ARTICLE IN PRESS

Habitat International 31 (2007) 116129

www.elsevier.com/locate/habitatint

Housing regeneration and building sustainable low-income

communities in Korea
Seong-Kyu Ha
Department of Urban and Regional Planning, Chung-Ang University, 304 Shingu Villa, 551-19 Banpo 4 Dong,
Seochogu, Seoul 137-807, Korea

Abstract
Housing regeneration in Korea has focused on improving physical deterioration and maximizing landlord prots rather
than on strengthening the social capital of low-income neighborhoods. Much less attention has been given to community
capital, particularly social capital. This paper examines the characteristics of low-income communities and housing
regeneration projects, and sustainable low-income communities in terms of community capital. There is no doubt that
housing regeneration projects have contributed to a housing stock increase. The survey evidence demonstrates that housing
regeneration projects demolished the slums where low-income families are concentrated, thereby isolating and
marginalizing the displaced residents. The market approach of residential redevelopment schemes can be characterized
as a landlord-initiated gentrication process. Applying the concept of sustainable development to low-income communities
in urban Korea requires mobilizing residents and their governments to strengthen economic capital and preserve social and
cultural capital.
r 2006 Elsevier Ltd. All rights reserved.
Keywords: Housing regeneration; Low-income community; Sustainable development; Community capital; Korea

Introduction
The economic growth of Korea has often been referred to as an economic miracle.1 But, as is well known,
economic growth alone is not sufcient to eradicate poverty, particularly housing poverty. Indeed, economic
growth tends to widen the gap between rich and poor, thereby increasing relative poverty, and even in some
cases, worsening the position of the poorest in absolute terms.
Rapid economic development in Korea during the 1960s and 1970s, which was largely city-centered, was
accompanied by an enormous wave of rural/urban migration. There were many squatter settlements in urban
areas. The proportion of the population living in slums and squatter settlements varied from city to city, but
gures of 2030% were common in the 1960s and 1970s. Substandard housing has been most prevalent in Seoul.
According to the 2000 census, nearly a quarter of all households (23.4%) lived in accommodation that did not
Tel.: 82 2 535 3068; fax: 82 31 675 1381.
1

E-mail addresses: ha1234@cau.ac.kr, skha47@hanmail.net (S.-K. Ha).

In 1960, annual per capita GNP in Korea was US$69. By 2004, this gure had increased to US$ 14,162.

0197-3975/$ - see front matter r 2006 Elsevier Ltd. All rights reserved.
doi:10.1016/j.habitatint.2006.08.002

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meet minimum standards in terms of oor space and basic facilities.2 An important phenomenon that has
emerged is the increasing polarization in the housing conditions between the upper and lower economic classes.
Substandard urban settlements are an inevitable by-product of the rapid urbanization and industrialization
that has occurred in Korea during the last four decades. These settlements are usually seen as a negative side
effect of modernization. These settlements represent urban housing, welfare, and infrastructure system
failures, and are met by demands for city beautication or the elimination of unproductive social elements.
Housing regeneration in Korea has focused on improving physical deterioration and maximizing landlord
prots rather than on strengthening the social capital of low-income neighborhoods. Much less attention has
been given to the human, social, and cultural forms of capital. The housing regeneration projects in
substandard settlements, particularly joint redevelopment projects (JRP), are intended to make prots for
developers and speculators rather than assist the original low-income residents (particularly tenants) with their
housing welfare. As a result, this housing has primarily, beneted middle-income groups.
Applying the concept of sustainable development to low-income communities in urban Korea requires
mobilizing residents and their governments to strengthen all forms of community capital. This sustainability
framework also includes strengthening economic capital, multiplying social capital and enhancing cultural
capital. For a nation in which community spirit is a growing concept, the principle of building a communityoriented living environment for future generations bears great signicance.
The purpose of this paper is twofold: rst, to examine the characteristics of low-income communities and
housing regeneration projects, and second, to explore sustainable low-income communities in terms of
community capital. Sustainable community development in the Korean context implies the need to address
not only the hard urban environmental issues but also the soft issues such as social capital.

Low-income communities and housing regeneration in urban Korea

Low-income community and housing situation
In this paper, community is dened to be the sense of identity that at least some of the residents of a given
area maintain through cooperation and intentional action. This denition considers community to be an
intentional neighborhood that has a residential area as part of its sense of identity. It distinguishes a local
community from local complexes of public and private services resulting from urban planning and
administered by local government.
Community has been variously dened in the social sciences, but a through comparison of the denitions,
show three common points of agreement: a sense of identity, cooperation, and residence in a common locality.
The weakest binding force among these characteristics is the locality (Hillery, 1968). On this basis, it would be
misleading to consider local community to be a territorial unit. Space has become relatively less important in
all aspects of community (Brooks, 1974, p. 198). The declining importance of space as a central concept in the
understanding of urban communities does not mean that space is still not an important factor in community
or urban analysis. However, space may often not be the major independent variable of the presumed virtues of
the small community or the problems of the large ones.
Low-income residential areas (or substandard housing areas) in urban Korea are usually highly stable
communities, composed of kinship and peer group systems originating from common village or provincial
backgrounds. Kinship ties, especially among the in-migrants, play a strong role in the lives of squatters, both
in terms of their initial choice of settlement and in terms of the communal organization that develops within
those settlements. Squatters are rarely insolated individuals; in fact, most migrant squatters from the poorer
provinces migrated to Seoul in family groups (Brandt, 1982). These ndings refute the common assumption
that squatters are socially and morally adrift.
2
The housing minimum standard set by the Korean government is based on three factors: rst, minimum oor space (adequate space
and privacy; for example, the dwelling oor space area for a household of four persons must exceed 37 m2); second, facilities (provision of
basic services, any housing lacking basic services and facilities, such as running water, electricity or a sewer system, is judged to be below
standard); and third, structure and environment (housing with poorly built structures such as tents, communal huts, and barracks using
inadequate building materials are also judged to be below standard).

