All Issue

2022 Vol.13, Issue 4

General Article

The impacts of public housing program on housing prices: The case of South Korea
Jinsoo Ko1
,
Chunil Kim2*
1Associate Professor, Department of Urban Planning and Real Estate, Kwangwoon University, 20, Gwangun-ro, Nowon-gu, Seoul, South Korea
2Assistant Professor, Division of Real Estate and Construction Engineering, Kangnam University, 40, Gangnam-ro, Giheung-gu, Yongin-si, Gyeonggi-do, South Korea
*Corresponding Author
30 December 2022. pp. 398-413
PDF XML Citation
Abstract

Policy interventions in the housing sector are mainly designed to stimulate the provision of affordable housing. Countries across the world, however, seem to grapple with harsh opposition to public housing developments, which local residents tend to blame for a decrease in property values and the deterioration of their neighborhoods. South Korea has continued to expand their stock of affordable housing, but aggressive opposition from surrounding residents is frequently observed. This study adds to the existing literature by conducting an impact analysis of the major public housing program in Korea using the DID (difference-in-differences) methodology. The statistical evaluation results of the selected public housing projects exhibit mixed outcomes, in terms of the impact of public housing projects on surrounding housing prices. The empirical results of this study suggest that the small-scale and scattered provision of public housing in gentrifying areas is the least likely to generate negative housing value impacts on nearby neighborhoods.

