Neighborhood effects of housing program using Jeonse in Korea

Abstract

<jats:sec> <jats:title content-type="abstract-subheading">Purpose</jats:title> <jats:p>This study aims to introduce the Youth Jeonse Rental Housing Program using the unique characteristics of the Korean housing market to explain its theoretical value in the current theoretical landscape of public housing and to identify the effect of the program on the regional housing price.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title> <jats:p>This study uses three hedonic price models on the basis of Korea’s housing market, namely, own, jeonse and rent models. Moreover, it uses the hierarchical linear model to include both house- and region-level variables.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Findings</jats:title> <jats:p>Analysis shows that youth rental housing has no effect on falling prices in the region unlike long-term rental housing. Thus, the policies using regional tenure system are more effective in the social mix than existing public housing policies.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Originality/value</jats:title> <jats:p>This study introduces the program using Korea’s unique tenure system called jeonse, arguing its advantages for the supplier, recipients and regional neighborhoods. Suppliers can easily provide affordable housing at a low economic and administrative cost, whereas recipients can easily mix socially, have broad housing choices and a fighting chance for a stable life. Additionally, this policy has a low negative impact on the region. Furthermore, this study theoretically presents the potential for mixed paths other than demand or supply policies. It introduces and analyzes special policy objectives for youth housing problems.</jats:p> </jats:sec>

Do physical characteristics of housing and neighborhood environment impact high Jeonse price ratio?: Focusing on whether Jeonse is a high risk

“…전세제도는 우리나라 고유의 주택임대차 계 약형태로 정의되고 있다 (서승환, 1998). 그러나 일부 연구에 의하면 해외에도 존재하고 있는 제도이며, 인도, 아프가니스탄, 볼리비아 등의 소수국가에서 시행되고 있는 것으로 나타났다 (김진유, 2015;Farfan, 2004;Feather, 2018;Navarro and Turnbull, 2010) (김기중, 2023;김기중 외, 2021;김지연․남진, 2021;Yun, 2021). 이뿐만 아니라 해외에서 국내의 전세제도를 바라봤을 때, 사금 융 역할을 하는 제도의 성격이 강한 특이한 한 국의 고유한 계약형태로 평가받고 있다 (Ambrose and Kim, 2008;Ronald and Jin, 2015).…”

Predicting the Non-Return of Chonsei Lease Deposits in the Republic of Korea

“…We calculated the volatility of house prices based on the standard deviation of monthly housing price index changes over the 24 months preceding the default prediction period. We collected 16 interest rates from the Bank of Korea Economic Statistics System (ECOS 2011-2021, the Korea Federation of Banks (KFB 2021), and the Korea Financial Investment Association (KOFIA 2021). We employed the coincident composite economic index provided by the Korean Statistical Information Service (2022) for the macroeconomic condition.…”

“…Chonsei provides numerous advantages to landlords, offering direct capital for property purchases without resorting to mortgages. From a tenant's perspective, Chonsei is the cost-effective rental housing option to save taxes, interests, and monthly rent burdens compared to owner occupancy or monthly rent (Cho 2006;Ronald and Jin 2015;Yun 2021). However, public concerns have arisen when contemplating the potential repercussions of landlords defaulting on Chonsei contracts.…”

The Influence That Jeonse Rental System Brought to the Housing Bubble in Korea

“…Adopting the hedonic price model and the hierarchical linear model, it highlights that the plan combines the policy characteristics of the demand side and the supply side. This innovative attempt provides new insights into housing challenges [10].…”