Housing Cost Burdens and Parental Support for Young Renters in South Korea

Abstract

In Korea, the housing issues faced by young renters negatively impact both their parents and themselves. This study aimed at exploring young renters’ situations whereby they receive financial support from their parents in order to pay current housing expenses, and their perception of housing cost burdens. Additionally, this study examined the influences on the reception of parental support and their perceived housing cost burdens. In February and March of 2021, an online questionnaire survey was conducted amongst young renters living independently from their parents and 385 responses from Jeonse renters and monthly renters with deposits in private rental housing units were analyzed. The major findings are as follows: (1) among the subjects, 43.4% had experienced receiving parental support in order to pay for housing expenses since their first instance of independent living, and 35.6% were still receiving parental support. (2) A discriminant model with a linear combination of the variables of age, income, residential location and rental deposit was found effective in predicting the receipt of parental support with 66.5% accuracy. (3) A linear combination of the variables of gender, rental deposit and monthly cash housing expenses was found to explain 5.8% of the total variance of perceived housing cost burdens. The results imply the necessity to expand the provision of public housing and housing subsidies to alleviate the financial burdens of young renters and their parents.

Generation rent on the housing treadmill: A study on South Korea's housing allowance programmes and recurring precarity

“…Depending on their parents' financial situation, young people's level of housing precarity and propensity to apply for a housing allowance programme varied. Since many young people must leave parental homes to move to metropolitan cities for education and employment (Jung, 2017; Kim & Yoo, 2021), the difference in parental financial assistance becomes a disparity in housing precarity (Hochstenbach & Boterman, 2017; Lee & Hwang, 2021). Young adults who receive at least a portion of their deposit and monthly rent from their parents can live in a relatively decent environment with a reasonable housing expense burden; those without parental support suffer the opposite circumstances.…”

“…Such financial dependence of co‐resident young adults also negatively impacts parents' well‐being (Aquilino, 1991). The housing expense burden is thus transferred to their parents, especially in Korea where parents strongly desire to support their children, thereby significantly straining retirement planning (Kwon & Jeon, 2020; Lee & Hwang, 2021). Using 2014 Korea Housing Survey microdata, Park and Lee (2015) found that nearly 30% of young renters living in either jeonse or paying monthly rent responded that their family provided financial support at an average of $29,727 per year.…”