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S.-K. Ha / Habitat International 31 (2007) 116129

Table 1
Housing situation and service levels (19802000)
Characteristics
Housing stock vs. households ratio (%)
South Korea
Seoul
Ownership of dwelling (%)
South Korea
Seoul
Average size of dwellings (m2)
Per capita oor area (m2)
Persons per room
Households per housing unit
Modern kitchen (%)
Flush toilet (%)
Electricity (%)
Hot water (%)
Piped water (%)
Urbanization ratio (%)

1980

1990

2000

71.2
55.9

72.4
57.7

96.2
77.4

58.6
44.5
68.3
10.2
2.2
1.5
18.2
18.4
98.0
22.1
51.2
60.0

49.9
38.0
80.5
13.8
1.5
1.6
52.4
51.3
100.0
34.1
76.6
78.9

54.2
40.9
81.5
20.2
0.9
1.3
94.3
87.0
100.0
87.4
89.0
87.4

Source: Economic Planning Board, Population and Housing Census Report, 19701990, Seoul, EPB; KNHC, (2002), yearbook of Housing
Statistics, Seoul; Korea National Statistical Ofce (2001), Population and Housing Census, Seoul, Seoul.

In urban areas, the maze of narrow alleys lined by single- or two-storey houses, which characterized the old
hotchpotch residential areas, was interrupted by a group of matchbox-shaped giant blocks through urban
regeneration projects. However, housing plays a pivotal role in the overall regeneration process in urban areas.
In this context the role of housing in regeneration can be perceived as being one element within the myriad of
policy interventions including transport, planning, employment, training and education.
The overall quality of the housing has increased substantially since the 1980s. As shown in Table 1, the
sustained economic growth since the 1970s has been accompanied by improved housing quality. Per capita
oor space increased rapidly, while the proportion of dwellings equipped with modern kitchens and ush
toilets steadily increased.
One of crucial housing problems is the increasing polarization between the housing conditions of the lower
and upper economic classes. The most common concern expressed in the popular press is that of increasing
housing prices and rents. This raises the difcult question of the distribution or incidence of such increase: who
suffers and who now has a problem in affording housing?
Despite many measures to improve housing quality over the past several decades, housing has remained a
persistent and divisive social issue in Koreaeven before the International Monetary Fund (IMF) crisis
period.3 Prior to the crisis, this divisiveness arose because the inequitable distribution of housing became even
more prominent as overall prosperity increased. After the crisis, the poor have suffered more than other group
(Ha and Lee, 2001). In the wake of Koreas IMF crisis, and of a housing crisis that has persisted for years, the
roles of the public and private sectors in housing should be clearly differentiated.
Housing regeneration
It is necessary to explore the governments regeneration polices towards the substandard urban settlements
in more depth. The most important question is: who has beneted directly from the housing regeneration?
3
Korean economic growth stagnated and an International Monetary Fund bailout was required in 1997. The impact of the crisis on the
economy was severe. The won has depreciated dramatically. Many workers lost their jobs and the number of homeless increased. The
standard of living has declined substantially and the situation portends a more difcult life for the majority of the population for years to
come. The economic contraction has affected the lives of the poor in many areas: falling incomes, rising absolute poverty and malnutrition,
declining public services, threats to educational and health status, increased pressure on women, and social tension.