Keywords
housing policy
public housing
NIMBY
difference-in-differences
References
1
U.S. Department of Housing and Urban Development (HUD), Low-Income Housing Tax Credits [Online], 2022. Available at: https://www.huduser.gov/portal/datasets/lihtc.html [Accessed 30/01/2022].
2
Office for National Statistics (ONS), Comparing affordable housing in the UK: April 2008 to March 2018 [Online], 2019. Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/comparingaffordablehousingintheuk/april2008tomarch2018 [Accessed 30/01/2022].
3
M. Brhane, D. Mason, G. Payne, and P. Monkkonen, Access to affordable and low-income housing in East Asia and the Pacific. 2014, The World Bank.
4
C. Potter, Two Million Houses: multiscalar spatial fixes in Korean housing policy. The Ideal City: between myth and reality. Representations, policies, contradictions and challenges for tomorrow's urban life, Urbino, Italy, 27-29 August (2015).
5
W.H. Carter, M.H. Schill, and S.M. Wachter, Polarisation, public housing and racial minorities in U.S. cities. Urban Studies. 35(10) (1998), pp. 1889-1911. 10.1080/0042098984204
6
A.R. Hirsch, Making the second ghetto: Race and housing in Chicago 1940-1960. 1998, Cambridge, UK: Cambridge University Press. 10.7208/chicago/9780226342467.001.0001
7
J.M. Hong and J.H. Lee, Public housing's influence on the neighboring private apartment. Journal of the Urban Design Institute of Korea Urban Design. 7(3) (2006), pp. 23-32.
8
T.H. Kean and T.L. Ashley, "Not in My Backyard": Removing Barriers to Affordable Housing. 1991, U.S. Department of Housing and Urban Development.
9
I.G. Ellen, M.C. Lens, and K. O'Regan, American murder mystery revisited: do housing voucher households cause crime?. Housing Policy Debate. 22(4) (2012), pp. 551-572. 10.1080/10511482.2012.697913
10
T.L. McNulty and S.R. Holloway, Race, crime, and public housing in Atlanta: Testing a conditional effect hypothesis. Social Forces. 79(2) (2000), pp. 707-729. 10.2307/2675514
11
D.W. Roncek, R. Bell, and J.M. Francik, Housing projects and crime: Testing a proximity hypothesis. Social Problems. 29(2) (1981), pp. 151-166. 10.1525/sp.1981.29.2.03a00060
12
C.G. Choi and S. Lee, Suburbanization in Asia: A focus on Seoul. The Routledge Companion to the Suburbs, B. Hanlon and T.J. Vicino (eds). 2018 Routledge, London, pp. 121-132. 10.4324/9781315266442-11
13
P.M. Cummings and J.D. Landis, Relationships between affordable housing developments and neighboring property values: An analysis of BRIDGE Housing Corporation developments in the San Francisco Bay Area, Institute of Urban and Regional Development, University of California at Berkeley, 1993.
14
R.F. Lyons and S. Loveridge, A hedonic estimation of the effect of federally subsidized housing on nearby residential property values, Department of Agricultural and Applied Economics, University of Minnesota, 1993.
15
C.-M. Lee, Dennis P. Culhane, Susan M. Wachter, The differential impacts of federally assisted housing programs on nearby property values: A Philadelphia case study. Housing Policy Debate. 10(1) (1999), pp. 75-93. 10.1080/10511482.1999.9521328
16
G. Galster and Y. Williams, Dwellings for the severely mentally disabled and neighborhood property values: The details matter. Land Economics. 70(4) (1994), pp. 466-477. 10.2307/3146641
17
E.G. Goetz, H.K. Lam, and A. Heitlinger, There Goes the Neighborhood? The Impact of Subsidized Multi-Family Housing on Urban Neighborhoods (CURA 96-1), Center for Urban and Regional Affairs, University of Minnesota, 1996.
18
X. de Souza Briggs, J.T. Darden, and A. Aidala, In the wake of desegregation: Early impacts of scattered-site public housing on neighborhoods in Yonkers, New York. Journal of the American Planning Association. 65(1) (1999), pp. 27-49. 10.1080/01944369908976032
19
P. Joice, Neighborhood Effects of Public Housing: How the Level of Public Housing Concentration Influences Neighborhood Crime Levels (MPA/MPP Capstone Projects 169), University of Kentucky, 2007.
20
A.M. Santiago, G.C. Galster, and P. Tatian, Assessing the property value impacts of the dispersed subsidy housing program in Denver. Journal of Policy Analysis and Management. 20(1) (2001), pp. 65-88. 10.1002/1520-6688(200124)20:1<65::AID-PAM1004>3.0.CO;2-U
21
G.C. Galster, P. Tatian, and R. Smith, The impact of neighbors who use Section 8 certificates on property values. Housing Policy Debate. 10(4) (1999), pp. 879-917. 10.1080/10511482.1999.9521354
22
J. Koschinsky, Spatial heterogeneity in spillover effects of assisted and unassisted rental housing. Journal of Urban Affairs. 31(3) (2009), pp. 319-347. 10.1111/j.1467-9906.2009.00462.x
23
A. Woo, K. Joh, and S. Van Zandt, Impacts of the low-income housing tax credit program on neighborhood housing turnover. Urban Affairs Review. 52(2) (2016), pp. 247-279. 10.1177/1078087414561824
24
I.G. Ellen and I. Voicu, The impact of low income housing tax credit housing on surrounding neighborhoods: Evidence from New York city (Working Paper 07-02), Furman Center for Real Estate & Urban Policy, New York University, 2007.
