'Gonggong Jeonse' Purchase Announcement Within the Year... Accelerating Floor Area Ratio Increase in Urban Areas

Formation of 'Supply Inspection TF' Led by Deputy Minister of Land
Active Cooperation to Achieve 11·19 Policy Goals

Minister of Land, Infrastructure and Transport Kim Hyun-mi is visiting a purchased rental housing located in Eunpyeong-gu on the 22nd and inspecting the interior. (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] The government will hold a purchase agreement briefing session on the 7th and 8th of next month to secure the supply of 'public jeonse'?a core element of the jeonse policy?and plans to announce the purchase within the year. Additionally, it has decided to accelerate efforts to increase floor area ratio (FAR) to boost housing supply in urban areas.

The Ministry of Land, Infrastructure and Transport (MOLIT) announced on the 26th that it held the first video conference of the 'Supply Inspection Task Force (TF),' chaired by First Vice Minister Yoon Sung-won, to review the implementation status of follow-up measures for the jeonse policy and to identify additional institutional improvements.

The meeting included participants from the Ministry of Economy and Finance, Seoul Metropolitan Government, Gyeonggi Province, Korea Land and Housing Corporation (LH), Seoul Housing and Communities Corporation (SH), Gyeonggi Housing and Communities Corporation (GH), Korea Housing Association, and Korea Housing Builders Association.

They agreed to concentrate all efforts to achieve the supply targets outlined in the recently announced 'Support Measures for Housing Stability for Low-income and Middle-class Households.'

On the 19th, MOLIT announced plans to supply 114,000 jeonse-type public rental units by 2022 to alleviate the jeonse shortage. Among the supply volume, public jeonse accounts for 18,000 units, general purchase rentals 44,000 units, and vacancy-utilized rentals 39,100 units.

Among these, the jeonse-type supply utilizing vacancies will shorten the preparation period for each project as much as possible and begin recruitment next month.

For purchase agreements to supply new housing such as public jeonse units, a project briefing session will be held on the 7th and 8th of next month, with purchase announcements planned within the year.

The volume under agreement will be recruited in advance to enable early supply effects.

Additionally, to activate purchase agreements, the government will provide construction funds at low interest rates in the 1% range to significantly reduce the interest burden on private developers.

For companies with excellent supply performance in urban areas, priority supply and additional points will be applied during bidding for new public housing sites. Detailed information related to this will also be announced next month.

When concluding purchase agreements, the government will first present design and quality standards to guide the supply of high-quality housing.

Furthermore, to promote housing supply in urban areas, the government will actively pursue the increase of floor area ratio proposed by the Korea Housing Association and the Korea Housing Builders Association.

By January next year, the system will be improved to relax the floor area ratio up to 700% through the establishment of district unit plans in areas with convenient transportation, and institutional grounds for public reconstruction height increases will also be prepared.

First Vice Minister Yoon Sung-won of MOLIT said, "We will do our utmost to expand the supply of high-quality housing at apartment-level standards in areas with favorable locations to resolve short-term supply and demand instability and stabilize the jeonse market."