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The term regeneration implies a much broader concept than the essentially property-led approaches of the
past, embracing as it does not only the physical regeneration of an area but also its ownership and
management and the social and economic well-being of the people who live there. The involvement of local
communities and others with a legitimate interest in the area is an essential part of the process.
There are two categories of housing regeneration: redevelopment and improvement. Redevelopment is slum
clearance by the joint agreement between the corporation of landlords and the housing developer(s). Since the
early 1980s, a new method has been hailed as an innovative tool for housing redevelopment with the expansion
of new housing units in urban areas. This method is called Hapdong or JRP, which emphasizes a
privatepublic partnership for substandard area projects. This method was based on the concept that once a
renewal site was located and a major construction company (developer) agreed to participate in the project,
then a housing corporation representing residents (homeowners) for the selected site would be created to work
with both residents and the construction company. At any project site, the primary responsibility of the
housing corporation was to obtain the required two-thirds vote for approval from its members who were
residents in the area. Based on this initial approval, each member of the corporation was then provided with
the right to own an apartment unit. It was initially agreed that the construction company was allowed to build
more units than was required to house all available members of the area and that any excess units beyond the
total required were allocated to any buyers in the market. This arrangement was justied to allow reasonable
prots for the developers involved in the projects. By selling off the remaining units, the rms recovered their
renewal costs. Once the buildings and related facilities are built by the developer, it is sold to landlords in lots
and houses according to their original portion, and the remaining units are sold for compensation of the
development cost.
It is important to note that housing insecurity and serious human rights violations arise most frequently in
JRPs. The squattertenant households are forcibly removed. In many redevelopment project areas, groups of
thugs, sometimes in actions condoned by police ofcials, were brought in to demolish existing houses and evict
residents. However, the law does not protect renters who usually account for 60% of the population in
redevelopment areas and who are excluded from sharing the benets (Ha, 2001, p. 41). Since 1989, when the
government promised public rental housing to tenants on the redeveloped project sites, renters excluded from
subsidy (due to residency of less than three months) or those demanding on-site temporary housing, have
undergone forcible eviction. There is scant provision for public rental housing in the same neighborhood,
mainly due to the governments nancial difculties and opposition from the housing corporation.
The second type of housing regeneration scheme is the improvement of the residential environment, created
in 1989, which is designated in an area where there is urgent need of residential improvement. The aim of this
program is to address the intensifying conict between homeowners and tenants that JRP generated. It
became necessary for the government to create another way to shelter low-income families instead of moving
them to lots or housing located in isolated sites far away from the city. This program is designed to enhance
shelter for the poor without displacing them. It requires the local government to provide the infrastructure for
new or rehabilitated residences, and it species that housing can be rehabilitated by residents, local
governments, or the Korean National Housing Corporation (KNHC).
Under the programs individual improvement scheme, residents rehabilitate their housing, such as self-help
housing in the 1970s, but the government relaxes the building codes and provides affordable loans. The
resident upgrading alternative places residents in charge. However, they may lack the skills and technology,
money, and experience necessary to manage home improvement. Under the second alternative, improvement
applies to an entire district and requires the consent of two-thirds of more of the landowners and homeowners
and one-half or more tenant households. Distributional problems have arisen under this program (Thomas
and Hwang, 2002).
There is no doubt that housing regeneration has contributed to a housing stock increase. As shown in
Table 2, the number of redeveloped housing units is almost twice the number of total units before
regeneration. Also the average oor area in newly developed units is almost triple the average of the old units.
In the JRP district, the predominant housing type is high-rise at accommodations: the average size of the
units is 118 m2. It means that the average oor space per household in the redeveloped area is higher than that
of nation as a whole (81.5 m2). In terms of quality and size of the units, particularly housing redevelopment,
the new housing units for middle-class households in the JRP can be considered as a gentrication process

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Table 2
Housing regeneration in Korea (as of December, 2003)
No. of districts
1. Housing redevelopment projects
Completed
304
In process
77
Waiting
35
Total
416

2. Housing improvement projects

Completed
In process
Waiting
Total

Area (100 m2)

Demolition (units)

New construction (units)

12,503
4,377
1.099
17,979

102,467
39.766
7,467
149,700

217.315
75,738

293.053

No. of districts

No. of housing units

196
593
17
806

36,549
165,259
3,508
205,316

Source: Korea National Housing Corporation (2005: pp. 296297).

Table 3
Change of property value before and after redevelopment
Unit: won
Name of estate
d

Bongcheon (Byucksans )
Gongduckd (Samsung Remianc)

Before (A) price per Pyeonga

After (B) price per Pyeong

Annual increase

6,200,000
5,000,000

10,000,000
15,000,000

10.2% (Oct. 1988Dec. 2004)

22.2% (July 1995Aug. 2004)e

1 Pyeong is equivalent to approximately 3.3 m2.

Bongcheon Dong is located in the southern part of Han river, Kwanakgu, Seoul.
c
Gongduck Dong redeveloped area is in the Mapogu, Seoul.
d
The size of apartment is 85 m2 in both areas (Bongcheon and Gongduck).
e
1 US $ is equivalent to 1200 won at the beginning of 2004.
b

(Lee et al., 2003). The survey evidence demonstrates that the average income in JRP housing is much higher
than that of the typical urban wage earners household. They belong to the middle-income group in Seoul
(Ha, 1995).
Since the mid-1980s, the number of shantytowns has decreased substantially through various redevelopment
projects, but some poor people have tried to squat in a new type of low-income settlement, known as a vinyl
house village in the Seoul metropolitan region. However, many middle- and high-income people were
encouraged to look for real estate in substandard housing areas, mainly for investment purposes. The number
of absentee landlords began to increase and in some areas reached around 60% (Kim and Ha, 1998).
As shown in Table 3, the annual housing price increase in the Gongduck area is extremely high (22.2%)
compared to the consumer price index. This helps house builders enjoy large prots through housing
regeneration projects. The Samsungs redeveloped area of Gongduck has a more convenient location in terms
of accessibility to public services than the Bongchon area. And as a developer and large house builder,
Samsung is a large developer and house builder that belongs to conglomerates or diversied business groups
called the jaebol in Korea. Almost all large Korean housebuilders (construction companies) belong to the
jaebol and siphoning capital into and out of construction has become a common practice in Korea. Siphoning
often occurs to land purchases and housing redevelopment in urban areas (Yoon, 1994).
The interests of white-collar workers, looking for housing near city centers; the interests of the government,
centered on macroeconomic concerns and the high output of housing; the interest of property owners (mostly
absentee landowners), capital gains; and the interest of construction rms, making prots maximization, have
converged and have led to housing regeneration projects since the early 1980s.

