[8·4 Supply Measures] Private Developers Also Allowed to Convert 'Commercial Spaces to Rental Housing'... 2,000 Additional Units Supplied (Comprehensive)

Projects previously limited to LH·SH now open to private sector
Converting vacant commercial spaces to residential due to COVID-19
Revamping aged public rentals to supply 3,000 additional units

[Asia Economy Reporter Moon Jiwon] In the future, private businesses will also be able to participate in projects that convert vacant commercial spaces and offices in downtown Seoul into residential units for supply. The government expects that this will lead to the addition of about 2,000 rental housing units in downtown Seoul.

According to the government's announcement on June 4 regarding the plan to expand housing supply in the Seoul metropolitan area and surrounding regions, private businesses will be allowed to convert vacant offices and commercial spaces into residential use and supply them as publicly supported private rental housing.

Previously, only public institutions such as Korea Land and Housing Corporation (LH) and Seoul Housing and Communities Corporation (SH) could participate in this project.

However, with the rapid rise in housing prices in the metropolitan area, the need to increase housing supply in downtown Seoul has grown, and there have been inquiries from private businesses wishing to participate in this project. Therefore, the government has decided to allow private businesses to participate through this new measure.

When private businesses participate in this project, they can receive support such as loans for remodeling costs and exemptions from additional parking lot installation requirements.

Since this project involves converting commercial spaces or offices located in downtown areas that are not residential zones into living spaces, maintaining the existing parking lot installation obligations for residential areas would make project implementation impossible.

However, private businesses must restrict tenant qualifications to 'non-vehicle owners' in the same way as public projects to ensure public interest and prevent traffic congestion. They must also comply with obligations such as a minimum 10-year rental period, rent requirements, and priority supply to vulnerable housing groups.

The government expects that allowing private businesses to participate will result in the supply of more than 2,000 units. Adding the 5,000 units expected to be supplied by LH and SH, approximately 7,000 additional units are anticipated in the downtown area.

Minister of Land, Infrastructure and Transport Kim Hyun-mi is briefing on April 4 at the Government Seoul Office in Jongno-gu, Seoul, about plans to expand housing supply in the Seoul metropolitan area and surrounding regions. Photo by Kang Jin-hyung aymsdream@

Additionally, the government will promote a pilot project to reorganize aging public rental housing, supplying an additional 3,000 units. The aging public rental housing will be developed as complexes where various groups such as newlyweds and young people live together.

Some of these units will be released as public sale units. To prevent displacement of existing residents, nearby public rental and purchased rental vacancies will be prioritized for provision, and the project will be implemented as a cyclical redevelopment project.

Urban planning standards will also be relaxed. The mixed-use development district unit plan, applicable in semi-residential and commercial areas near subway stations, will be expanded to residential areas near subway stations, and floor area ratios will be relaxed up to a maximum of 700%.

To foster diverse residential spaces in downtown areas, the government will improve and promote activation of the minimum location regulation zone system, which minimizes various urban regulations. Two additional sites for cyclical redevelopment projects in semi-industrial areas will be identified.

Furthermore, the move-in requirements for public rental housing units that have remained vacant for more than six months will be relaxed to rent them to homeless individuals urgently needing housing. Residents will be able to live there for a minimum of four years.

Currently, there are about 900 long-term vacant public rental housing units in Seoul. The move-in income requirement will be lowered from 50-100% of the average monthly urban worker income to 150% or less (6.57 million KRW for two persons). Asset requirements remain the same.

The government also plans to support first-time homebuyers and other actual demanders without housing by piloting equity accumulation-type sale housing among public sale units.