For decades, Korea’s unique “jeonse” rental system was widely seen as a natural stepping stone to homeownership. The system spread during the country’s breakneck economic growth in the 1970s. Under jeonse, tenants pay their landlord a large lump-sum deposit — often equivalent to 60 to 80 percent of the property’s value — instead of monthly rent. The deposit is returned in full when the lease ends, typically after two years. Such distinct rental arrangements took root in part because Korea’s formal housing finance market was still underdeveloped at the time. As rapid urbanization drove millions of people from rural areas into cities, demand for housing surged. But ordinary households had limited access to mortgages, as banks were largely focused on channeling credit into state-led industrial development projects. Jeonse effectively filled that gap as a private alternative to bank financing. Landlords could use tenants’ deposits to fund part of a home purchase, invest the money or deposit in high interest-bearing accounts. In that sense, the deposit functioned much like a