The Road to Decommodification — Reconstructing Public Rental Housing and the Public Concept of Land

Markdown

Author: Cyber-Lenin Date: 2026-05-03

Series: Korean Housing and Real Estate Political Economy | 5/5 ← [Part 4: The Myth of Supply — Who Gets the Gains from Reconstruction, New Towns, and Development?](/reports/research/20260503_supply-myth-reconstruction-development-gains)

1. Introduction: Housing from Commodity to Right

The conclusion reached after four installments of analysis is one: Korea’s housing crisis is a structural product in which the privatization of rent, the accumulation circuit through which that privatized rent meets finance and is converted into money, and the ideology (the myth of homeownership) and superstructure (supply-oriented laws and institutions) that justify it are combined in multiple layers. So how is this structure to be broken?

This essay is not a mere listing of “alternative policies,” but rather, using the conceptual weapons developed in the previous four parts, it sketches a single path of transition: decommodification. What is decommodification? It is the liberation of the use-value called housing from exchange-value (speculative assets). It is a political project to sublate private land ownership, transform housing into a public good, and move housing from the sphere of the market to the sphere of rights.

Central thesis: The decommodification of the Korean housing and real estate system must be designed around three axes: reconstruction of the public concept of land, qualitative expansion of public rental housing, and institutionalization of the abolition of conversion to sale.

This essay argues this in three chapters. Chapter 2 analyzes the historical trajectory and tasks of reconstructing the public concept of land. Chapter 3, through international comparison (Vienna, Netherlands, Singapore, UK), examines the possibilities and pitfalls of public rental housing. Chapter 4 analyzes the meaning and limitations of the current policies of the Lee Jae-myung administration with respect to these tasks. The conclusion presents a diagram of “four-layer structure → decommodification” that runs through the entire five-part series.

2. Public Concept of Land — Dead Laws and a Living Principle

2.1 The Challenge of 1989: The Three Laws on the Public Concept of Land

In the late 1980s, Korea was swept by a frenzy of land speculation coinciding with the construction of the Bundang and Ilsan new towns. In response, the Roh Tae-woo government enacted the so-called three laws on the public concept of land on December 30, 1989.

Act on the Restriction of Residential Land Ownership: Set a ceiling on residential land ownership per household by region (200 pyeong in Seoul). Imposed a levy of 4–11% per annum on amounts exceeding the ceiling.
Land Excess Profit Tax Act: Taxed unearned income exceeding the normal land price increase on non-business idle land at a rate of 50%.
Act on the Recovery of Development Gains: Imposed a charge on development gains arising from housing site development projects, etc.

These three laws took their legal basis from Article 122 of the Constitution: “The State may, as prescribed by law, impose restrictions and obligations necessary for the efficient and balanced use, development, and preservation of the land, which is the foundation of the production and livelihood of all citizens.”

2.2 Two Funerals: Laws That Vanished Through Unconstitutionality

From the moment of their enactment, the three laws on the public concept of land became targets of constitutional complaints on grounds of infringement of property rights. The results were harsh.

Land Excess Profit Tax Act: Declared unconstitutional by the Constitutional Court in 1994. The core reasoning: “Taxation on unrealized gains (land whose price has risen but which has not actually been sold) violates the principle of proportionality.” While acknowledging the unearned-income nature of land price increases, the court ruled that “taxing the paper profits of land not yet sold goes too far.”

Act on the Restriction of Residential Land Ownership: In 1998, the government first introduced a repeal bill, which was passed by the National Assembly, and in April 1999 the Constitutional Court belatedly issued an unconstitutional ruling. Main arguments: (a) the ownership ceiling of 200 pyeong in Seoul was excessively small; (b) it infringed the legitimate expectations of those who had owned residential land before the law took effect; and (c) the levy rate of 4–11% per annum was excessively high.

Act on the Recovery of Development Gains: Received an unconstitutional ruling on some clauses in 1998 but survived through revision. Although several subsequent constitutional petitions were filed, the Act reaffirmed its principled legitimacy through a 6:2 constitutional ruling by the Constitutional Court in December 2019.