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Stage 1

Illegal
occupation or
Relocation
site for evictees

Stage 2

Stable squatter
community
but substandard

Stage 3

Designated
renewal area
Speculation

Stage 4

Demolition &
eviction
community
shattered

121

Stage 5

Middle income
community with
high property
value

Regeneration and displacement with rising property values

Fig. 1. Neighborhood change continuum in the poor community.

Displacement of community
In this study, an investigation of squatter settlements and redeveloped areas was carried out by means of
interviews with residents and eld surveys between October 2000 and September 2001. The case study areas
selected were three typical squatter areas in Seoul: Kuryung, Jeonwon and Hwawhe.4 In addition, the
Bongcheon District in Seoul, was chosen because it is relatively large and represented an area where a housing
renewal project was completed recently where landlords and tenants are present.5
How have the low-income communities changed through the JRP during the past three decades in Seoul?
Who are the persons moving into gentrifying neighborhoods? The pieces of this jigsaw puzzle are a bit ragged,
but the picture of gentrication-caused displacement that emerges is quite clear. Fig. 1 illustrates the
neighborhood change continuum in poor communities.
Stage 1
Rapid economic development in Korea during the 1960s and 1970s, which was largely Seoul-centered, was
accompanied by an enormous wave of migration from rural areas to the metropolis. The rapid growth of new
substandard housing in a variety of forms was an attempt to bridge the gap between supply and demand. In
the very beginning, squatters constructed their own houses without the consent of the city government. All
housing materials were of low quality and development was totally unplanned.
Since the mid-1960s there have been many small and large-scale relocation programs. The households in
squatter settlements and unplanned housing areas in the inner city have been relocated to peripheral areas.
Between 1962 and 1970, about 40,000 low-income households were relocated to 20 new areas not planned
residential uses such as hillside and quasi-agricultural areas.
In most squatter neighborhoods, particularly those on hillsides or far from central cities, there is often
no piped water or well organized system of removing garbage and human waste. In many large Korean cities,
the urban center lies in a basin surrounded by valleys or mountains, which provides land suitable for squatter
and unplanned housing areas. They are near the urban fringe and within an hours journey on foot from
the center.
Stage 2
Most of the residents in squatter settlements in relatively stable and tranquil areas have been there for many
years. They made continuous, gradual improvements to their shacks. These substandard residential areas are
usually stable communities, composed of kinship and peer group systems originating from common provincial
or village backgrounds. Kinship ties, especially among the in-migrants, play a strong role in the lives of
squatters, both in terms of their initial choice of settlement and in terms of the communal organization that
develops within those settlements.
4

Systematic sampling was used to choose the households to be interviewed and the number of interviews in three study areas was 250.
It was one of the largest squatter settlements in Seoul, occupied by more than 4000 households. This area has been changing its
character, as a result of housing renewal projects. The number of households surveyed was 293 (140 for owners and 153 for tenants).
5

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Stage 3
The city government designates residential redevelopment districts by a eld survey of substandard housing
areas. After that, the owners in a redevelopment site organize a corporation for redevelopment and select a
construction company as a partner. At this stage many speculators and real estate agents try to purchase
substandard houses to make prots.
When a contract is made, 7080% of the homeowners are likely to be real-estate investors or speculators.
They receive a ticket which entitles them to buy one the new apartments that are to be constructed. The
remaining 2030% of the homeowners are the original (urban poor) residents.
Stage 4
Redevelopment means demolishing 1 or 2 storey homes in areas where the urban poor are concentrated.
Urban poor communities, which are 20 to 30 years old, are destroyed. The illegality of squatter settlements
even if they have been there many yearsis a convenient excuse to bulldoze them with no compensation paid
to former inhabitants. In the JRP areas, most evictions are of renters who refuse to move out of the areas.
A legal reason for renter resistance leading to evictions is that the laws only provide for compensation of
property losses, but not compensation for loss of convenient location or informal communal support.
The residents have staged sit-in demonstrations and resisted physical removal and eviction. In order to
forcibly evict resisting tenants, the association and the construction company often hire an eviction agency.
The hired gangsters or thugs move into the districts and create an atmosphere of violence and fear by their
abusive language and threatening gestures.6
Stage 5
JRPs are prot-oriented and do not take into account the total urban system and tenants welfare, treating
housing as a commodity in the open market. Open market mechanisms do not take into account social welfare
and security. Landowners or developers can make very large prots from redevelopment projects. In the
Bongcheon redevelopment study area, the resettled ratio of squatter families (original residents) was 20.7%. It
indicates that the vast majority of residents in the redeveloped area were middle-income families.
This program depends upon project area residents to form a cooperative, a representative body, which then
contacts private developers in order to get renewal projects done. Developers handle most of the nancing,
and the governments provide relatively little support. The approved developer creates a development plan and
approaches local government for approval. If the government owns part or all of the land, it sells that land to
the developer. This program makes such efforts affordable for developers because it allows them to build with
higher oor-to-area ratios than would have been possible otherwise. Cooperative members receive capital
gains by selling their units or the right to buy units (Bae, 2001).
The gentrication process involves the purchasing of substandard houses by middle-income households or
by intermediaries such as speculators or developers, the upgrading of neighborhood and the enhancement of
the tax base. One can also identify a gentrication process in which the local government takes the initiative
through a major urban renewal project.
The two programs (JRP and improvement) listed for Korea are called housing renewal programs but focus
on rebuilding specic city sections, and so in that sense they are place-based regeneration programs. One
program that has been heavily used is the JRP, launched in 1983. In addition, possession of a house affords the
poor considerable economic security. Besides offering shelter, a house offers proximity to employment,
education, and culture, and can provide extra income in the form of rent, or form a base for cottage industry.
The majority of residents in the substandard housing area said that they lived in these areas primarily because
of cheap housing and affordable rent and kinship ties and friendly neighborhoods.
There are six kinds of residents (or households) by tenure type after the completion of the JRP (Table 3).
The A group had lived in the substandard settlements as an owneroccupier resettled after the redevelopment
project. They were all former squatters or original residents in the substandard area. The owners C groups of
households never lived before in the renewal project and were new comers as owneroccupiers. Tenants
are also classied into two groups; Tenant B group had lived in the substandard area and resettled after
the project; Tenant D group households had not lived in the project area and moved in after the project.
6

