& Justice
Situation
Analysis
What is the housing crisis in South Korea?
Index
The Beginning of Housing Instability in Korea
The housing rental market in Seoul and the broader capital region has experienced rapid transformations since the beginning of the 2020s. Social anxiety around housing instability has sharply intensified due to simultaneous rises in housing prices and jeonse (deposit-based rental) rates, changes to rental-related legislation, and growing incidents of jeonse deposit fraud. Specifically, the so-called "Three Rental Laws," introduced in 2020—including the Right to Request Lease Renewal, Caps on Rent Increases, and the Mandatory Reporting of Lease Agreements (amendments to the Housing Lease Protection Act)—were implemented to stabilize tenants’ housing conditions. However, these measures have also triggered significant controversy due to unintended side-effects and resulting conflicts.
Notably, perceptions of these policies vary widely between renters without property and homeowners, leading to intensified debates over the efficacy of these regulations. These debates became particularly heated during political shifts and changes in government, resulting in polarized arguments regarding whether to continue or abolish these laws. This report examines the evolution and outcomes of housing rental policies from 2020 to 2025, focusing primarily on Seoul and its metropolitan area, and systematically analyzes differences in perceptions between tenants and landlords.
To achieve this, the report reviews policy changes chronologically, analyzes social responses and media coverage of these policies, introduces representative cases of stakeholder conflicts in the rental market, and evaluates current issues and limitations from the perspectives of the various involved parties. Additionally, the report derives implications from comparisons with rental policies in other major countries. Finally, recommendations are proposed for balanced solutions and future policy directions, with the ultimate goal of exploring how to achieve social equilibrium between ensuring tenants' residential stability and safeguarding landlords’ reasonable rights.
Introduction of the "Three Rental Laws" and Initial Market Reactions
In July 2020, the Moon Jae-in administration revised the Housing Lease Protection Act to enhance tenant protections, implementing what became known as the "Three Rental Laws."
The key provisions included:
Right to Lease Renewal: Tenants gained the right to request a one-time lease renewal upon the expiration of their initial two-year contract. Landlords could not reject this request without valid justification.
Rent Cap Regulation: Rent increases upon renewal were capped at a maximum of 5% above the previous rent amount.
Owner-Occupancy Requirement: Landlords who declined renewals citing intentions to reside in the property themselves were obligated to pay damages to the previous tenant if the property was rented to a third party within two years.
Additionally, from June 2021, a mandatory reporting system was introduced, requiring landlords and tenants to officially report details of rental agreements, including deposits and rental fees. These legislative changes, hailed as "the most significant reform to rental laws in 31 years," effectively extended tenants' housing security to up to four years, marking a substantial shift in Korea’s rental market.
Results:
Tenants: Immediately following implementation, tenants largely welcomed the new laws, anticipating relief from unexpected rent hikes and moving-related anxieties. Indeed, statistics indicated that over 70% of tenants exercised their right to renew contracts in 2021, which was widely interpreted as evidence of improved housing stability.
Landlords: However, landlords quickly voiced strong opposition, claiming infringement upon their property rights. Many expressed frustration, with some asserting, “It’s my home, yet tenants now seem free to stay indefinitely.” To circumvent the new restrictions, certain landlords demanded higher upfront deposits equivalent to four years' rent. This resulted "dual structure" in rental pricing, whereby landlords significantly increased rents for new contracts or replaced existing tenants with new ones at considerably higher rates, thus creating market distortions and undermining the laws’ intended benefits.
Market Reaction: After the implementation of the laws, jeonse (deposit-based rental) prices sharply increased. Reports indicated that the average jeonse price for apartments nationwide rose dramatically from KRW 2.98 million per square meter in July 2020 to KRW 4.15 million per square meter by July 2022, reinforcing landlords’ arguments against the new regulations. In Seoul specifically, jeonse prices rose continuously for 100 consecutive weeks starting in mid-2019, showing a steep upward trend throughout 2020 and 2021. Critics argued that rather than stabilizing rental prices, the rental laws triggered a surge in prices for new contracts, thereby exacerbating the rental crisis.
