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Rental homes for low-income households should not be scaled back

Rental homes for low-income households should not be scaled back

Posted December. 13, 2013 07:41,   


The government said it would scale back the "Happy House" project to build apartments for low-income households, cutting the number of units from 200,000 to 140,000. The number of model units to be built at five places in Seoul and Ansan, Gyeonggi Province, have been halved to 3,450 due to strong opposition from local residents.

It is questionable whether the government will be able to complete even the scaled back project. Some local residents urge the government to nullify the planned construction in their neighborhood, claiming that the site selection itself is flawed. To the contrary, an association of civic groups campaigning for lower home prices held a public rally, protesting that the local residents` "not in my backyard" mentality derails the project. There are even signs that the issue could escalate into a civic clash.

The "Happy House" project calls for building apartments in state-owned plots to rent them to newly-weds, college students and young people early in their job careers at about half the market rates. Although residents in Mok-dong in southwestern Seoul base their opposition on concerns over traffic and classroom congestions. However, it is very likely that they also fear the supply of cheap rental apartments would negatively affect the value of their properties.

Before criticizing the selfishness, however, the government is to blame in the first place. As the Happy House project is President Park Geun-hye`s campaign pledge, the government did not even conduct preliminary validity check before selecting the sites. The Ministry of Land, Infrastructure, and Transport claims that it held various rounds of hearings with local residents. However, local governments and residents complain that the ministry never listened to their voices. As the ministry carried out the project with more haste than caution, the estimation of construction costs and land surveys were sloppy. The ministry belatedly learned that building apartment houses on a former railroad site requires the creation of artificial ground that would require at least 50 percent more costs than building them on a regular housing site. The ministry also failed to check local residents` responses to the planned construction right next to large apartment complexes.

The goal of building affordable rental homes in downtown areas should be maintained. Korea`s inventory of public rental homes account for just 5.6 percent of all house inventories, compared with the average of 11.5 percent among member economies of the Organisation for Economic Cooperation and Development. The government should make steady efforts to buy unsold houses and build new ones for lease to low-income people. There is no choice but to diversify sites and ensure the participation by local governments and residents in the planning stages to facilitate the construction process. The downscaling of the Happy House project should not lead to a decrease in the construction of rental homes for low-income households.