Land Use Controls and Housing Prices in Korea

This paper analyses the effects of government controls over land supply on housing in the rapidly growing cities of Korea. Whilst Korea's urban population more than doubled in the period 1973-88, urban land for residential use grew by only 65 per cent. The result has been extremely rapid rises in city residential land values, although the more dense use of residential land has offset some of this rise on house prices. A substantial part of the rise in house prices has resulted from the government's tendency to underallocate land to urban residential use, although part of the government's surplus is used to subsidise low-income housing within the same projects.