Experiment of sharing by an urbanologist
KIM, Kyung-min | professor of Urban Planning & Development at Seoul National University
In the age of convergence, seemingly disparate concepts and phenomena are interacting with each other, creating a huge ripple effect throughout society. For me, “sharing economy,” “mobile,” “platform,” and “O2O” are part of it.
While there are different interpretations, sharing economy basically refers to economic actions of people who consume or produce while sharing something. But the concept of “sharing economy” is actually something that emerged out of the blue in the 21st century. We have a tradition called “pumassi,” meaning exchange or community sharing of labor, where people who live in a neighborhood offer their labor to others and make use of labor of others for their own production in exchange. In other words, economic actions of sharing labor with others have been there for a long time. However sharing economy started to receive a great deal of attention at the beginning of the 21st century since economic actions can happen in a short period of time without space constraints; for example, some people who live in Seoul and some who live in Busan get together to buy something as a group even if they are complete strangers to each other. And the result is, as seen in the cases of Airbnb and Uber, a rapid growth of companies built around sharing economy ideals.
Such a rapid growth is linked to the advent of the mobile era. Everyone connects to a mobile network, which enables an immediate decision-making. “Platforms,” where trades of goods and services happen, have been added onto the mobile networks. As a result, efforts to share things are occurring more rapidly than ever before.
The combination of sharing economy and mobile platform has brought a new change to the real estate industry. Shared house, shared office, shared factory and other new types of real estate products have come to the market and got lots of attention.
My area is real estate/urban planning and I am particularly interested in development that achieves social equity – I call this appropriate or fair development. It is about building shared houses at an appropriate level of (construction) cost for disadvantaged people in a particular region and renting them out to those people at an affordable rent. This kind of “appropriate” development can be realized through shared houses reflecting the idea of sharing economy and mobile platforms.
In Yeoksam-dong, Gangnam-gu, the average rent for a studio apartment (10 pyeong) is about 0.9 to 1 million won. However, hardly any young office workers just starting out in a career at a company along the Teheran Street can afford that level. In that sense, relative disadvantaged people in this region are those young office workers. Although they are the ones essential for growth of the society, ironically they have been outed from the residential areas in the region. Therefore, from the aspects of urban planning/real estate development, housing for these people means a lot.
While paying 0.9 to 1 million won as a monthly rent is an impossible option for them, houses with much lower monthly rents of about 0.6 million won supplied into the market would make a huge difference. Although it is still a high level for some, at least this level of rents is within the affordable range. In general, developed countries see 25 to 30 percent of your income as benchmark for affordable housing. Therefore, for a person whose monthly income is between 1.8 and 2 million won, 0.6 million is still under the rent threshold.
Then it seems developers can simply build houses with about 0.6 million monthly rents. But if that means more dosshouses or gosiwon – a very small room rented monthly by students or workers, that wouldn’t do much good to the society. Now developers have got a new challenge – what is an appropriate model of housing for young workers that will also bring more benefits to the whole society?
Shared house can be a good solution. Residents have their own space (bedroom) but share other spaces such as kitchen and dining room with other residents. Although their private space might be smaller than a studio, they can enjoy more communal space. Also they pay lower rents than the amount they pay for a studio since their private space is smaller. As a result, shared houses, a real estate product based on the idea of sharing economy, can be useful as housing options for relative disadvantaged people.
But at this stage, developing and operating shared houses still have potential risks, as the market for shared houses is not fully matured. If the needs from the consumer side doesn’t lead to actual residency, companies that develop or operate shared houses can suffer financial damage due to business failures. In that sense, while the role of such companies is to break a new ground for an immature market, it would be a challenging task even for a leading conglomerate.
But use of social media might be a way to overcome such risks; building a mobile platform to identify consumers’ needs and to create a preliminary list of residents would enable verifying marketability and finding actual residents in advance. In other words, it is about combining sharing economy with mobile platform to create and grow a new market. And incentives for developing housing for the disadvantaged would make it feasible to build shared houses as shared space that seeks to achieve social equity.
During my sabbatical year, I dabbled in an interesting project. I happened to participate in a project to plan and develop “ShareOne,” a newly built shared house in Yeoksam-dong and was able to test my theory on realizing appropriate development through shared houses. In the planning stage, I worked on separation between communal space and private space; calculation of appropriate size of each space; solving bottlenecks in usage of restroom before everyone goes to work (my solution was to separate the sink, the dresser and the shower); and space configuration that enables community building – all of these ideas were reflected in the development. Considering that local architecture design firms had limited capability in designing a shared house, I referred to overseas cases and consulted with companies with expertise in the field.
At this moment, as the shared houses are in place and operational, I have learned the plain truth there is always a gap between the ideal and reality. Its community building effect has not come up to my expectation. Maybe because the life of young Korean workers for whom overtime is no wonder is too dry, they just want to flee into their own private life as soon as they enter their space. But there’s a positive effect too – problems that often occur in a communal living such as interpersonal issues and noise are resolved through communication between tenants. It is an encouraging phenomenon that shows an aspect of community building at an early stage.
Discovering demand and identifying real demand for shared houses, as well as witnessing its feasibility reminds me that appropriate development might be successful. This is what I learned from my experience with the “ShareOne” project during my sabbatical.