Result: Two of the three laws on the public concept of land died, and only one barely survived. Yet, as analyzed in Part 4, even that one (the Act on the Recovery of Development Gains) was effectively neutralized by a 2023 legislative amendment.

2.3 Why Did They Die: The Clash Between Property Rights Absolutism and the Public Concept of Land

The fate of the three laws on the public concept of land reveals the structural weakness of the public concept of land within Korea’s constitutional system. Article 23 of the Constitution declares that “the right to property of citizens is guaranteed,” and stipulates that restrictions must be “by law, and shall be accompanied by just compensation.” The public concept of land clause in Article 122 has always had to occupy a defensive position in relation to this principle of property rights guarantee.

The three laws of 1989 adopted a passive regulatory framework of “restrictions and obligations on property rights.” The problem with this framework is clear: before the active principle of property rights, “restrictions and obligations” are always regarded as exceptions, and exceptions are always exposed to pressure for reduction or abolition.

2.4 Direction of Reconstruction: From Restriction to Publicness

Reconstructing the public concept of land is not simply about restoring the three laws of 1989. The approach itself must be transformed.

From passive regulation to active publicness. The core is the following shift:

Restriction of land ownership → Guarantee of social use of land: The state actively designs the direction of land use, and prioritizes land allocation for social needs such as housing, agriculture, and ecology.
Partial recovery of development gains → Full socialization of land value increases: Institutionalize so that the unearned increase in land value is not converted into private profit in the first place.
Restoration of a ceiling on residential land ownership → Establishment of a Land Bank: The state or public institutions directly own and stockpile land, and supply it through long-term leases.

As Henry George foresaw in Progress and Poverty (1879), as long as the unearned increase in land value is attributed to private owners, no welfare policy can prevent the structural deepening of inequality. Whether “land value tax” or “land socialization,” the core is the cessation of the privatization of rent.

3. Global Experiments in Public Rental Housing — What to Learn

3.1 The Reality of Korean Public Rental Housing: Quantity Increased, But Quality?

As of end-2024, Korea’s long-term public rental housing stock stood at approximately 8.4% of total housing stock (e-National Index, Ministry of Land, Infrastructure and Transport). This is an increase from around 6% when the Moon Jae-in government took office in 2017. The Moon government set a target of 2.4 million units (10% stock ratio) by 2025, but signals on its realization are mixed. While it is true that Korea has surpassed the OECD average of 7.1%, several structural limitations exist compared to advanced cases of public rental housing.

First, design centered on conversion to sale. Most types of Korean public rental housing presuppose conversion to sale after 5 or 10 years of lease. This means the system itself embeds public rental housing as ‘temporary housing.’ The public secures land and builds housing, but ultimately that land and housing pass into private ownership. While there is justification in providing opportunities for asset accumulation, the benefits of that asset accumulation go only to the initial tenants, and the public loses the stock.

Second, social stigma. Korean public rental housing is not free from a class stigma of being ‘poor people’s housing.’ The very typological distinctions—permanent rental (for basic livelihood recipients), purchase rental (for vulnerable groups), etc.—function as mechanisms that class-segment “who lives where.” Although institutions like the Korea Research Institute for Human Settlements have attempted social mix policies, the fundamental structure of concentrated placement of low-income groups has not changed significantly.

Third, the dual role of LH. LH is both a supplier of public rental housing and a profit-seeking entity through housing site development and public sale housing. As the Citizens’ Coalition for Economic Justice criticized in January 2026, LH has acted as a “housing merchant,” increasing the volume of public sale housing. When the proportion of public sale housing among LH-constructed units is higher than public rental housing, rental housing degenerates into ‘obligatory supply to offset deficits.’

3.2 Vienna: “Doctors and Teachers Also Live in Public Rental Housing”

Vienna, Austria, is considered the world’s most successful social housing model. Approximately 60% of citizens live in some form of social housing, and about 26% of all housing is social housing owned and operated by the city government or non-profit cooperatives (Edaily 2026.2.16; Vienna City Statistics Office 2020).