Even by the present redevelopment law, it is illegal to demolish a house if someone is physically present in it, is living in it, or there is
furniture in it. All of these restrictions have been ignored.

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Table 4
Households by tenure type after JRP

Households who lived in the area before renewal project

Households who never lived in the area before renewal project
Households who moved out from the JRP area

Owner occupied

Tenants

Owner A
Owner C
Owner X

Tenant B
Tenant D
Tenant Y

The owner X and tenant Y group of households moved out from the project area both voluntary and
involuntarily. The involuntarily movers were mostly forced evictees (tenant Y group of households) who were
poor tenants in slum areas.
A housing renewal project is successful if many original residents remain in the redeveloped area even after
the completion of the project. But in reality, the rehousing ratio of original residents is very low and most of
them move out to other areas where housing costs are lower. Although the original intention of the
partnership between homeowners and construction companies was indeed noble, it was estimated that less
than 20% of the original residents were able to purchase an apartment unit that they identied as their dream
home (Ha, 2004, pp. 126127).
Due to the lack of affordability, original residents (owner X group of households) sold out their right of
rehousing to others who could afford it. This is the result of a housing policy that emphasizes housing stock
increases rather than the housing welfare of its residents by expecting trickle down effects. In addition, for
the tenant Y group of households, the JRPs led to further deterioration of the housing situation and provided
a new environment to build other slums and squatter settlements. With respect to the gentrication process in
JRPs, owner C group of people are inmovers to gentrifying neighborhoods (Table 4).
Strengthening community capital for sustainable communities
Sustainable development and community capital
A growing body of literature has attempted to approach urban sustainability, in terms of the social,
economic and environmental development of cities (Burgess, Carmona, & Kolstee, 1997; Choguill, 1996;
Marcotullio, 2001). Many people use the term sustainable development to simply mean either environmental
protection or else sustained economic development growth. Sustainable development should be more than
merely protecting the environment. It requires economic and social change to improve human well-being
while reducing the need of environmental protection. Social sustainability is another way of discussing social
capital. It requires social equity and responsible citizenship. Socially sustainable community members are able
to provide adequate and appropriate shelter for themselves; enjoy a sense of belonging; be assured of mutual
social support from their community; enjoy freedom from fear, and security of person; and participate actively
in civic affairs (BCRTE, 1993).
In most studies on sustainability, locality is important and local problems require locally generated,
particular solutions. The new, emerging role of government is seen acting as a facilitator rather than merely a
provider. Choguill (1996) noted that
In this manner, through the use of locally generated solutions, the active involvement of residents in their
own affairs and a facilitating government, it would be expected that a basis would be laid for the successful
carrying out of local community improvements.
In order to use locally generated solutions, the community capital, and particularly social capital is
the foundation for sustainable community development. The community capital approach to sustainable
community development requires new thinking about broad questions of community sustainability and
self-reliance (Roseland, 2005). Mobilizing residents and their governments to strengthen all forms of
community capital is required to apply the concept of sustainable development to low-income communities in