Jeonse Market Instability and the Government's Short-term Measures
In the second half of 2021, one year after implementing the Three Rental Laws, instability in the jeonse (deposit-based rental) market emerged as a prominent social issue. Many lease renewals from 2020, enabled by tenants exercising their new right to renew leases, were due to expire starting in the summer of 2022, prompting widespread concerns about renewed instability in the rental market. To address fears of rapidly rising rents and potential mass displacement of tenants, the government introduced emergency measures at the end of December 2021.
Among these measures was an incentive policy granting landlords who limited rent increases to 5% or less the benefit of fulfilling one year of the two-year occupancy requirement for capital gains tax exemption. In other words, if landlords voluntarily restrained rent hikes, they would partially satisfy conditions for a tax break upon eventual property sale. The government's intention was to encourage landlords' cooperation voluntarily through such incentives.
2021 Jeonse Supply
However, the effectiveness of these measures soon faced skepticism. Critics pointed out that the policy was limited only to single-home owners whose properties had a government-assessed value below KRW 900 million, excluding multiple-property owners who were significant actors in the rental market. Moreover, questions arose regarding whether the reward of easing the occupancy requirement was sufficient motivation for landlords.
Real estate communities responded cynically, remarking: “What does limiting rent hikes to 5% have to do with capital gains tax exemptions?” and characterizing the situation as the government "pleading with landlords." Tenant advocacy groups argued that the policy amounted to little more than politely asking landlords not to raise rents, dismissing it as a mere temporary solution ahead of an expected rental crisis once the two-year contracts expired.
Seoul Mayor Oh Se-hoon
Meanwhile, at the municipal level in Seoul, a notable shift in public housing policy was observed. Following his election in the April 2021 by-election, Seoul Mayor Oh Se-hoon pursued housing policies distinctly different from those of his predecessor, Park Won-soon. As Seoul Housing and Communities Corporation (SH) sharply curtailed its purchase-based public rental housing programs, the supply of public rental housing in Seoul significantly declined after 2021.
For instance, SH's procurement of rental units fell drastically—from 6,700 households in 2020 to just 850 in 2022, an 89% reduction, achieving only 16.5% of its planned target for 2022. Furthermore, criticisms arose over the city’s failure to properly utilize allocated budgets, resulting in over KRW 2.3 trillion in unused funds from 2021 to 2023. This shift toward prioritizing private development and accelerated redevelopment (such as rapid integrated planning and Moa Town projects) led to accusations that Seoul was neglecting affordable housing for low-income residents. In summary, the year 2021 was marked by a convergence of short-term responses to rental market instability and broader shifts in housing policy direction. Despite the central government’s attempts to mitigate adverse effects following the introduction of the rental laws, restoring market trust proved challenging. Moreover, the reduction of public housing by local governments such as Seoul conflicted with national policy objectives, ultimately undermining government credibility among both tenants and landlords.
Major Shift in Rental Housing Policy
In 2022, significant changes occurred in South Korea’s rental housing policy due to both presidential and local elections. The Yoon Suk-yeol administration, inaugurated in May, characterized the previous government's real estate policy as a "failed approach dominated by excessive regulation," advocating instead for comprehensive deregulation and restoration of market mechanisms.
Even before officially taking office, President-elect Yoon’s transition committee criticized the adverse effects of the "Three Rental Laws," signaling their intention to either repeal or significantly amend these regulations. This stance triggered considerable debate within society. The ruling party and administration argued that the rental laws had led to sharp increases in jeonse prices for new contracts, reduced jeonse availability, and consequently, intensified market instability.
In contrast, opposition parties and tenant advocacy groups strongly opposed what they viewed as "hasty repeal without clear justification," emphasizing the positive impact of the rental laws. They pointed out that these regulations had guaranteed tenants the right to live securely for at least four years, significantly strengthening housing stability.
