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O'Toole is close to the mark in surmising that the low birthrate is housing related, but Korean houses haven't gotten smaller in the past 30 years, so the declining birthrate doesn't come from "feeling cramped".
Instead, buying a flat (usually a condo in a high-rise) is the cultural norm in Korea upon marriage, and to marry without a flat lined up is to be subject to a lot of awkward questions. Imagine trying to avoid answering 200 variations on "so where are you going to live?" Anecdotally, the price/availability of housing has delayed every Korean marriage I am aware of. People really don't marry unless they can afford the property or win a housing lottery.
So the question O'Toole should be asking is not "why small houses?" but instead "why expensive houses now?" Part of that price could be the dependence on high-rises, but it doesn't quite have explanatory power: High-rises are more expensive to build per unit floorspace, but they are less expensive per family unit than detatched single-family homes. Construction costs cannot explain why the average sale price of a condo in Seoul is now more than one million dollars, in a country where the median income is around 50,000 dollars. The cost of housing is instead set by two other factors:
Everyone wants to live in Seoul, because of the metropolis network effects: there are more jobs, more services, better infrastructure, more retail/entertainment options, better hospitals, and better schools in Seoul. Consequently, moving to Seoul is high-status: "마소의 새끼는 시골로, 사람의 새끼는 서울로." - "Send your kids to Seoul, and your foals and calves to the countryside."
The housing market is dominated by speculation. For the past 15 years hodling Seoul apartments has been more lucrative than any other investment. People who have cash have been putting it into housing, people who don't have enough cash to buy flats outright have been putting it into housing "stocks" and taking out mortgages which release money if they win a government-run housing lottery (protip: for an edge in the lottery, get your disabled relative to apply, quietly buy the flat from them after a few years have passed, then flip the flat for profit). Due to a change in policy around 2020, even the mortgage route has recently became infeasible for the middle class:
Korean housing policy has been a disaster. The long and short of the linked article is that the last administration attempted to control housing prices by increasing property taxes and making it harder to get a mortgage, but this priced the middle class out of the market in Seoul and Incheon, and speculators who have cash have continued buying, with the price of condos doubling from 2018 to 2021.
My read on this is that the government is either dominated by or beholden to the speculator class. What remains to be seen is why the people seem resigned to the situation, instead of seeking alternatives. In a sane world, housing prices increasing beyond measure would incentivize more construction and more people seeking alternate housing arrangements to raise their families. To a certain extent, more construction is happening, with Seoul set to increase the limit on high-rise height and developing new satellite cities. But until then, few people seem willing to take the prestige, economic, or stability hit of moving to the countryside, trying to raise children in rental flats, or trying to raise kids in their parents' homes. Instead, young people of middling means have been moving abroad to have kids.
If the population starts really falling (and the same is true in China) even in Seoul then house prices collapse by default. I’ve seen all kinds of speculation as to why this might not be the case but I can’t see it, you can’t prop up a rental market with a huge number of empty units, especially if any landlords have mortgages or want to release equity in some other way. All you need is a few years of property heading the other way and its psychological value as a speculative asset is punctured indefinitely.
If it really is house price related then the problem is going to solve itself in short order.
That's all true, and housing prices have leveled off in some neighborhoods, so the end of the bubble may be nigh. The next step is that housing speculators push for increased immigration and increased social atomization to boost housing prices and to cover the domestic labor shortage caused by boomers retiring and millenials refusing to do blue-collar work. This will boost the anti-immigration party, which is on the left in Korea.
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What’s Israeli housing policy look like? They’re the only conventional developed country above replacement, seems like we should compare.
From what I've learned, there's nothing unusual beyond settlements.
Israel has a very natalist culture, which I think is mostly explained by their national trauma. Israel also has a very low power distance index (only Austria is lower among the developed countries, but I haven't experienced this in practice), which means you can't lose any status by having more children, living in a more cramped house and having less stuff, because you can't gain any status by having a bigger house, a bigger car and vacationing on Bali.
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I'm under the impression that the bulk of the above average fertility comes from conservative Jews, who are willing to endure financial hardships and the more secular Israeli society's begrudging tolerance.
Less-orthodox Jews do well too, and even secular ones are way better than anywhere else in the modernized world.
https://nationalpost.com/opinion/danielle-kubes-the-truth-behind-israels-curiously-high-fertility-rate/wcm/72a8dfda-a442-47d8-8a23-76faac276fa9/amp/
Thanks for the additional information!
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