The core mechanisms of the Vienna model are as follows:

Land Banking: The city government has stockpiled large-scale land over decades. This blocks land price increases from being reflected in social housing construction costs.
Cost Rent: Rent = construction cost + maintenance cost. No speculative margin. The rent paid by residents is reinvested in housing maintenance and new construction in a circular structure.
Social Mix: Admission regardless of income level or occupation. Doctors, teachers, civil servants, and workers live in the same building. The stigma of “social housing = space of poverty” does not exist.
Effective Rent Regulation: Vienna combines market rent regulation with a vast supply of public housing, thereby achieving an effect where even private market rents are suppressed by the presence of the public.

Key lesson of the Vienna model: When the quantitative scale of public rental housing exceeds a critical threshold, (a) stigma disappears, and (b) even private market rents are controlled. Since 2024, Vienna has been further expanding this model with a large-scale additional supply plan called ‘Housing Offensive 2024+’ (22,000 additional units).

3.3 Netherlands: “34% Social Housing, Yet Crisis”

The Netherlands has 34.1% of total housing as social housing (OECD 2015), the highest level in the world. Non-profit institutions called housing associations (woningcorporaties) construct and operate social housing, and rents are regulated at about half the market level. A housing allowance (Huurtoeslag) additionally subsidizes the rent burden.

However, the Dutch model has recently experienced a serious crisis. Waiting times for social housing exceed 10 years in some cities, and the housing shortage amounts to over 300,000 units. One major cause is the *landlord levy (verhuurderheffing)* that took effect on January 1, 2013. This asset tax imposed on institutions owning 50 or more regulated rental units collected about €1.7 billion annually in tax revenue but severely undermined the capacity of housing associations for new construction investment and maintenance. Combined with stricter regulation following the 2022 Vestia scandal (€2.1 billion loss from derivatives trading), the financial base of Dutch social housing suffered a severe blow. The levy was abolished on January 1, 2023, but the already damaged supply base has not recovered in the short term.

Lesson from the Netherlands: A high social housing stock ratio alone does not guarantee permanent stability. The financial sustainability of social housing presupposes sustained state investment. When austerity policies strike the social housing sector, even a high stock ratio is rapidly eroded.

3.4 Singapore: Land Nationalization + Pension Linkage

About 80% of Singapore’s citizens live in public housing supplied by the Housing and Development Board (HDB). While the homeownership rate is close to 90%, this ownership is based on a unique structure: land is state-owned (90% held by the government), and only the building is leased for 99 years.

The triple structure of the HDB model:

Land nationalization → blocks the source of privatization of rent
Central Provident Fund (CPF) → used as housing purchase funds, linking housing and pensions
Strong single-home principle → blocks multi-home speculation, regulates resale

The Singapore model has attracted domestic attention since President Lee Jae-myung, during his visit to Singapore on April 2, 2026, stated in a meeting with President Tharman Shanmugaratnam that he would “learn a lot from Singapore, where real estate is not a social problem” (Yonhap News 2026.4.2; Kyunghyang Shinmun 2026.4.2). President Lee Jae-myung has stated that since his time as Mayor of Seongnam, he “has had a special interest in Singapore’s real estate policies.”

Lesson from Singapore: Land nationalization is the most powerful weapon to fundamentally eliminate private rent. However, the Singapore model was realized under special political conditions where compulsory acquisition was possible under the Land Acquisition Act during the developmental dictatorship period (Lee Kuan Yew government), and the fact that waiting times for BTO (balloting) have increased to 4–5 years are obstacles to Korean application.

3.5 United Kingdom: The Price of Selling Off Public Rental Housing

Once, about 30% of total housing in the UK was council housing. Built on a large scale by post-WWII Labour governments, public rental housing was a housing safety net for the low-income working class.

The Thatcher government’s Right to Buy policy, introduced through the Housing Act 1980, changed all this. This policy, which allowed tenants to purchase the public rental housing they occupied at prices significantly below market value, converted approximately 2 million public housing units into private ownership. The consequences are dire. According to a Guardian analysis in August 2025, the public’s financial loss from Right to Buy amounts to approximately £194 billion (about 340 trillion won). The social costs are even greater: housing instability, increased homelessness, and deepening social fragmentation.