Rental Housing Policy Shift
Partial Revision of the Three Rental Laws
Ultimately, the Three Rental Laws were not fully repealed but instead underwent partial modifications. Early in the Yoon Suk-yeol administration, discussions included proposals such as expanding tenants' rights to renew contracts indefinitely or adjusting the rent cap. However, amid negotiations in the National Assembly and fluctuating public opinion, the administration hesitated to pursue aggressive legislative changes. Instead, the government prioritized measures such as temporary reductions in heavy capital gains taxes for multi-homeowners and easing comprehensive real estate taxes (종합부동산세, Jongbu-se).
For example, the heavy capital gains tax imposed on multi-homeowners was temporarily suspended to encourage property sales, while adjustments in the tax base and rate structures for Jongbu-se reduced tax burdens, especially for single-homeowners, and eased the heavy taxation previously applied to multiple-homeowners. Under the Moon administration, the number of people subject to Jongbu-se had nearly doubled, increasing from 740,000 in 2020 to 1.28 million in 2022. The Yoon administration mitigated this burden significantly through measures such as lowering the Fair Market Value Ratio and expanding deductions for single-homeowners. These steps were aimed at alleviating homeowners'—particularly multi-property owners'—dissatisfaction and reviving the sluggish real estate market.
Rising global interest rates increased loan repayment burdens, causing home prices to fall and subsequently triggering issues such as "reverse jeonse" (where declining jeonse prices made it difficult for landlords to return tenants’ deposits). Consequently, the government shifted its attention away from modifying rental laws and instead focused on combating jeonse fraud and providing rental support measures. Additionally, facing a long-standing debate between expanding public housing versus encouraging private rentals, the Yoon administration clearly prioritized boosting private rental housing supply. The "August 16 Housing Stability Measures" announced in August 2022 outlined plans to supply 2.7 million housing units nationwide, with a significant portion coming from urban redevelopment, reconstruction, and private-sector rental housing initiatives.
Jeonse Price Fluctuations and Reverse Jeonse
Simultaneously, the administration partially reinstated the private rental business registration system, which had been abolished under the previous government. Specifically, the short-term rental registration program abolished in 2020 was set to be reintroduced in June 2025 with a minimum rental period of six years. However, apartments were excluded from this reinstatement; only non-apartment residences such as multi-family villas or row houses qualified for tax incentives, including exemptions from Jongbu-se and reduced capital gains taxes. This compromise aimed to encourage landlords' participation in the rental market while addressing previous criticisms of excessive benefits to apartment-based rental businesses. In summary, 2022 marked a major turning point in housing policy.
Ultimately, while the Three Rental Laws largely remained intact, notable shifts occurred regarding taxation and housing supply strategies. These changes had mixed impacts on landlords and tenants alike: tenants benefited from the continued existence of protective legislation yet faced uncertainties regarding future reforms, while landlords saw reduced tax burdens but remained dissatisfied with lingering restrictions like renewal rights.
2023 Jeonse Deposit Fraud Crisis and Emergency Response Measures
In 2023, a new crisis emerged in South Korea's rental market: widespread jeonse deposit fraud. Starting from late 2022, a series of high-profile fraud cases involving the non-return of tenants’ jeonse deposits, infamously known as the “Villa King” and “Construction King” incidents, surfaced nationwide. These scandals developed into serious social issues, particularly affecting tens of thousands of young tenants and newlywed couples in the Seoul metropolitan area.