25
M.D. Eriksen and S.S. Rosenthal, Crowd out effects of place-based subsidized rental housing: New evidence from the LIHTC program. Journal of Public Economics. 94(11-12) (2010), pp. 953-966. 10.1016/j.jpubeco.2010.07.002
26
R. Ezzet-Lofstrom and J. Murdoch, The effect of Low Income Housing Tax Credit units on residential property values in Dallas County. Williams Review. 1(1) (2006), pp. 107-124.
27
T. Sinai and J. Waldfogel, Do low-income housing subsidies increase the occupied housing stock?. Journal of Public Economics. 89(11-12) (2005), pp. 2137-2164. 10.1016/j.jpubeco.2004.06.015
28
J.-H. Moon, K.-C. Seo, and S.-H. Lee, A study of the influence of public housing on the land price of community. Journal of Korea Planning Association. 40(4) (2006), pp. 103-115.
29
J. Kim and M. Choi, External effects of public housing on neighborhood housing prices in Seoul: An application of multi-level hedonic price model with social mix types included. Journal of Korea Planning Association. 44(1) (2009), pp. 101-112.
30
K. Park and H. Kim, A study on the negative external effect of public rental apartment. Journal of the Korea Real Estate Analysts Association. 15(3) (2009), pp. 127-147.
31
J. Kim, Analysis on the effect of public housing complex's location conditions on the neighborhood apartment prices in Daegu. The Korea Spatial Planning Review. 79 (2013), pp. 23-32.
32
R. Halvorsen and R. Palmquist, The interpretation of dummy variables in semilogarithmic equations. American economic review. 70(3) (1980), pp. 474-475.
33
C.A. Perry, The neighbourhood unit. Neighbourhood and community planning. Regional survey volume VII, Committee on Regional Plan of New York and Its Environs (eds) 1929 Committee on Regional Plan of New York and Its Environs: New York, Vol. Monograph 1, pp. 20-141.
34
Ministry of Land Infrastructure and Transport (MOLIT), Ga-Jwa Happy House: A White Paper; Ministry of Land, Infrastructure and Transport. 2018, Sejong, South Korea.
35
Seoul Housing & Communities Corporation, Daenong-Sinan Move-In Guide Book. 2018, Seoul, South Korea.
36
Seoul O-ryu Happy House [Online], 2019. Available at: https://www.sedaily.com/NewsVIew/1VQYM34QJH [Accessed 30/01/2022].
37
H. White, A heteroskedasticity-consistent covariance matrix estimator and direct test for heteroskedasticity. Econometrica. 48(4) (1980), pp. 817-838. 10.2307/1912934
38
Y. Choi and Y.-K. Kong, The influence of expectations of reconstruction in the future on price of the multi-family attached house. Journal of Korea Planning Association. 38(4) (2003), pp. 103-113.
39
J. Frew and G.D. Judd, Estimating the value of apartment buildings. Journal of Real Estate Research. 25(1) (2003), pp. 77-86. 10.1080/10835547.2003.12091101
40
S.-H. Kim and H.-S. Lee, An analysis on the change of apartment prices according to reconstruction expectation: in case of building age and floor area ratio. Journal of Korea Planning Association. 40(3) (2005), pp. 67-78.
41
C.-C. Lee, C.-M. Liang, and C.-Y. Chen, The impact of urban renewal on neighborhood housing prices in Taipei: an application of the difference-in-difference method. Journal of Housing the Built Environment. 32(3) (2017), pp. 407-428. 10.1007/s10901-016-9518-1
42
H.-S. Lee, An analysis of real estate market structure considering interrelationship between space and capital markets. Journal of the Korea Real Estate Analysts Association. 7(1) (2007), pp. 17-31.
43
S.-K. Lee and W.-J. Shin, The effect of reconstruction probability on apartment price. Journal of Korea Planning Association. 36(5) (2001), pp. 101-110.
44
B.S. Lee, E.-C. Chung, and Y.H. Kim, Dwelling age, redevelopment, and housing prices: the case of apartment complexes in Seoul. The Journal of Real Estate Finance and Economics. 30(1) (2005), pp. 55-80. 10.1007/s11146-004-4831-y
45
L. Freeman and W. Rohe, Subsidized housing and neighborhood racial transition: an empirical investigation. Housing Policy Debate. 11(1) (2000), pp. 67-89. 10.1080/10511482.2000.9521363
46
J. Jacobs, The Death and Life of Great American Cities. 1993, New York, NY: Vintage Books.
Information
  • Publisher :Sustainable Building Research Center (ERC) Innovative Durable Building and Infrastructure Research Center
  • Publisher(Ko) :건설구조물 내구성혁신 연구센터
  • Journal Title :International Journal of Sustainable Building Technology and Urban Development
  • Volume : 13
  • No :4
  • Pages :398-413
  • Received Date :2022. 08. 12
  • Accepted Date : 2022. 11. 17
  • DOI :https://doi.org/10.22712/susb.20220030
Journal Informaiton International Journal of Sustainable Building Technology and Urban Development International Journal of Sustainable Building Technology and Urban Development
Online Submission
  • scopus
  • NRF
  • KOFST
  • KISTI Current Status
  • KISTI Cited-by
  • crosscheck
  • orcid
  • open access
  • ccl
Journal Informaiton Journal Informaiton - close