Low-income housing in a social service-oriented economy : housing investment and national policy in Korea
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Date
1983
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Abstract
The purpose of this study was to investigate policies that would maximize the flow of capital and maximize use of available capital to the housing sector. It is the contention of this study that current government policies are unlikely to make possible the achivement of the housing goals specified in the Fifth Five-Year Economic and Social Development Plan (1982-1986). Housing production increased from 65,000 units annually from 1962 to 1966 to an average of 220,000 from 1976 to 1981. Likewise, investment in the housing sector increased from 1.5 to 4.7 percent of the GNP. Despite these efforts, housing conditions have not improved. Low investment in the housing sector, high costs of land and land speculation, and an inadequate housing financing system, together with a high population growth rate and rapid urbanization, have tended to worsen the situation. Consequently, the Fifth Plan raised its housing target to 1.46 million units. Reaching this target, however, is not optimistic due to lack of capital in the housing sector, construction of larger units, and the rapid increase of land prices. The following suggestions are made to achieve the aforementioned housing goals and to boost housing production further. First, the possibility of lifting interest rate restrictions as a means of increasing credit supply is suggested. Also, development of a secondary mortage market and creation of mortgage insurance programs could increase to potential for financing the housing sector. Second, inducement of more foreign capital would not only maximize the capital in the housing sector but also improve the financial structure of the National Housing Fund and the Korea Housing Bank. Third, consideration of the size of public housing units and control of land prices and speculation would maximize use of available capital in the housing sector. Fourth, tax incentives for unregistered small firms and individual builders should be studied as a means of boosting the private sector's contribution to public housing. Last, balanced regional development and the structural changes in national housing administration could reduce the housing shortage in urban areas and to facilitate the implementation of national housing policy and plans effectively. In other words, the solution to the housing problem rests on a radical shift from a growth-oriented to a social service-oriented economy.
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Typescript (photocopy).
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Urban and Regional Science