According to the Ministry of Land, Infrastructure, and Transport, over 60% of victims were concentrated in the capital region, and notably, about 75% were young people in their 20s and 30s. Most fraud cases exploited so-called "gap investment" schemes—transactions in which nearly the entire property purchase price is covered by the tenant’s jeonse deposit. Organized criminal groups purchased multiple villas or officetels using proxies and intentionally failed to return tenants' deposits. These incidents revealed structural vulnerabilities stemming from high jeonse-to-sale price ratios and lax management in rental market oversight. As the jeonse fraud crisis intensified into a significant political and social issue, the government and National Assembly rapidly formulated response measures. In May and June 2023, a bipartisan agreement led to the enactment and implementation of the Special Act on Supporting Victims of Jeonse Fraud and Residential Stability.
The legislation officially recognized certain affected tenants as "certified victims," providing support such as priority rights to purchase properties in foreclosure auctions, low-interest housing loans, and priority access to public rental housing. Additionally, the law included measures to temporarily halt ongoing auctions and sales proceedings, enabling the Korea Land and Housing Corporation (LH) to purchase affected properties and lease them back preferentially to victims. At the governmental level, discussions began around preventive measures, including easing eligibility criteria for jeonse deposit return guarantees provided by the Korea Housing & Urban Guarantee Corporation (HUG), and exploring mandatory insurance enrollment for landlords to guarantee deposit returns.
Meanwhile, the Ministry of Justice submitted an official analysis to the National Assembly, identifying multiple contributing factors such as a sharp rise in jeonse prices due to the Three Rental Laws followed by a sudden decline due to rising interest rates. The ministry further proposed solutions, including enhancing transparency in rental markets and strengthening penalties for real estate agents complicit in fraud.
Jeonse Fraud Crisis
The jeonse fraud crisis profoundly disrupted South Korea’s rental housing market. Tenants, in particular, experienced a severe erosion of trust in the jeonse system itself. Many tenants shifted toward monthly rental contracts, stating they preferred monthly rent due to heightened risks, while others rushed into buying homes to avoid further uncertainty. On the other hand, landlords—especially those owning multiple properties—became increasingly wary of potential burdens or tighter regulations, as government responses were largely focused on compensating tenant victims.
Fortunately for landlords, the Special Act primarily emphasized victim relief rather than imposing broad punitive measures or comprehensive regulations targeting all landlords. Nevertheless, some responsible landlords voiced frustrations, noting they felt unfairly labeled as "potential scammers." Most significantly, the jeonse fraud scandal severely damaged public trust in government oversight. Criticism grew widespread that both the government and public institutions responsible for managing and supervising the rental housing market had failed to fulfill their roles adequately.
This criticism was exacerbated by political assertions from the ruling party that the Three Rental Laws introduced during the Moon administration indirectly contributed to rising jeonse prices and created conditions conducive to fraud. Additionally, previous scandals, including revelations of speculative land transactions by employees of the Korea Land and Housing Corporation (LH) in new town developments (2021), reinforced perceptions of government mismanagement. President Yoon Suk-yeol repeatedly emphasized firm responses to the jeonse fraud incidents, striving to restore confidence. However, regaining public trust after such events is expected to be a lengthy and challenging process.
2024-25: Institutional Revisions and the Constitutional Court Decision
In 2024, the most significant development concerning rental housing was the Constitutional Court’s ruling. In February 2024, the court unanimously ruled that core provisions of the Three Rental Laws—specifically the right to request lease renewals and rent-increase caps—were constitutional, rejecting landlords' challenges originally filed in 2020. The court emphasized that housing stability is essential for a dignified life, and thus, the state has an obligation to protect economically vulnerable tenants. It also stated that the restriction on landlords’ contractual freedom was limited to a relatively short period (four years), making it neither excessive nor disproportionate.
This decision reinforced legal stability for key aspects of the rental laws, alleviating concerns of their sudden abolition or weakening. Tenant groups warmly welcomed the court’s ruling, while landlord organizations expressed disappointment and dissatisfaction. Some landlords considered precautionary measures, such as demanding rental deposits equivalent to four years in advance, to mitigate the potential impacts. Experts noted that while the ruling itself would not immediately trigger major market shifts, it resolved substantial legal uncertainties, creating an environment in which the government and National Assembly could pursue more constructive legislative amendments. Following the court’s decision, discussions on improving the rental housing system continued cautiously in political circles.
