Is it necessary to buy a house? From a sharing economy point of view, it might be natural for you to think of this. This is because you could simply share instead of splurging on something expensive. However, the concept of a share house is already pursuing a new direction, going beyond the concept formulation step. From what seemed like the far future has already approached the present; as such, let’s get to know more about share houses, which has been evolving into a relationship from sharing.
From ownership to use, a residential space that requires a change in consciousness.
Seoul is a city that particularly needs share houses. It is common sense to know that prices of houses in Seoul are exceptionally high, even among the world’s top cities. According to the Bank of Korea, as of the third quarter of 2016, Seoul’s annual disposable income to house prices ratio is times 10.3.
This means that you will have to save the money you earn as salary for 10.3 years, after deducting taxes, in order to buy your own house. To compare this ratio, the house prices in Seoul are cheaper than Beijing (14.5 times) and Sydney (12.2 times), but more expensive than Los Angeles (9.3 times) and London (8.5 times).
It is a tragic reality that even though you’ve saved money your whole life and bought a house, you still end up unfortunate after retirement. In fact, real estate accounts for most of Korea’s housing assets. Looking at the 2015 National Balance Sheet released by the Bank of Korea and the National Statistical Office, three-quarters of our households’ assets are concentrated in houses and land, which shows that the phenomenon of having an imbalanced real estate is serious.
You are fortunate if you have enough money to invest some of them in real estate, but the problem lies in people investing by incurring unreasonable debts. Much of Korea’s huge household debt, which has already exceeded 1,4000 trillion KRW, is mortgage loans. Although the government notices and is concerned about household debt as a detonator of our economy the citizens aren’t able to easily abandon the illusion of real estate investment due to the learning effect of the past real estate inflation and the low loan interest.
Debt is bound to gradually increase. The money you saved from endless work disappears after paying back your debt. When you repay the principal at maturity, you are likely to get another loan. Likewise, houses are no longer a nest of your daily life, but a subject of speculation. You have to earn for a lifetime in order to keep your home bought from debt; thus, the reward of working will then fade away. Money is becoming people’s master rather than a means; as such, your life depreciates and you are only left with a house after retirement. No one would’ve dreamed of having such a life from the beginning.
It is important to remember that a house is the base of your life before it is a property. Now, there is a need to find an efficient means to use a house, instead of owning one. While temporary accommodation sharing services such as AirBnB is under the spotlight, there are various models in share houses where the house and guest live together cooperatively. The simplest form is the so-called peanut house. It is where two families jointly buy a land, and consequently build a house on top of it.
This has the advantage of having a single house for a small fee, and the residences are separated while sharing a yard. It is a type of residence where you can feel a sense of closeness while keeping your privacy. There has been increasing numbers of parents living with their children, especially as grandparents who take care of their grandchildren on behalf of the parents who are both working. If they are well-coordinated, this becomes a desirable form for a share house where both generations can live in harmony.
From mere house sharing to a place where new relationships are built.
Unlike the cases of share houses in Korea, where acquainted people live together, sharing houses in foreign countries take place due to a need. Since 1981, the New York Foundation for Senior Citizens (NYFSC), a nonprofit organization in the USA, has been implementing a shared housing program for seniors. Let us introduce you to the successful case study of this organization.
Ms. Y, a retired 76-year-old single woman, has lived in a two-bedroom apartment in Manhattan for the past 30 years. However, the tenant has recently left his room due to a new job and she’s been having troubles since then. There is now insufficiency in maintaining the apartment due to reliance on her sole income. Upon hearing this, a social worker at the Senior Center invites Ms. Y to the house sharing program.
Conversely, a 64-year-old white-collar worker, Ms. C, moved to Manhattan from Indiana, and then lived with her daughter by changing from one friend’s place to another. Ms. C ends up applying for a house sharing program of the NYFSC through an invitation from a social worker. The NYFSC uses their accumulated know-how and techniques to analyze the needs, inclinations, and interests of Ms. Y and MS. C, and as a result, they evaluate that it will be beneficial if they live together. At first glance, both Ms. Y and Ms. C have already become interested in each other, and from having common interests, they are able to develop their relationship in sharing their deepest stories to each other.
Upon checking the place, Ms. C was very pleased with the apartment and agreed to pay $800 per month as rent, and consequently moved into Ms. Y’s house. As a result, Ms. Y was comfortable, since she would receive a monthly rent, and no longer had a reason to leave her beloved place. Ms. C got a nice nest in a relatively affordable price. In addition, they were able to enjoy the same hobbies, including listening to classical music, cultural life, reading, knitting, etc., reducing their loneliness as a result.
Intergenerational connectivity through share houses, which can be the key to residential concerns.
According to an Australian share house site (flatmates.com), sharing houses among middle-aged people over 40s has increased by 20% over the previous year in 2016. In particular, the growth rate of the age group composed of 60-64 year olds reached over 43%. Besides monetary benefits, there is a growing awareness that seniors and juniors can meet each other’s needs through share houses. In one of those cases in Australia, an unmarried mother in her 30s was looking for a living space with someone to take care of her child.
In the meantime, an old couple living in a house had it as their only asset, and didn’t have enough case to continue with their daily lives. Both parties were connected through the share house site. The elderly couple receives their necessary living expenses in return for taking care of the single mother’s child and providing them with a comfortable space to live in. The single mother is able to work comfortably without worrying about her child.
Share houses may have the ultimate goal of allowing people a chance to meet each other, live together, and give each other the help they need. Perhaps share houses can be the key in solving most of the problems we are facing in terms of housing. A young man who is struggling with the rent of the city that’s too expensive, a retiree who is worried about their remaining mortgage loan, and a lonely, elderly person who is tired of their loneliness—share houses can become the best choice to meet everybody’s needs.
The most important thing is mutual understanding and consideration!
There are some things to watch out for when sharing a house. No matter how close you are to your friend, is it very common for friendships to go sour if you stay with someone even just for three days. Sharing a living space is never an easy task. If you have an optimistic or romantic approach when sharing a living space with someone you’ve met for the first time, it will surely fail. When sharing, everyone thinks they are getting the short end of the stick. If you don’t want to fall into this trap and fail, you have to be genuinely happy with the fact that you’re helping someone.
More importantly, you have to espouse a grateful attitude, instead of taking someone’s help for granted. Through this process, some people have admitted that their viewpoint of life has expanded because of share houses. If you are worried about your privacy than the joy of living together, specifying the rules that you have to mutually adhere to in the contract will reduce the disputes that may arise in the future.
The NYFSC does not use the term “rent” in sharing houses, but refer to it as a “contribution,” and there is a need to take a deeper look into this meaning. The word “contributions” means to “supply” to another being beyond my interests. It would be great to recall all the public values for a “world where people help each other”.
Currently, the city of Seoul is running a new generation-combination room sharing project entitled <Same Roof Generation Sympathy>. The <Same Roof Generation Sympathy> is a residential space sharing program that guarantees rental income for the elderly who have a spare room, while offering affordable housing for college students. For more information, visit the Same Roof Generation Sympathy website (http://www.peterpanz.com/house_share)!
This article was planned by Share Hub and was written by Ji Cheol-won, a researcher of the Truston Asset Management Pension Forum.