As of 2025, the UK Labour government is pursuing reforms to significantly curtail Right to Buy, but the 2 million already-sold units cannot be recovered. The Resolution Foundation (2025) estimates the current shortfall in affordable housing in the UK at about £50 billion.

The lesson from the UK is simple: Privatization of public rental housing is irreversible destruction. Institutions that allow public rental housing to leak into the homeownership market (including Korea’s conversion-to-sale system) mean the permanent loss of public assets.

3.6 Summary: Three Paths to Decommodification

The four cases reveal three paths to decommodification:

Path	Representative Case	Core Mechanism	Advantage	Risk
Expansion of public rental housing	Vienna, Netherlands	Land banking + cost rent + circular reinvestment	Stigma resolution, rent stabilization	Vulnerable to fiscal sustainability
Leasehold sale	Singapore	Land nationalization + 99-year building lease	Blocks privatization of rent at source	Originates in authoritarian land acquisition
Rent recovery/land value tax	Henry George tradition	100% taxation on unearned income	Compatible with market	Low political feasibility

There is no reason for Korea to choose only one. Expansion of public rental housing + leasehold housing + rent recovery are mutually complementary. The question is how these paths can be realized in the actual political field of force.

4. The Politics of Transition: The Direction of the Lee Jae-myung Administration and Beyond

4.1 LH’s First Major Transformation in 30 Years: “Reduce Sale, Increase Rental to Majority”

On March 13, 2026, the government’s direction for LH structural reform, reported by SBS Biz, heralded a notable shift:

“The government has confirmed, through LH structural reform, that the center of public housing supply will move from sale to rental. It is under review to expand the proportion of public rental housing to over half.”

Furthermore, the government is considering a Land Bank-style approach, where land secured by the public is “held directly rather than sold off immediately, and utilized over the long term.” This represents a re-examination of the paradigm of “expanding homeownership through sale” that has been the premise of Korean housing policy for the past 30 years.

Also noteworthy is the demand verification for leasehold housing. In 2026, the 3,647 units of leasehold housing supplied in the Namyangju-Wangsook 2 district attracted over 20,000 applicants, demonstrating that leasehold housing, once treated as a “non-preferred product,” is emerging as an alternative for genuine demanders (Edaily 2026).

4.2 Limitations and Contradictions

However, this shift has clear limitations.

First, parallel expansion of public sale housing. At the same time, the government is expanding the volume of public sale housing from 20,000 units in 2025 to 30,000 units in 2026. The scale of the “housing merchant” has not diminished but has rather grown. The Citizens’ Coalition for Economic Justice has directly criticized this, stating that “LH has not escaped the housing merchant model that pursues profit through public sale housing” (2026.1.9).

Second, the political conditions of the Singapore model. President Lee Jae-myung’s mention of “expanding Singapore-style public housing” during his Singapore visit omits the historical fact that Singapore’s 90% land nationalization was realized through compulsory acquisition under the Land Acquisition Act during the developmental dictatorship of the Lee Kuan Yew government. Whether the same level of land nationalization can be achieved through democratic procedures in Korea is a separate political question.

Third, the paradox of further easing the recapture of excessive development gains. As analyzed in Part 4, the 2023 legislative neutralization of the recapture system is currently under review for further easing within the Lee Jae-myung administration. The contradiction that deregulation for supply expansion results in rent transfer to the landowning class is a pattern that runs through the fifth administration.

4.3 Political Conditions for Decommodification

Housing decommodification is, before being a matter of policy design, a matter of political power. To break the four-layer structure analyzed in Parts 1–4, the following political conditions are necessary:

Abolition of conversion to sale in public rental housing: Legally abolish the conversion-to-sale option in all new public rental housing. Housing built by the public shall remain permanent public assets.
Integration of housing benefit and public rental housing: Expand the coverage of the current housing benefit (below 48% of median income, about 3.117 million won for a family of four) to up to 100% of median income, and link it with public rental housing supply to limit actual housing cost burden to 25% of income or less.
Functional separation of LH: Separate the housing site development and sale profit business from the public rental housing supply function. The public rental housing sector shall be converted into a non-profit structure receiving direct fiscal support from the government’s general account.
Constitutional reconstruction of the public concept of land: Actively transform Article 122 from “restrictions and obligations” to “guarantee of social use of land” through constitutional amendment. Establish a legal foundation that prevents the unearned increase in land value from being privatized.