3080+ Housing Supply Plan
Some ruling-party lawmakers and the Ministry of Land, Infrastructure, and Transport explored proposals either to expand tenants' renewal rights—such as allowing unlimited renewals or increasing permitted renewals from one to two—or, conversely, to impose stricter conditions on renewal requests. However, sharp disagreements between tenant and landlord advocacy groups prevented easy consensus. Meanwhile, in May 2025, the National Assembly approved amendments extending and expanding the scope of the Jeonse Fraud Special Act. Victim support measures, initially set to end in May 2025, were extended for two more years (until May 2027), and newly identified fraud cases emerging after 2023 were included within its scope. This extension underscored the long-term nature of the jeonse fraud crisis and the ongoing need to manage its consequences in the coming years. As of 2025, the government is preparing a comprehensive roadmap aimed at stabilizing the rental housing market. The Ministry of Land, Infrastructure, and Transport introduced plans to modernize the rental housing system, including mandatory deposit-return insurance for landlords, improved standardized lease contracts, and the creation of a public rental information platform.
Results:
Tenant Renewal Rights:
- Discussions emerged on expanding tenant renewal rights (unlimited or additional renewals) or imposing stricter renewal conditions.
- Sharp disagreements between tenant and landlord groups stalled consensus.
Jeonse Fraud Special Act:
- Extended victim support measures until May 2027.
- Expanded coverage to include fraud cases identified after 2023.
- Highlighted the long-term nature of the jeonse fraud crisis.
Government's Comprehensive Roadmap (2025):
- Mandatory deposit-return insurance for landlords.
- Improved standardized lease agreements.
- Creation of a public rental information platform.
Homeownership and Public Housing Initiatives:
- Shared-equity and cost-controlled housing for middle-class and young buyers in Seoul metropolitan area.
- Seoul Mayor Oh Se-hoon pledged increased public housing supply, including 5,000 rental units for young adults and newlyweds.
Comparative Perspectives: Renters vs. Homeowners
This chart summarizes the differing viewpoints between renters (non-homeowners) and homeowners regarding the housing policies and market conditions discussed earlier. Given their opposing interests in housing, each group prioritizes and responds to the same issues differently. Particularly, differences in perceptions about taxes, deposit protection, housing stability, property values, government credibility, and transportation/regional development often serve as sources of policy acceptance or conflict. Table 1 below compares typical views of renters and homeowners on these key housing issues. (Note: Individual perspectives may vary, but this summary reflects general trends.)
[Tax Policy]
Perspective of Renters (Non-Homeowners)
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Tend to support higher property and capital gains taxes on multiple-homeowners and owners of expensive homes, expecting these measures to curb speculation and stabilize housing prices.
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Although renters do not directly bear property tax burdens, they remain concerned that increased taxes on landlords may lead to higher rents.
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Advocate expanding tax benefits for renters, such as monthly rent tax credits and interest support on deposit loans for young tenants.
[Tax Policy]
Perspective of Landlords (Homeowners)
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Frustrated by sharp increases in comprehensive real estate taxes (Jongbu-se) and acquisition taxes in recent years, perceiving these hikes as a "tax bomb" and infringement of property rights.
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Inclined to shift increased tax burdens onto tenants by raising jeonse deposits or converting to monthly rent, viewing tenant protection policies as extra costs borne by landlords.
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Generally welcoming of the Yoon administration’s tax reduction policies, though frequent changes in tax rates have led to reduced trust in policy stability.
[Jeonse Deposit Protection]
Perspective of Renters (Non-Homeowners)
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Highly sensitive to risks such as jeonse deposit fraud, viewing their rental deposits as lifetime savings that require government protection.
