plan announced last year, there are currently 61 specific vacant homes in the county that require demolition. Yeoncheon County has planned to spend a total of 610 million won on maintenance by 2028. This budget is solely for demolition. The county allocated 10 million won per household. However, a county official explained, "Waste disposal costs up to 20 million won per household," and "In addition, about 1 million won per household is spent on design costs when demolishing a vacant home."

Even in the capital region, where financial conditions are better, the situation is similar. In the case of Seoul, support for vacant home demolition was cut off after 265 million won in 2021. This year, the total budget allocated for vacant homes, excluding demolition, is 1.849 billion won, a 75.8% decrease from 7.654 billion won in 2021.

In 2019, the city allocated about 244 billion won to Seoul Housing & Communities Corporation (SH Corporation) for the purchase of vacant home lots, but it has been confirmed that there are no plans for additional investment. SH has currently executed 89.6% of this budget, and the remaining budget (about 25.399 billion won) combined with revenue from the sale of vacant homes (about 6.169 billion won) leaves only about 31.567 billion won available.

Differences in Budget Allocations by Ministry Make Accurate Budget Assessment Difficult

As the limitations of local government-led efforts became apparent, the government last year established a 'Joint Vacant Home Maintenance Task Force' involving four ministries. On May 1, a national-level vacant home management plan was also announced. The Ministry of Agriculture, Food and Rural Affairs, the Ministry of Oceans and Fisheries, and the Ministry of Land, Infrastructure and Transport are each pursuing the enactment of special laws to strengthen the management responsibilities of the state and property owners for rural and urban vacant homes, respectively.

However, there are concerns that as long as responsibility for rural and urban areas is divided among different ministries, the effectiveness of any measures will remain limited. Currently, three ministries separately oversee vacant homes in rural, fishing, and urban areas, resulting in scattered budgets and widely varying allocations.

This year, the Ministry of Agriculture, Food and Rural Affairs allocated 1.539 billion won to support the activation of the rural vacant home bank and vacant home regeneration projects in response to depopulation. In addition, some of the 18.3 billion won budgeted for the improvement of living conditions in vulnerable areas is being spent on vacant home maintenance.

The Ministry of Land, Infrastructure and Transport did not allocate a budget specifically for vacant homes. However, vacant homes are being maintained as part of broader urban maintenance projects such as the Saetteul Village Project and the Urban Regeneration New Deal Project, making it difficult to determine the exact amount spent on vacant homes.

The Ministry of the Interior and Safety allocated 10 billion won for vacant home demolition, and the Ministry of Oceans and Fisheries decided to invest 500 million won from the Rural-Fishing Village Cooperation Fund in vacant home utilization projects. In total, four agencies, including the Ministry of the Interior and Safety, are supporting vacant home maintenance and demolition under different project names.

Japan: Government Acts as Budget Control Tower ... Over 4 Billion Yen Invested Annually

When responsibility for vacant homes is divided among different ministries, policy confusion arises and efficiency declines. In a system where budgets are allocated at the discretion of each ministry, it is difficult to distribute funds according to the circumstances of local governments. Since there is no guarantee of annual budget support, local governments have no choice but to pursue vacant home maintenance projects conservatively.

In contrast, in Japan, the Ministry of Land, Infrastructure, Transport and Tourism acts as the control tower, overseeing budget support for the utilization and demolition of vacant homes. When a local government establishes a maintenance and utilization plan, the central government covers the associated costs. Over the past five years, the Ministry has allocated at least 4.5 billion yen (about 43.1 billion won) annually for the Comprehensive Vacant Home Support Policy. In 2021 and 2022, 4.5 billion yen was allocated, and in 2023, 5.4 billion yen was secured. Last year and this year, 5.9 billion yen was allocated each year, marking a significant increase in the budget.

In addition, the Japanese government provided local governments with clear budget support guidelines. When demolishing or utilizing vacant homes, the implementing entity is classified as the owner, local government, or nonprofit organization, and the ratio of local and national subsidies is adjusted accordingly. This measure was taken to prevent confusion among local governments during the budgeting process.

Experts emphasize that the sustainability of vacant home policies can only be secured when unified and integrated support measures centered on a control tower are established. Choi Eunyoung, director of the Korea Urban Research Institute, stated, "Currently, local governments are entrusted with vacant home management and budgeting, so pilot projects often fail to become full-scale projects and are frequently halted due to financial problems," adding, "To break the vicious cycle of vacant home policies remaining as pilot projects, a certain amount of national budget must be consistently invested every year."