[Market Pulse] A "Housing First" Policy Is Needed

Lack of Detailed Discussion on Real Estate Policy Tasks
Beyond Supply, Regional Development Strategies Needed

The five-year national administration plan of the Lee Jaemyung government was announced at the National Planning Committee's public report meeting. In the area of real estate, only the fundamental principles of "expanding housing supply" and "realizing housing welfare" were presented as national policy tasks, raising questions about the specifics of implementation. Real estate policy is a topic that has a significant impact on the economy, society, and the overall national territory. Strangely, however, this discussion did not take place during the process of formulating the national administration plan.

According to the Household Finance and Welfare Survey and the National Balance Sheet as of last year, real assets, including housing, account for more than 70% of household assets. Therefore, it is reasonable to say that whether a household owns real estate and its location determines its assets and consumption. Globally, as housing has become a target for financial investment, housing prices have soared, and the asset gap between homeowners and non-homeowners has widened, accelerating the trend toward housing capitalism. Now, housing is not just a living space but a financialized asset and a means of unearned income, acting as a source of various inequalities.

At this point, the new government should consider the slogan "Housing First." This concept, first advocated by psychologist Sam Tsemberis, refers to a "housing-first policy." In New York, this meant providing long-term rental housing to the homeless unconditionally and then linking them to treatment and rehabilitation later. It gained attention for being more effective in helping the homeless resettle compared to previous policies. Seoul's supportive housing for the homeless and the "move-first virtuous cycle redevelopment project" were also introduced with this intent.

The policy of "considering housing first" can be widely applied not only to homelessness but also to issues such as youth independence, responses to regional extinction, and elderly care. For example, in Hamyang County, Gyeongnam, when Korea Land and Housing Corporation (LH) supplied 12 public rental homes to a village facing school closure, Seoha Elementary School was revived, demonstrating that providing quality housing can be an effective tool for rural revitalization. Recently, local governments across the country have been introducing affordable housing models such as the "10,000 won house" and "1,000 won house," which are also good examples of housing-first policies.

The housing-first policy cannot succeed by simply supplying houses. It is necessary to consider what kind of housing will be supplied, where it will be located, who will live there, what jobs and services will be provided, and what kind of community will be created and operated. In this respect, the recent development of public rental housing into residential platforms such as customized residential complexes for artists, young entrepreneurs, and the elderly, or local vitality towns, is highly significant. It is important not only because it provides affordable and comfortable housing, but also because it serves as a hub for solving local problems.

Many people still perceive the goal of housing policy as simply ensuring an adequate housing supply or stabilizing housing prices through financial tools such as interest rates or loan management. For the same reason, many local governments assign housing-related work not to housing policy or housing welfare departments, but to architecture or civil complaint departments. This is the result of confining the housing work of local governments within the boundaries of "housing construction permits and approvals."

For the housing-first policy to take root, local governments must take responsibility for housing policy. They should set the supply of affordable and stable housing as their top priority and combine supporting functions to implement this. I hope the Lee Jaemyung government will adopt the housing-first policy as a core policy direction and utilize it in areas such as human rights, welfare, and regional development.

Byun Changheum, Professor of Public Administration at Sejong University (former Minister of Land, Infrastructure and Transport)