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Korea. Community mobilization is necessary to coordinate, balance and catalyze community capital. This
section focuses on how to mobilize residents in low-income communities and their communities to achieve
this goal.
Physical, economic and human capital
Physical capital is sometimes referred to as produced capital, manufactured capital or public capital.
Physical capital is the stock of material resources such as equipment, building machinery and other
infrastructure that can be used to produce a ow of future income.
As mentioned already, there were many squatter settlements in Korea. The most traditional squatter
settlements were Daldongne or Sandongnaes, which were constructed during the 1950s and 1960s in small
mountain and hillside portions of urban areas, particularly in Seoul. Daldongne literally means moon village
and Sandongne are the villages on hillsides or small mountains in Seoul. Squatters constructed their own
houses without the consent of the city government. All housing materials were of low quality and development
was totally unplanned.
Since the early 1980s, poor housing conditions, exemplied by physical deterioration, lack of facilities and
security, and overcrowding, have been associated with three kinds of new settlements: Binilhaus, Beoljip and
Jjogbang. A Binilhaus (vinyl house) is constructed with thin wood board layers and vinyl covering on the
outside. Most Binilhaus occupants are poor tenants who have been forcibly evicted from housing renewal
areas. Binilhaus squatters simply settle in vacant hillside areas or public open spaces without any rights of land
ownership and building permits. A stream of evictees started to build so-called vinyl houses on privately
owned land. Beoljip refers to various kinds of basement or attic residences in low-income housing areas. Most
of the Beoljip residents were low-income, unskilled laborers who were employed at nearby manufacturing
companies. This kind of housing was mostly located near industrial zones or factory districts. Jjogbang is a
new type of rental accommodation with a daily pay system for the lowest income groups and homeless. Since
the IMF crisis, Jjogbang has emerged an alternative shelter for the unemployed and the urban poor. It is clear
that in Korea, particularly in urban areas, housing needs include low-income rental housing, Jjogbang,
Binilhaus, and various squatter settlements.
In substandard settlements, physical capital is very poor, which is an objective of redevelopment or
upgrading. Those living below the poverty line almost invariably suffer from insecure and over-crowded
housing, inadequate access to water and sanitation, and environmentally hazardous living conditions. The
improvement of the physical capital in substandard settlements in Korea should focus on community assets
such as public facilities; school and health centers; water and sanitation; efcient transportation; quality
housing; and adequate infrastructure.
Economic capital refers to the ways we allocate resources and make decisions about our material lives
(Roseland, 2005). Economic capital should be maintained in order for people to live off the interest, or
income. Strengthening economic capital means focusing on: making more with less-maximizing use of existing
resources; making things ourselvesreplacing imports; making somewhat newcreating new product;
trading fairly with others; and developing community nancial institutions.
Street hawkers and informal sector traders are among the strongest visual images of urban areas in Korea.
Their activities provide the principal source of income of many of those living in poverty in cities. Their
position is often fragile, dependent not only on the uncertainties of passing trade but also vulnerable to the
exploitative behavior of those with power to enforce oppressive regulations.
The most popular job of household heads is daily construction where unskilled laborers can get a job easily.
The analysis of the occupational status of household heads indicates that the proportion of unemployment is
very high and the majority are unskilled and manual workers (Table 5). In substandard housing areas, the
informal sector is crucial as a survival strategy for the urban poor. The urban informal sector could be seen
here as an answer or solution to the failure of the trickle down growth strategies. The urban informal sector
has been able to generate employment for those people with few skills, since it used technologies, which were
appropriate and labor-intensive. When considering the economic capital in substandard settlements, one of
the main assets is labor. The potential contribution of city government in relation to labor relates both to
promoting economic and industrial growth and to enabling the development of small and medium enterprise.

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Table 5
Employment status of household head in squatter settlements
Occupation

Respondent (%)

Manufacturing
Clerk
Salesman
Daily construction workers
Self-employed
Unemployed
Othersa
Total

3(2.2)
2(2.2)
23(16.5)
39(28.1)
23(16.5)
34(24.5)
14(10.1)
139(100.0)

Including hawkers, cart pullers and the difcult-to-classify positions.

Table 6
Educational attainment of household heads
Education level

Household heads (%)

No education
Primary school
Middle school
High school
Junior college and more
Total

64(17.0)
118(31.4)
106(28.2)
74(19.7)
14(3.7)
376(100.0)

This involves both providing an appropriate and supportive environment and ensuring that essential
infrastructure is provided.
The best-known application of the idea of human capital in economics is that of Mincer and Becker of
the Chicago School. In this view, human capital is similar to physical means of production, e.g., factories
and machines: one can invest in human capital (via education, training, medical treatment) and ones income
depends partly on the rate of return on the human capital one owns (Becker, 1964). Thus, human capital is a
stock of assets one owns, which allows one to receive a ow of income, which is like interest earned. Human
capital is substitutable: it will not replace land, labor, or capital totally, but it can be substituted for them to
various degrees and be included as a separate variable in a production function.
Modern labor economics has criticized the simple Chicago-school theory that tries to explain all differences
in wages and salaries in terms of human capital. The concept of human capital can be innitely elastic,
including unmeasureable variables such as personal character or connections with insiders (via family or
fraternity). This allows the theory to be tautologically true without explaining anything. Others point to the
existence of market imperfections (which are especially rampant in labor markets) that imply the existence of
non-competing groups or labor-market segmentation. In these theories, the return on human capital differs
between different labor-market segments. Similarly, discrimination against minority or female employees
imply different rates of return on human capital.
Human capital is the knowledge, skills, competencies and other attributes embodied in individuals that
facilitate the creation of personal, social and economic well being (OECD, 2001). In light of low education
attainments in substandard settlements in Korea (Table 6), increasing human capital requires a focus on areas
such as health, education, nutrition, and literacy. Basic determinants of health such as food, shelter, and
employment are necessary prerequisites.
Social and cultural capital
According to Putman (1995), social capital refers to the collective value of all social networks and the
inclinations that arise from these networks to do things for each other. Social capital is a key component to

