Start of Metropolitan Area Commercial and Hotel Purchases "For the Purpose of Supplying Single-Person Housing"

Priority Purchase of Customized Housing Providing Living Services to Residents and Local Community
Applications Accepted from the 1st to the 5th of Next Month Across Seoul, Incheon, and Gyeonggi

The youth-tailored shared housing "Anam Saenghwal," supplied by Korea Land and Housing Corporation (LH) by remodeling a tourist hotel in the city center. / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Jo Gang-wook] The Ministry of Land, Infrastructure and Transport and Korea Land & Housing Corporation (LH) announced on the 1st that they will begin accepting applications for the purchase of non-residential properties such as vacant commercial spaces and tourist hotels in urban areas to supply housing for single-person households.

The remodeled housing will be leased at less than 50% of the market price through a 'private purchase agreement method' (public ownership), while improving the quality of the housing (private construction) and additionally providing residential services.

In this recruitment, housing with themes such as 'local government-linked' and 'professional organization-linked' will be prioritized for purchase. Applicants who propose operational plans that can activate the community while connecting with the local society will have an advantage.

Eligibility is limited to social economy entities (social enterprises, non-profit corporations, etc.) and housing rental management companies (with shared housing operation experience), considering the operation of the housing. Applications can be submitted individually or as a consortium with asset owners such as building owners.

The purchase targets are buildings located in Seoul, Incheon, and Gyeonggi-do (31 cities and counties) that are within 15 years of their initial use approval, including Type 1 and Type 2 neighborhood living facilities, office facilities, lodging facilities, etc. (Article 37, Paragraph 3 of the Enforcement Decree of the Public Housing Special Act), which can be converted to residential use through major renovations.

Since the housing is supplied to single-person households, the contracted projects must complete construction as studio-type (shared) housing such as multi-family houses, row houses, urban lifestyle housing, residential officetels, dormitories, etc., with a net floor area of 50m2 or less per household.

LH plans to prioritize purchasing housing that is ▲ located in areas convenient for public transportation such as station areas, ▲ utilizes entire buildings, ▲ has 150 units or fewer, and ▲ is demand-customized or themed.

Conversely, properties will be excluded from purchase if they have ▲ complicated ownership relations such as multiple divided or joint ownership, ▲ exterior finishing materials that are not semi-noncombustible or noncombustible, ▲ illegal buildings, or legal restrictions (seizure, auction, etc.).

The project procedure is document submission (February 1 to March 5) → purchase agreement signing → construction (5-step quality inspection) → completion → LH purchase → occupancy.

LH selects contract candidates through the review of the 'Purchase Review Committee,' which includes private experts (preliminary review and main review), and notifies them of the agreement signing.

After signing the agreement contract, private businesses proceed with permits such as use change and remodeling construction. To alleviate the financial burden on private businesses, LH pays 50% of the project cost immediately after construction starts (60% in the case of trust method), 30% upon sales contract after completion, and 20% upon final quality inspection completion (10% in the case of trust method).

Applications can be submitted by visiting the LH Social Housing Project Team* and submitting the required documents. The application period is until the 5th of next month. For more details, refer to the purchase announcement posted on the LH subscription center.

A Ministry of Land, Infrastructure and Transport official stated, “We will promote amendments to the ‘Public Housing Special Act’ to allow existing floor area ratios of tourist hotels exceeding residential floor area ratios to be applied as is,” adding, “Through remodeling of non-residential buildings using the purchase agreement method, we will quickly and affordably supply pleasant housing in prime urban locations where young people and other single-person households can live.”