Byeon Chang-heum "3rd New Towns, Over 35% Rental Supply... Private Sale Down 40%"

Minister of Land, Infrastructure and Transport nominee Byeon Chang-heum is arriving at the hearing preparation office set up at the Seoul Regional Land Management Office in the Government Complex Gwacheon, Gyeonggi Province on the 21st. / Gwacheon - Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Lee Chun-hee] Byeon Chang-heum, the nominee for Minister of Land, Infrastructure and Transport, announced that out of 173,000 households in the 3rd phase new towns, more than 100,000 households are planned to be supplied as public housing.

In response to a written question submitted to the National Assembly on the 21st, Byeon answered Sim Sang-jung, a lawmaker from the Justice Party, who inquired about the ratio of private sales, public sale, and public rental housing in the 3rd phase new towns, saying, "(The 3rd phase new towns) will supply all long-term public rental housing with a public rental rate higher than the 2nd phase new towns at over 35%, provide public housing at about 60% including public sales, and plan private sale housing at less than 40%."

This is based on the public housing ratio stipulated in the current Enforcement Decree of the "Special Act on Public Housing." The decree requires that public rental housing in public housing districts be supplied at 35% or more of the total number of households, and public sale housing at 25% or less. The combined number of public rental and public sale households must be at least 50% of the total households.

Applying these ratios, the total supply of 173,000 households in the 3rd phase new towns is divided into ▲public rental (35%) 60,550 households ▲public sale (25%) 43,250 households ▲private sale (40%) 69,200 households. Considering that the public sale housing ratio is capped at 25% by the decree, while the public rental housing ratio is set only as a minimum of 35%, the proportion of public rental housing could be higher. If the ratio is raised to about 60%, it would amount to 103,800 households.

The area around Gyosan District in Hanam City, Gyeonggi Province, planned as the 3rd phase new town. [Image source=Yonhap News]

In the past, the public housing ratio in the 2nd phase new towns was about 35% (public rental 20%, public sale 15%). The sharp increase in the public housing ratio is due to the application of different laws. Up to the 2nd phase new towns, development was carried out under the "Land Development Promotion Act," which was abolished in 2014. Accordingly, the 3rd phase new towns are developed under the current Special Act on Public Housing.

Byeon added, "Considering public supply conditions and consumers' diverse demands such as preference for medium to large-sized units, I believe that supplying private sale housing through private sales is also necessary." However, Byeon noted, "The 3rd phase new towns are currently in the process of district planning, so the specific housing ratios by type are not yet finalized as far as I know."