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Strongly favor reinforcing protective measures like mandatory enrollment in HUG deposit insurance. Some consider the jeonse system fundamentally insecure and advocate compulsory deposit-return guarantees or the introduction of escrow systems.
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Demand stricter penalties against landlords who delay or avoid returning deposits. Some even propose extreme measures, such as government-guaranteed compensation in cases of landlord default.
[Jeonse Deposit Protection]
Perspective of Landlords (Homeowners)
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Generally responsible in returning tenants' deposits promptly, but strongly object to being treated as potential criminals due to a minority of malicious landlords.
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Feel burdened or resistant toward mandatory deposit-return insurance, viewing extra costs such as insurance premiums as unfairly imposed solely on landlords.
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Agree in principle with strengthening protection of jeonse deposits, but suggest that tenants also bear some responsibility. (For instance, some landlords argue that tenants should be cautious of overly cheap rental deals.)
[Housing Stability]
Perspective of Renters (Non-Homeowners)
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Prefer long-term residence to maintain stability in their daily lives. Strongly support extending renewal rights to minimize frequent moves, which cause significant financial and emotional stress.
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Highly value predictable housing expenses without sudden rent increases, tending to prefer jeonse over monthly rent due to its relatively stable costs.
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When forced to relocate due to neighborhood redevelopment or aging buildings, demand assistance in finding alternative housing solutions (e.g., priority access to public rental housing).
[Housing Stability]
Perspective of Landlords (Homeowners)
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Homeowners residing in their sole property generally feel stable, but those renting out additional properties express frustration that tenants’ renewal rights restrict their ability to fully utilize or manage their assets (e.g., difficulty regaining possession for personal reasons, such as children's marriage).
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Landlords emphasize stable rental income. While appreciating reliable tenants who pay promptly, they strongly believe rents should reflect market conditions after contract expiration, often criticizing the 5% cap as excessively restrictive.
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Some landlords express frustration that tenant protection laws "tie up" their properties, voicing concerns over tenants potentially occupying their property indefinitely.
[Asset Value]
Perspective of Renters (Non-Homeowners)
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View rising housing prices as burdensome, making homeownership increasingly unattainable. Prefer stable or gently declining home prices.
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Jeonse deposits are tied to housing prices, making it harder to find rentals when prices surge. Strongly support price stabilization policies.
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A minority ready to purchase homes may fear sharp declines in property values, but generally prefer stable or declining prices over rapid increases.
[Asset Value]
Perspective of Landlords (Homeowners)
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Consider housing a key financial asset, particularly landlords with multiple properties who rely on them for income or investment. Generally welcome rising property values.
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Strongly oppose government policies that suppress or reduce housing prices, viewing them as "loss of assets." (E.g., backlash against price declines from multi-homeowner regulations in 2020–2021.)
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However, since the housing market downturn from rising interest rates in 2022, concerns have emerged about drastic price drops. Emphasize the need for a "soft landing," arguing that sudden declines negatively impact both landlords and tenants.
[Trust in Government]
Perspective of Renters (Non-Homeowners)
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Repeated policy failures over recent years have significantly undermined trust in government announcements. Renters frequently dismiss new measures as temporary fixes ("just another patch").
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Persistent housing price increases despite 23 policy interventions during the Moon administration, coupled with inadequate responses to the jeonse fraud crisis under the Yoon administration, have led to widespread skepticism among renters, fostering a belief that "no one can be trusted."
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Public scandals such as the LH land speculation controversy further increased disillusionment with government institutions.
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Nevertheless, renters consistently recognize that government intervention remains necessary to prevent greater market risks. Even amid distrust, many renters still advocate for active government involvement ("Despite doubts, ultimately, the government must act").
[Trust in Government]
Perspective of Landlords (Homeowners)
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Perceive the government’s housing policy as inconsistent and unstable, with widespread cynicism that trusting official policy guidance is naive ("Only fools trust and follow policies").
