Korea’s never-ending housing problem

The failure of housing policy is the basis of all ills in the Korean economy.

SHIN BOK-RYONGThe author is a emeritus professor of history at Konkuk University. According to Schwabe’s law in economics, the greater the expenditure share of housing, the more difficult living becomes, and the trend is more evident for the poor. The rich, therefore, should have a lower Schwabe Index, but this is not the case in Korea.

The news of someone’s house priced at 15 billion won ($11.4 million) and another spending 7.2 billion won on renovations for the spring is shocking enough to frustrate ordinary people. I remember myself getting lost after going to the bathroom when I visited a rich family.

Whether one is rich or poor, housing costs are high in Korea. Housing prices are high, with the cost of building walls and gates the highest in the world. In some cases, you have to pass through nine gates to meet the owner. Housing is not for convenient living but to show off one’s status. In 982, Choi Seung-ro, a founding contributor of the Goryeo Dynasty (918-1392), was worried that Koreans spent too much money on their homes.

Kim Bu-sik (1075-1151), a civil servant of the mid-Goryeo Dynasty, pointed out the issue of luxury housing in the most painful way. He is a controversial figure, but thanks to his book, “Samguksagi,” or “The Chronicles of the Three States,” the period could be vividly restored. A descendant of King Gyeongsun, the last king of the Unified Silla, was not favorable toward Baekje. But when discussing the palace of Baekje’s King Onjo, he recorded, “It was frugal but not shabby, beautiful but not lavish.”

In modern economics, one person requires about five pyeong (178 square feet) to live comfortably, so if the space is about 30 pyeong, it is big enough for a family of four to live in. The founder of the Japanese conglomerate Matsushita lived in a small two-story house all his life, but such a recommendation is nearly meaningless in Korea.

Because of the housing shortage, newlyweds have to work for 25 years to own a home without debt. This delayed the young generation’s marriage and childbirth, leading the country to a population cliff.

The failure of housing policy is the basis of all ills in the Korean economy. A government that cannot solve this perennial problem is incompetent.