Urbanization in Korea over the last five decades can be characterized by unprecedented rapid process, predominance of large cities, spatial polarization, and formation of the mega-city region. The influx of population from outside the city created an acute housing shortage, and price soared beyond the reach of the average citizen. To achieve rapid, continuing industrialization, housing had to be insulated from the rest of the economy. Housing shortage was one of the most serious problems Korean society has faced ever since the rapid urbanization process. Over the past decades in Korea, numerous policies have been designed to address the urbanization problems, particularly housing problems. On the whole, Korea’s urbanization policy has been interventionist. Rapid growth in Korean cities is straining the capacity of their shelter delivery systems. Governments have chosen a variety of implicit and explicit policies to ameliorate these strains. This paper is to explore the impacts of rapid urbanization and housing policy in South Korea. Urbanization has both positive and negative roles and consequences in Korea. If managed well, urbanization can provide significant gains in terms of prosperity and housing poverty alleviation without the social costs that some countries are already facing. Managing the urban transition effectively will call for significant policy reforms, the use of new instruments and processes, and the enhanced involvement of the private sector and civil society. A balanced treatment of the impact of urbanization is therefore useful, though empirical evidence suggests that positive aspects generally outweigh negative ones.