Kyung-Hwan Kim: Urbanization, Quality of Life, and Affordable Housing

On September 9, 2022, Penn IUR hosted Professor Kyung-Hwan Kim for a lecture on South Korean urbanization, quality of life, and affordable housing. Kim was an ideal person to hold forth on these topics, given his career as a leading scholar and government official.

Kim received his PhD in economics from Princeton University in 1987. One year later, he began his career as a professor of economics at Sogang University, continued as a faculty member until 2006, and served as academic dean from 2003-2006. He has also taught at the University of Wisconsin-Madison and Singapore Management University. 

Kim has been a longtime Penn IUR Scholar and has co-authored papers with Penn IUR Co-Director, Susan Wachter, and contributed to Global Urbanization, part of the City in the 21st Century book series. With his experiences as president of Korea Research Institute for Human Settlements urban finance advisor at the UN Centre for Human Settlements (Habitat), and president of the AsRES, he has become a recognized as a leading expert on global housing issues.

More recently, Kim worked in the public sector, serving as vice minister of the Ministry of Land, Infrastructure and Transport of the Republic of Korea from May 2015 to June 2017.

All of these experiences were brought to bear as Kim began his lecture with a sweeping overview of the impacts of urbanization during the past 60 years. He called cities “engines of growth,” with major cities having outsized GDPs; for example, Los Angeles has a GDP nearly the same size as all of Australia. Additionally, he noted that there is a positive correlation between human productivity and city size. “Bigger cities provide greater opportunities to learn from more people,” Kim said.

But cities also come with challenges; in particular, inequality tends to grow with city size. Megacities often attract top talent with big salaries, and they also attract the very poor because of megacities’ numerous job opportunities.

After setting the stage with this introduction on the effects of urbanization, Kim then gave an overview of the impact of urbanization on South Korea. South Korea is now 92 percent urbanized, and it is the 10th largest economy in the world. Many indicators have improved, with life expectancy now exceeding that of the United States. Kim’s favorite indicator – the height of a 14-year-old boy – has increased by 6 inches since 1960. “What is the goal of cities?” Kim asked. The answer, he says, is “making cities safer, more inclusive, sustainable, and resilient.”

Additionally, Kim shared indicators that show improvements in South Korean housing as well as key infrastructures. Housing, he said, was given a low priority until the 1980s when people rallied to increase the amount of housing in the country. In 1988, the country adopted a five-year plan to build 2 million new units and achieved that goal ahead of schedule. That said, housing prices have still gone up in recent years, and between 2016 to 2021, the price-to-income ratio for housing has nearly doubled in Seoul.

Affordable housing is not the only sector with room for improvement. South Korea has the longest average commute times among OECD countries. Air quality is low and South Korean cities rank low on rankings of self-reported happiness. South Korea also has the lowest fertility rate in the world. “It’s the country’s most serious challenge,” Kim says. The population of South Korea has just begun to decline; some schools in small villages in the countryside are being turned into senior citizen centers. 

What can be done to solve these problems? Professor Kim believes the country needs to become more family friendly and lower the cost of raising children. Kim suggested that better land use regulations could help increase the supply of housing and lower its cost, thereby making it easier and more affordable to raise a family.

Despite South Korea’s challenges, Professor Kim displayed a fierce pride in his country’s ascent over the past half century. While acknowledging some mistakes, he maintained, “Overall we made good policy decisions.”