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During periods of tightened regulations, homeowners viewed the government as oppressive. Although conditions slightly improved under the Yoon administration, many remain dissatisfied, particularly due to ongoing policies like the Three Rental Laws.
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Fear increased monitoring and surveillance by the government following the jeonse fraud crisis, raising questions about policy transparency.
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Overall, tend to trust market mechanisms more than government interventions.
[Transportation and Regional Development]
Perspective of Renters (Non-Homeowners)
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Due to high housing costs in central Seoul, renters have strong interest in improving regional transportation networks, hoping initiatives like the GTX express rail will facilitate living in the metropolitan outskirts.
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Support expanding housing supply through new residential developments and third-phase new towns. Particularly favor constructing public housing within Seoul, criticizing local opposition as NIMBY (“Not In My Backyard”) behavior.
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However, renters believe that improved transportation alone is insufficient without quality rental housing in desirable areas, strongly emphasizing the importance of proximity between workplaces and residences.
[Transportation and Regional Development]
Perspective of Landlords (Homeowners)
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Generally welcome transportation improvements and development projects, as these directly boost property values. However, paradoxically resist building rental housing, particularly large-scale public rental complexes near their own neighborhoods, due to fears of declining property values.
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Landlords in desirable areas, such as central Seoul, anticipate further increases in rental prices as transportation infrastructure improves. In contrast, landlords in less accessible areas strongly demand better transportation facilities, such as subway expansions.
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While some existing homeowners express caution that new developments might increase supply and stabilize housing prices, most favor development for positive spillover effects like enhanced local commerce and neighborhood vitality.
Institutional Issues and Critiques from Different Perspectives
Criticisms from Renters:
Limited Lease Renewal Rights: Tenants criticize the restriction to a single lease renewal (totaling four years), arguing it leaves them vulnerable afterward to substantial rent hikes or forced relocation. Many advocate extending renewal rights or adopting permanent long-term contracts to enhance stability.
Weak Protection of Jeonse Deposits: The recent jeonse fraud crisis exposed serious weaknesses in deposit protection. Many tenants, even with deposit insurance, face complex claims processes or repayment obligations. Calls for escrow systems or mandatory landlord deposit insurance have not yet been implemented.
Insufficient Public Rental Housing Supply: Public rental housing remains drastically inadequate compared to demand, particularly for low-income and young populations. Supply is forecasted to barely reach OECD averages by 2025. Rigid eligibility and long wait times further exacerbate dissatisfaction, especially amid recent reductions in Seoul’s public housing initiatives.
Difficulty Resolving Rental Disputes: Dispute resolution mechanisms, such as mediation committees, are seen as weak and ineffective, leaving tenants reluctant to pursue legitimate claims. More effective enforcement and streamlined processes are strongly desired.
Criticisms from Landlords:
Infringement of Property Rights and Contractual Freedom: Lease renewal rights restrict landlords from freely using or disposing of their properties. Landlords view the 4-year mandatory tenancy as overly burdensome. The 5% rent cap is also seen as undue interference in private contracts, distorting the market.
Increased Tax and Cost Burdens: High comprehensive real estate taxes and acquisition taxes under the previous government significantly impacted landlords’ profitability. Although some relief measures were introduced, landlords remain wary of future policy reversals and feel significant fatigue from continuous regulatory pressure.
Reverse Discrimination and Moral Hazard: Landlords feel policies overly favor tenants, offering inadequate recourse against problematic tenants who damage property or default on rent. Conversely, eviction processes remain difficult, fueling concerns about moral hazard. Some landlords warn that over-regulation could lead ethical landlords to exit the market, ultimately harming tenants.
Reduced Market Activity and Supply: Landlords and experts suggest that excessive rental regulation reduces private rental supply and discourages investment, harming renters in the long term. Recent trends, such as reduced jeonse availability and shifts toward monthly rent, underscore these concerns. Ensuring balanced incentives for landlords is seen as crucial to maintaining a healthy rental market.