Identifying and comparing vacant housing determinants across South Korean cities

Abstract

Excessive vacant housing (VH) has been often linked to negative externalities (e.g., crime, arson, property devaluation, or disconnected neighborhoods). As a result, governments and communities invest many resources toward limiting amounts of VH. While the VH literature has increased, VH studies are relatively new in South Korea. In this regard, this study explores the spatial discrepancy and determinants of VH across 141 cities in South Korea by using cluster analysis and quantile regression. The empirical analyses suggest that municipalities experiencing aging, fewer manufacturing jobs, sprawled old and small housing stock, new housing supply, and higher taxes may be more at risk for future increases in VH ratios. The impacts of these factors were not significant across the municipalities with different levels of VH. The aging population is the most powerful explanatory variable, in general, and is the only influential factor that explains the cities with excessive VH ratio. The outcomes suggest that the policy interventions should vary depending on the level of VH and the location and size of the city their related determinants. Further, VH inventory and demographic change monitorization, provisions for encouraging more youthful residents, and readjustment of space and economic structure are also necessary to combat excessive VH.