The purpose of this paper is to analyze the possibility to reduce social costs by designing practical incentive systems to induce tenants’high cost behavior to low cost one in the rental housing market. First, we construct a theoretical rental housing model including heterogeneous tenants (i.e., high-cost and low-cost) who are identified by their generating costs. We analyze numerically how the social costs change under the combination of the exogenous contract length and the criteria for judging tenants. Second, we discuss incentive systems to improve tenants’behavior. High-cost tenants willingly modify their behavior when they can enjoy less total payments of living. We introduce the subsidy system, relocating rent benefits from low-cost tenants to high-cost tenants, to encourage changes of high-cost tenants’behavior. This subsidy system leads high-cost tenants to modify their high-cost behavior, comparing the case of no such relocating subsidy system. It is beneficial for both tenants to modify rents by being judged their behavior, and it also contributes to reduce social costs.

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The purpose of this study is to develop the housing welfare indicators for evaluating housing welfare policies conducted by the Korean government.The contents of this research were as follows: as a phrase of setting up the development of housing welfare indicators, the scope of housing welfare and the direction of developing housing welfare indicators were settled. Second, as a phrase of drawing the housing welfare indicators, the indicators were categorized and selected. Third, as a phrase of applying the housing welfare indicators, the indicators in this research were quantified, and suggest the housing welfare from 2000 to 2005. As a result of this research, selected housing welfare indicators were settled as follows: the housing welfare indicators comprise 9 in the department of ‘House’，4 in the department of Community，and 6 in the department of‘Policy Environment' (19 in total). Indicators were (1) Ratio of housing with Flush Toilets (2）Ratio of housing with Kitchen Sink (3) Ratio of housing with Bath facilities (4) Ratio of housing provided water supply (5) Ratio of housing supplied a sewage system (6) Floor Space per person (7) Number of persons per Room (8) PIR (9) RIR (10) Community Facilities Space per person (11) Urban Park Space per person (12) Journey to work (13) Crime Ratio (14) Number of Houses per 1,000 persons (15) Ratio of Substandard housing of the Minimum Housing Standard (16) Ratio of Irregular Dwelling Households (17) Ratio of Owner Occupant (18) Ratio of compulsory immigration (19) Ratio of Long-term Public Social Houses. The housing welfare indicators developed in this research will be used for the comprehensive assessment of the results of housing welfare policies and the establishment of housing policies as a basic material in the future.

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