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Table 7
Perception on neighborhood relations in substandard residential areas
Household (%)
Very close to the neighbors and helping each others
No difference compared to other neighborhoods
Having conicts with neighbors
Others
Total

129(72.5)
29(16.3)
12(6.7)
8(4.5)
178(100.0)

building and maintaining democracy. Nan Lins concept of social capital has a more individualistic approach:
investment in social relations with expected returns in the marketplace.7 Social capital is the relationship,
networks and norms that facilitate collective action(OECD, 2001), or the shared knowledge, understandings,
and patterns of interactions that a group of people bring to any productive activity (Coleman, 1988; Putman,
1995).
Cultural capital is the product of shared experience through traditions, customs, values, heritage, identity,
and history. Cultural capital is particularly important in aboriginal communities and in other communities
with a long history. In mainstream western society, particularly in North America, it is too often under-valued
(Roseland, 2005).
In the case of smaller societies, in which people merely fell into categories of age, gender, household and
descent group, anthropologists believed that people more-or-less shared the same set of values and
conventions. In the case of larger societies, in which people undergo further categorization by region, race,
ethnicity, and class, anthropologists came to believe that members of the same society often had highly
contrasting values and conventions. They thus used the term subculture to identify the cultures of parts of
larger societies (Hebdige, 1979; Thornton, 1995).8 Since subcultures reect the position of a segment of society
vis a vis other segments and the society as a whole, they often reveal processes of domination and resistance.
What are the characteristics of the substandard residential areas (or low-income communiteis) in terms of
social and cultural capital in Korea? There are two distintive characteristics revealed: stable community and
strong neighborhood relations.
Substandard housing areas are usually highly stable communities, based on kinship and peer group systems
with shared origins of common village or provincial backgrounds (Brandt, 1982; Ha, 2004). In urban areas of
Korea, social relationships are no longer neatly contained within distinct territories. People drive miles to see
friends and relatives rather than neighbors. The immediate locality becomes less important as people exploit
greater choices of whom to mix with and where to go. There is a shift from community of place to
community of interest, particularly in middle and high-income communities. But in considering slums, most
people think of a community as a particular place. When people live closely together, they are more likely to
form social and emotional ties.
According to the survey, most slum residents are very close to their neighbors and help each other out
(Table 7). People and social links contribute to the satisfaction of residents in the area. It is noteworthy that
people in slums have feelings for each other: fellow suffers sympathize with one another or misery loves
company. Slums dwellers have organized resident associations in order to strenghten ties. They participate in
the residents meeting actively (Table 8) and the resident association has very strong positive contributions,
particuarly solving problems of community, improving neighborhood environment, and strengthening
neighborhood identity or consensus (Table 9). In this case, community means much the same thing as
7

It may subsume some others concepts such as Bourdieu, Coleman, Flap, Putnam and Eriksson as noted in Nan Lin (2001).
As understood in sociology, anthropology and cultural studies, a subculture is a set of people with a distinct set of behaviour and beliefs
that differentiate them from a larger culture of which they are a part. The subculture may be distinctive because of the age of its members,
or by their race, ethnicity, class and/or gender, and the qualities that determine a subculture as distinct may be aesthetic, religious,
political, sexual or a combination of these factors. Subcultures are often dened via their opposition to the values of the larger culture to
which they belong, although this denition is not universally agreed on by theorists.
8

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Table 8
Participation of residents meeting (resident association)
How often participation

Household head (%)

Participating every time (all meetings)

Participating almost meeting except inevitable case
Depending on situation
Seldom
No participation
Total

60(42.9)
35(25.0)
8(5.7)
11(7.9)
19(13.6)
140(100.0)

Table 9
Perception on contribution and activities of resident association
Household head (%)
Solving problemsa and sharing ideas and information
Improving neighborhood environmentb
Having education and training opportunitiesc
Strengthening neighborhood identity or consensusd
A few contributions
Others
Total

21(17.2)
18(14.8)
8(6.6)
35(28.7)
29(23.8)
14(11.5)
122(100.0)

Problems on community.
Protecting vandalism, keeping clean street, etc.
c
Getting job information, using personal computer, etc.
d
Improving economic benets, helping each others: social and emotional tie.
b

subculture. Even though the large cohesive communities of the past have been disrupted and fragmented into
a weaker social network in modern Korea, many people in slums still have a sense of community.
Gentrification and preserving social capital
In urban Korea, housing regeneration has systematically reduced substandard housing in the areas where
low-income families concentrated, and thereby isolated and marginalized the displaced tenants. The housing
regeneration projects are basically prot-oriented rather than welfare-oriented for a community. The original
intent of most renewal projects shifted and was affected by housing speculation, which attracted more middleincome families into the projects.
During the 1960s and 1970s, urban and housing policy was characterized by a bureaucratic and reactionary
response. It was a laissez faire approach to low-income housing problems. But during the 1980s and 1990s, the
government policy focused on the role of the private sector within the context of deregulation. In line with the
privatization policy trend, particularly since the mid 1990s, the government lifted various housing related
regulations such as the price control on new housing. Since the IMF crisis in 1997, the market forces in the
housing sector rather than the role of the state was regarded as of greater importance.
With the emergence of JRPs in Seoul, an interesting trend has occurred in substandard residential areas. It is
similar to gentrication in Britain and the United States. The joint redevelopment schemes, which may
generate gentrication, vary from city to city, though a number of common denominators can be identied. In
the context of Korea, it is possible to identify three characteristics of gentrication. The rst characteristic is
that the process is geographically isolated, with a designated housing renewal area such as substandard
housing areas or squatter settlements. Second, the role of the state has changed. During the last 30 years, the
emphasis of the public sector in Korea was on the expansion of state-developed housing for sale rather than
for rent. The economic crisis in 1997 has brought about an even more signicant change in the ideological as
well as economical environment of housing discussion: market relations in the housing sector or market forces
rather than the role of the state are regarded as of greater importance. It is easy to point to the inux of private

