The state allocates houses to the citizens in North Korea and as they are not privately owned, they cannot be bought or sold. Once allocated, house occupants live in them virtually throughout their lives, though they can bequeath them to their offspring, or other people they designate. Since the 1980s, however, houses have in fact been marketed; not by ownership, but by the right of occupation. House prices fluctuate and differ between urban and rural areas and between popular and unpopular locations.
The urban management office under the jurisdiction of the provincial, city or county people's committee (the administrative agency), in principle allocates houses based on applications in the order of receipt, taking into account the number of family members. But the principle is seldom observed, because supply falls far short of demand. Though a housing construction boom is now underway across the land, the house self-sufficiency ratio is as low as 50% in the North, according to an estimate available at the Korea Housing Corp. in the South.
Newly married couples waiting for house allocation are increasing in number day by day and faced with the sharp shortage in housing, houses with a greater number of rooms are exchanged for those with less number of rooms, and some houses are inevitably bought or sold.
Illegal as they are, the authorities connive at house transactions. The first and second blocks of apartments along the Changgwang Street of Pyongyang around Chunggu Station were originally meant for use by laborers. But most occupants of the apartments, commanding the highest black-market prices in the North, have now been replaced by leading central party officials and rich Korean immigrants from Japan.
The more convenient transportation is from living quarters, the closer it is to the downtown area, the better its facilities are, and the lower the story it is located on, the more popular an apartment becomes. There exist real estate middlemen, who are not permitted to do business openly, and each neighborhood has a numbers of these whom prospective house sellers and buyers call on. They know who in the neighborhood want to sell their houses, who wants to buy them and at what prices; they arrange for bargains between sellers and buyers, and mediate on prices. Once transactions are realized, they receive brokerage commissions.
Neither land nor house ownership documents exist, but one's "right to occupy a house" has to be acknowledged by the rural management office. Accordingly, the post of housing section chief in the rural management office is one of the most lucrative ones in the North. A 105 square meter apartment in a favored neighborhood of Pyongyang sells for about US$1,500. House price levels are halved in cities housing provincial governments such as Shinuiju, North Pyangan Province, and Hyesan, Yanggang Province. The price levels are again halved in ordinary cities and towns housing county offices. In some areas, houses can be exchanged for several kilograms of corn.
Rampant death from starvation, people fleeing the country as a result of the perennial food shortages that hit the North in the mid-1990s have given rise to numerous vacant houses. "Because of hunger, my family swapped a ground-floor apartment with one on the fifth floor of the same building in return for 13kg of corn. Then selling the 5th-floor apartment to a neighbor in exchange for three-day food ration tickets, my family moved to a vacant house in the suburbs and lived there," recalls a North Korean defector living in the South, who had served as a housing officer in Musan, North Hamgyong Province.
Because they cannot be owned as property, houses are not subject to speculation. They are needed merely for the purpose of living in. When one is banished or abruptly reassigned to the countryside, one has to depart a city leaving his or her house behind. Consequently, houses carry less value than one's property like television sets, refrigerators and wardrobes, and merit less affection.
Ordinary laborers occupy about 33 square meter houses. Newly married couples, whom are yet to be allocated with houses live with their parents or neighbors. Having virtually given up the supply of living quarters, the state encourages business establishments and individuals to secure houses on their own. Corporations and other offices accordingly resort to various measures to make living quarters available to their house-less employees. Some would-be grooms build their own houses on empty space during their spare time; others obtain rights to get houses allocated by offering labor at housing construction sites. Bachelors undergo considerable hardship living in dormitories. Hence single men opt for marriage primarily for the purpose of getting a houses allocated.
(Kim Mi-young, miyioung@chosun.com)
