The Government Promised 1.19 Million Public Homes — But the Housing Fund Has Shrunk by Two-Thirds

1.19 million homes. That's the number the South Korean government has pledged to build as public housing. It sounds enormous — and it is. But look at what's supposed to pay for it, and the picture gets complicated. The fund backing this promise has lost more than two-thirds of its reserves in just six years.

What Is the Housing and Urban Fund?

If you've ever held a Korean housing subscription account (청약통장, *cheongyak* account), the monthly deposits you make don't just sit there — they flow into the Housing and Urban Fund (주택도시기금). Think of it as a big public piggy bank. The government pools those contributions to do three things: ① build public housing, ② provide low-interest rental deposit loans (전세자금 대출), and ③ pay housing subsidies to lower-income households. The more people save in subscription accounts, the larger the fund grows.

Why Did It Shrink So Fast?

Three forces hit at once. First, fewer people are keeping their subscription accounts. As home prices surged, winning the lottery-style housing subscription became harder. Many people decided to just buy on the open market instead — and closed their accounts. As of August this year, subscriber numbers are still falling. Second, the property market slowdown. With fewer home sales and a sluggish pre-sale market, demand for mortgages through the Korea Housing Finance Corporation (the public lender) shifted, denting the fund's investment returns. Third, spending went up. Expanded rental deposit loans, emergency support for victims of rental fraud, and rising housing subsidy payouts all pushed outflows higher. Less coming in, more going out — the balance evaporated quickly.

Can the Government Actually Deliver 1.19 Million Homes?

Building a single unit of public housing — from land acquisition to construction — costs hundreds of millions of won. At 1.19 million units, the total tab runs into the hundreds of trillions. With only ₩14 trillion in reserve, the fund can't cover that alone without major additional budget support. If supply gets delayed, fewer new homes enter the market — and that reduces downward pressure on prices (the forces that push prices lower). On the other hand, if the government pumps in extra funds and pushes ahead, some local markets could see a sharp shift in supply and demand dynamics.