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capital (big construction companies) into urban renewal schemes. The inuence of big companies and their
capital investment is getting more powerful (Yoon, 1994). Third, displacement imposes substantial hardships
on some classes of displaces, particularly lower-income tenant households and the elderly. The poor tenants
out movers through housing redevelopment project are particularly hit, nding the least satisfactory
alternative units and neighborhoods and facing the highest proportional shelter-cost increase. The inux of
middle and upper income groups into working-class neighborhoods brings high rents and relatively expensive
housing prices that are beyond the reach of lower income families.
Many obstacles are present in housing regeneration for the poor. An important problem has been that new
housing development through housing regeneration has been too expensive for the poor. Architects and urban
planners are too often concerned with their own self-image and frequently possess erroneous views of what the
poor really want. Turner (1976) argues that while no one doubts that in an ideal world most houses would be
well designed and serviced, in conditions of poverty another criterion is more important. The criterion is
whether housing suits the needs of particular poor families. Given the present circumstances of the family, the
quality of the house is an irrelevance; it constitutes oppressive, not good, housing.
In Korea the Governments efforts should be directed toward improving the existing housing stock.
Substandard settlements should be upgraded for the poor rather than being cleared with bulldozers. The
advantages of upgrading are that it preserves existing economic systems and social networks, thus enabling the
inhabitants to retain the maximum disposable income and community cohesion.
It is important for the low-income communities in Korea to preserve and multiply social and cultural
capital. Putman (1995) argues that social capital substantially enhances returns to investments in physical and
human capital. Social capital in the low-income communities in urban Korea includes community cohesion,
reciprocity, fellowship, commonly shared rules, and information. Social capital differs from other forms of
capital in several signicant ways in the context of low-income communities in Korea: rst, it cannot be
created instantly and is inherently non-transferable. Second, residents of substandard settlements are rarely
insolated individuals. Kinship ties play a strong role in the lives of squatters, both in terms of their initial
choice of settlement and the communal organization that develops within those settlements. Third, the critical
resource for strengthening community capital is not moneyrather, the critical resources are trust, consensus,
and the relationships between individuals.

Conclusions
Government policy toward substandard settlements in urban areas has usually been based on the
assumption that they are a cancerous growth. In the case of community capital in general and social capital
in particular, substandard settlements in urban Korea are not a cancerous growth or a unproductive
problem areas. What is needed is preserving and upgrading of these settlements.
In Korea, housing regeneration projects were accompanied by a booming housing market in the 1980s,
when high-rise condominiums became popular in urban areas. JRPs provided bigger houses as well as more
dwellings than before redevelopment. The issue of housing insecurity and inequality arises most acutely in the
case of urban regeneration policy, particularly JRPs in low-income residential areas. A residential area, which
is predominantly occupied by low-income households, such as manual workers and squatters, becomes
occupied by middle-income households through the housing regeneration projects. This processknown as
gentricationoccurs in poor communities.
Sustainable communities require signicant changes in structures, attitudes, and values. In terms of
sustainable communities, particularly low-income communities in urban Korea, it is useful to think of
community in terms of capital. It is very important for low-income communities in Korea to preserve social
and cultural capital.
There has been increasing criticism regarding pro-growth agendas for housing regeneration. Housing
renewal projects have caused other socio-economic problems such as the collapse of low-income communities
and human rights violations through eviction. Therefore, the governing agendas for low-income housing
associated with housing regeneration should be changed. It is suggested that the enabling approaches would
be the development of a low-income housing policy and an urban housing regeneration paradigm in Korea

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(Ha, 2001). The enabling framework should be developed in response to housing problems and the failure of
conventional public-sector responses (Turner, 1976).9
Since the late 1990s, the enabling approach in Korea has been more important than the other approaches.
One of the major reasons why the emerging paradigm of the enabling approach seems so attractive is that it
not only conforms with but also requires democratic participation. Popular participation now receives more
ofcial support. Civil society is also given a much greater role through NGOs and CBOs and citizens
movements. The enabling policies do not necessarily imply less government intervention. Governments
intervene to help to those whose housing needs and priorities are not met by the market or have particular
needs that the market does not cater to, like vulnerable groups.
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The origins of the idea that government actions in regard to housing should concentrate on enabling and supporting the efforts of
citizens and their community organizations to develop their own housing (UNCHS, 1996).