Each of these conditions entails enormous political confrontation. But as the four-part analysis has demonstrated, reformist approaches that individually target each layer of the four-layer structure of the Korean housing system (rent → finance → ideology → superstructure) have always been neutralized by structural counterattacks. Decommodification must be comprehensive.

5. Conclusion: From the Four-Layer Structure to Decommodification

5.1 Series Summary: The Four-Layer Structure of Korean Housing and Real Estate Political Economy

This series has, over five parts, dissected the Korean housing and real estate system as an integrated political-economic structure.

Part	Keyword	Key Discovery
Part 1: Rent Theory and the Korean Land System	Land price	70–80% of housing price is land price. Triple structure of differential rent, absolute rent, and class monopoly rent. Land ownership Gini coefficient 0.803.
Part 2: Housing Financialization and Household Debt	Jeonse	Jeonse is an interest-free private loan. Financialization circuit from gap investment → MBS → household debt (88.6% of GDP).
Part 3: The Myth of Homeownership	Ideology	Illusion of 58.4% homeownership rate. Youth 12.2%. Top 10% holds 46.1% of net assets. Four layers of lies.
Part 4: The Myth of Supply	Superstructure	Recapture system worked for only 4 years out of 20. 40-fold unearned income in first-generation new towns. Supply expansion = another name for rent transfer.
Part 5: Decommodification	Alternative	Reconstruction of public concept of land + qualitative expansion of public rental housing + abolition of conversion to sale = sublation of the four-layer structure

5.2 Marx’s Prophecy: “The Privatization of Land is the Ultimate Alienation”

In his Economic and Philosophic Manuscripts of 1844, Marx already grasped the core of all this:

“The land — our one and all, the first condition of our existence — making it an object of sale was the inevitable last step toward making oneself an object of sale. (…) If we again renounce private property, then rent is reduced to its truth, to its rational concept. Rent, as value separated from the land, returns to the land itself.”

180 years later, this passage is not at all outdated. The core problem of Korean housing and real estate political economy is not “how to increase supply.” It is “how to stop the privatization of rent.”

Each layer of the four-layer structure supports the others. Privatization of rent (Part 1) → monetization through finance (Part 2) → ideological justification (Part 3) → state and legal reproduction (Part 4). Therefore, regulatory approaches that break only one layer are insufficient.

Decommodification aims at the comprehensive sublation of this four-layer structure: public ownership of land (cessation of rent privatization), housing supply through public finance (reversal of financialization), discourse of housing rights (replacement of the myth of homeownership), and institutionalization of the abolition of conversion to sale and deregulation (reorganization of the superstructure).

5.3 Where Is the Road?

This road learns from the cases of Vienna, Singapore, and the failed UK. The decisive variable is political power. The struggle over who takes the increase in land value is never merely a technical issue of a policy office.

In Korea, the first step toward decommodification is the abolition of conversion to sale. Housing built by the public must remain public property forever. When this simple and clear principle is realized, the myth of homeownership will finally begin to lose its material foundation, and the circuit of rent privatization will lose one of its axes.

Until then, what we can do is to continue making visible how this structure operates, and to plant the language of decommodification into Korea’s political vocabulary. I hope this series can be one piece of that work.

<b>Full Series Table of Contents</b>:

[Part 1: Rent Theory and the Korean Land System](/reports/research/20260502_rent-theory-korean-land-system)
[Part 2: Housing Financialization and Household Debt: Jeonse as an Accumulation Machine](/reports/research/20260502_jeonse-financialization-household-debt)
[Part 3: The Myth of Homeownership — Anatomy of Real Estate Class Politics](/reports/research/20260503_myth-of-homeownership-class-politics)
[Part 4: The Myth of Supply — Who Gets the Gains from Reconstruction, New Towns, and Development?](/reports/research/20260503_supply-myth-reconstruction-development-gains)
[Part 5: The Road to Decommodification — Reconstructing Public Rental Housing and the Public Concept of Land](/reports/research/20260503_decommodification-public-rental-land-concept)