[2020 National Audit] Seoul City Youth Housing, Only Private Operators Receive Transit-Oriented Benefits After 10 Years

[Asia Economy Reporter Donghyun Choi] Although Seoul City is expanding the supply of station-area youth rental housing to address youth housing issues, concerns have been raised that only private developers will benefit from the station-area premium after the 10-year mandatory rental period ends.

On the 20th, Jo O-seop, a member of the National Assembly Land, Infrastructure and Transport Committee from the Democratic Party of Korea, pointed out in a press release distributed ahead of the scheduled Seoul City audit, "Although there is a plan for Seoul City to purchase the remaining units when some of the public contributions are reclaimed after 10 years in the station-area youth rental housing project, the plan lacks feasibility."

The station-area youth rental housing promoted by Seoul City is subject to a 10-year mandatory rental period for private developers under the Enforcement Decree of the Special Act on Private Rental Housing. Additionally, according to the Act on the Recovery of Development Gains, 10-30% of the land is allocated by usage type as public contribution to remain as existing youth rental housing, while the private developers can newly set the rental deposits and rents for the remaining units.

As of the end of last month, Seoul City has completed permits for a total of 12,952 youth rental housing units in 46 station areas, including 2,598 public rental units and 10,354 public-supported private rental units. The plan is to expand to 80,000 units by 2022. Assemblyman Jo criticized, "Private developers participating in the station-area youth rental housing project will raise rental deposits and rents after 10 years, and as a result, at least 56,000 youths who have been living in youth rental housing will be forced to look for rented rooms again."

Although Seoul City plans to purchase the remaining units except for those left as youth rental housing through public contribution, it is pointed out that due to the characteristics of station areas, land and building prices may skyrocket after 10 years, making actual purchase difficult.

This year, youth rental housing completed includes 2,178 units in six complexes such as Urbaniel With The Style (499 units) in Chungjeongno, Seodaemun-gu, and Oksan Green Tower (74 units) in Guui-dong, Gwangjin-gu. Among these, only 297 units (13.6%) are public rentals directly supplied by Seoul City, while the remaining 1,881 units (86.4%) are supplied by private developers.

Assemblyman Jo said, "Given the nature of youth housing, a significant number of youth tenants will want to continue living even after the mandatory rental period ends," and added, "Seoul City must establish systematic measures to ensure that youth housing maintains its public nature even after the mandatory rental period with private developers ends."