Logical arguments don’t work

Deoham

Deoham is a social innovation startup in Korea that approaches housing problems in a different way. As the first social housing developer in Korea, Deoham develops social housing owned and run by co-operatives.

Bottom Line

The housing co-operatives founded together by Deoham and future residents  are designing and building a good quality of affordable housing.

  • Based on the collective decisions made by the co-operative members, the residents of social housing and Deoham, the profit earned through the housing development would be invested back to their communities.
  • Deoham also expects residents to rebuild new community relationships with more experimental co-design community programs.
  • Deoham expects that the residents could start their social businesses in these estates depending on what common social services are in demand. The new housing could not only provide dwelling but become a living lab for various social business startup.
  • Numerous local governments are showing a keen interest in how this model could help their housing and local job creation problems together. The similar models could be designed and tried in different areas and could spread nationwide.

Why it matters?


Affordable social housing and community rebuilding

When the Korean government introduced the new social housing policy allowing private developers to develop social housing with government subsidy, Deoham put forward them as an “ethical” housing developer.

  • Deoham set up new housing co-operatives called “We Stay” which build, own and maintain rental housing for the long-term. As the main contractor with the government, Deoham received the land and financial support, and it called for people to found a housing co-operative together.
  • People who want to live and co-own some shares of a house, they need to become a member of this social co-operative. The Housing and Urban Fund of the Ministry of Land, Infrastructure, and Transport, which provides a direct loan (around 90~96% of construction cost) to build rental housing is also the member of these co-operatives.
  • The residential members pay their deposit to become a co-operative member (would cover the rest 4~10% of building cost), and their rental prices would be determined based on their deposits. The more they put the deposit, the less their rental price would become.
  • After eight years of the compulsory rental period, the co-operative members will collectively decide whether the co-operative continues to keep their houses as affordable rental houses for a more extended period, or the residents would purchase their homes in reasonable prices to be also determined collectively by the co-operative members .

Insufficient comfortable and affordable housing supply

The Korean housing problem is one of the biggest social issues calling an urgent and radically different way to tackle it. However, the Korean government solution to this issue has not been great and especially their strategy in providing comfortable and affordable social housing.

  • The social housing supply rate in Korea reaches only 6.3%, which is much lower than 9%, the average supply rate of the OECD 36 member countries.
  • Moreover, lot of social housing residents have been complaining the house quality and their increasing distress caused by the neighbourhood segregation culture.

Social housing provided by private developers

To tackle this situation, the previous Korea government introduced the new social housing program called New Stay in 2015.

  • It allowed private property developers to develop social housing on the land and financial support provided by the government. The private developers must build and own these housing as social houses for the first eight years with affordable rental prices, however they could sell these houses at the market values after eight years.
  • This policy has been criticised for its failure of supplying affordable and sound quality of housing in the long term and creating the opportunity to private developers to develop another expensive housing with special subsidy.

What’s happening?

  • Deoham found two social co-operatives that have been developing two new social housing estates at the Seoul Metropolitan area, which will provide around 1,000 houses in total. The apartment building work started in 2018, and it will complete in early 2020.
  • The housing rental prices are about 65~80% of market values in the same area, and the estates provide public spaces three times more than the average public spaces in other estates.
  • Deoham built the showcase houses at the central Seoul and encouraged future residents to get together at these houses to discuss and share their plans. The co-operative members have spaces and opportunities to build community relationships well before they move into new homes.

Go deeper

Deoham homepage: http://deoham.co.kr/