In the United States, a housing crisis in New York or San Francisco is usually treated as a problem for state and local governments. In South Korea, a surge in housing costs around Seoul can quickly become a national political crisis.
That difference helps explain why President Lee Jae Myung is preparing to join a broad government debate on housing policy on July 23. The discussion is not simply about one expensive city. It is about a metropolitan region that dominates the country’s jobs, education, wealth and housing demand, making instability there a problem for households across the country.
The government will begin a series of public forums on July 14 covering housing supply, mortgage rules, property taxes and the rental market. The first session, led by South Korea’s Ministry of Land, Infrastructure and Transport, is expected to focus on whether the government can increase supply quickly enough to calm the overheated market.
The urgency reflects the limits of the strategy South Korea has used so far.
The government has expanded land transaction permit zones, tightened mortgage restrictions and increased tax pressure on owners of multiple homes. It has also sharply reduced borrowing limits in newly regulated areas. Buyers without a home who could previously borrow up to 70% of a property’s value are now limited to 40%, while existing homeowners are generally barred from taking out mortgages for additional purchases.
Yet home prices, jeonse deposits and monthly rents have continued to rise together in Seoul.
Jeonse is a rental system widely used in South Korea in which tenants provide landlords with a large refundable deposit instead of paying conventional monthly rent. When home prices, jeonse deposits and monthly rents all increase at the same time, the pressure reaches both buyers and renters, leaving fewer households insulated from the market.
That has turned the policy debate into something larger than a dispute over taxes or lending rules. The government must decide whether tighter restrictions are still capable of controlling demand or whether the more urgent problem is that too few homes are reaching the market.
Officials have already announced plans to begin construction on 1.35 million homes in the greater Seoul region by 2030. A separate plan calls for roughly 60,000 homes on public land in locations including Seoul’s Yongsan International Business District, the former Taereung golf course and land near a racetrack in Gwacheon.
The projects, however, have moved slowly.
Construction cost disputes, financing problems, lengthy approval procedures and delayed legislation have prevented announced supply from becoming actual housing. The government is therefore expected to discuss faster permitting, stronger mediation for redevelopment disputes, relocation financing for residents and changes to rules that reclaim part of the profits generated by reconstruction projects.
The discussion will also examine whether South Korea’s overlapping regulatory system is producing unintended results. Seoul and several surrounding cities are covered by multiple restrictions designed to curb speculation and leveraged purchases. In some cases, buyers must also live in a home for at least two years, while redevelopment rights cannot easily be transferred.
Critics say those rules have redirected demand rather than reduced it. When one district is restricted, buyers often move into nearby areas that remain outside the same controls, pushing prices higher there instead.
Seoul Mayor Oh Se hoon has warned that the national debate could become too focused on determining who should pay more property tax. He has argued that the market needs evidence that homes will actually be built, not another set of supply targets that may take years to produce results.
Rental policy will be another major part of the debate. Officials are expected to consider ways to increase the number of homes available to tenants, reduce the burden on households without property and strengthen protections against fraud involving jeonse deposits.
The reason the issue has reached the presidential level is not simply that housing in Seoul is expensive. It is that South Korea’s capital region is too central to the country’s economy and household wealth for the problem to remain local.
The upcoming debate will test whether the government can move beyond restrictions that have failed to stop prices from rising and turn long promised housing supply into homes people can actually buy or rent.
