How housing welfare policies impact housing cost burdens: An analysis of housing welfare policy efficacy and household characteristics

Excessive housing costs not only cause housing problems but also various social problems. To remedy the increasing burden of housing costs, South Korea has implemented several housing welfare policies. Previously, housing welfare policies focused on housing supply. More recently, policies have focused more on the expanding housing demand. However, there are insufficient empirical studies that show the effectiveness of demandfocused policies and how they reduce housing cost burdens. This study aims to examine the impact of South Korea's housing welfare policies that focus both on supply and demand on housing cost burdens. To examine the effectiveness of housing welfare policies, data from the Korea Welfare Panel Study were analyzed, and households were examined by income level. Results indicate that both supply-focused and demand-focused housing welfare policies had significant effect on reducing housing cost. The housing allowance policy, a demand-focused policy, showed an effect as time passed and the allowance amount increased for all households and low-income households. Rental deposit loan support significantly increased housing cost burdens for high-income households, which may be attributed to how households upgrade to better housing environments with rental deposit loan support. Based on these findings, this study presents policy implications for housing welfare policies.

Automated summary

Excessive housing costs cause housing and social problems. To tackle this issue, South Korea has implemented housing welfare policies that focus on both supply and demand. These policies have been proven to effectively reduce housing cost burdens.