Ministry of Land, Infrastructure and Transport's 2021 Work Plan Reported to Cheongwadae
2·4 Measures to Supply 830,000 Houses, 1.27 Million Houses in the Seoul Metropolitan Area
Policy Support for Early Settlement of the Three Lease Laws
Expansion of Quality Public Rental Housing...Attracting the Middle Class
Strengthening Investigation of Illegal Real Estate Activities and Speculation
[Asia Economy Reporter Moon Jiwon] The Ministry of Land, Infrastructure and Transport (MOLIT) will steadily implement the existing supply plan of 1.27 million households in the Seoul metropolitan area and the recently announced additional nationwide supply plan of 830,000 households through the 2·4 measures to ensure housing stability.
Additionally, MOLIT plans to expedite the establishment of the 'Three Lease Laws,' including the lease reporting system to be implemented from June, to support tenants' housing stability, and will also accelerate the expansion of high-quality public rental housing for the middle class.
On the 16th, Minister Byeon Changheum reported the 2021 MOLIT work plan, which includes these details, to President Moon Jae-in during a video briefing between the Blue House and the Government Complex Sejong.
Accelerating Supply of 2 Million Households... High-Quality Public Rental Housing
First, according to the 'Public-led 3080+ Metropolitan Area Housing Supply Drastic Expansion Plan' announced on the 4th, MOLIT will supply 836,000 quality affordable housing units in metropolitan areas nationwide by 2025 (320,000 in Seoul, 616,000 in the metropolitan area). Combined with the previously announced supply plan of 1.27 million households in the metropolitan area, the total supply volume reaches a record high of approximately 2 million households.
The district plans for 240,000 households in the metropolitan area, including the 3rd New Towns, will be finalized within the year, and 7,000 households will be selected as leading projects for public redevelopment and reconstruction in Seoul. From June, incentives will be provided if small-scale reconstruction projects secure public interest. Through 9,000 public jeonse (long-term lease) houses, 21,000 newly purchased contracted houses, and remodeling of 6,000 vacant non-residential units, housing will be supplied in urban areas in a short period.
MOLIT will redefine the types of 'affordable' housing that can meet diverse housing demands beyond sale and rental housing in the first half of the year and supply them in urban areas. The main types include equity accumulation housing, repurchase condition housing, land leasehold housing, and shared mortgage-linked housing, which Minister Byeon has advocated since his academic days.
For youth, more than 54,000 public rental units will be supplied, including 8,600 job-linked units and 1,500 dormitory-style youth housing units. Since January, separate housing benefits have also been provided to unmarried youth in their 20s who previously did not receive housing benefits.
For newlyweds, more than 60,000 public rental units will be supplied, including newlywed-specialized complexes in public rental housing (Namyangju Byeollae, Hwaseong Taean 3), and 2,000 welfare housing units for the elderly will also be supported. Full-scale redevelopment projects for low-income groups in slum areas will also begin. Through projects near Daejeon, Yeongdeungpo, and Seoul Station, 6,000 households will be prioritized for residents of slums, goshiwon (small rooms for rent), and semi-basement dwellings.
In particular, MOLIT will accelerate the supply of medium-sized rental housing (60?85㎡) for 3-4 person households. Income requirements will be improved to 150% of the median income so that more households can live in affordable rental housing, and major finishing materials will be upgraded to the level of sale housing to dispel the perception that public rental housing is of lower quality than general housing.
Active Response to Illegal Activities... Early Establishment of Three Lease Laws
MOLIT will establish a regular dedicated organization as early as next month to strengthen the functions of the current 'Real Estate Market Illegal Activities Response Team' under MOLIT to effectively block illegal real estate activities. It will investigate unclear fund transactions in areas where prices surge due to development prospects, detect illegal activities, and quickly identify abnormal signs such as speculative transactions for proactive response.
Existing policies such as the realization of official property prices and improvements to the subscription system will also be continuously promoted. According to the official price realization plan announced in November last year, official prices will be gradually increased, and the disclosure of basic data will be expanded to enhance the transparency of the official price system operation.
Preparations for the lease reporting system, which will be implemented from June, will be carried out without delay to support the early establishment of the Three Lease Laws, including the right to request contract renewal and the lease term limit system. The lease reporting system will be piloted in some areas starting in April. From November, plans to pilot the disclosure of actual lease transaction information will also be pursued.
Since the new lease law enacted last year caused a rapid rise in jeonse prices and increased disputes between landlords and tenants, policies such as expanding the lease dispute mediation committee and strengthening the lease consultation call center will continue.
To ease tenants' burdens, the small-amount tenant deposit, which allows tenants to receive partial priority repayment of their deposits, will be realized. The period for a 70% reduction in the guarantee insurance premium rate, which registered rental business operators are required to subscribe to, will be extended until December this year, and procedures such as refunding tenant premiums in cases of overlapping subscriptions between landlord insurance and tenant jeonse deposit return guarantees will be established to resolve overlapping subscription issues.
Furthermore, to support tenants and small business owners struggling due to COVID-19, rents for public rental housing, Happy Housing REITs, and publicly supported private rental REITs will be temporarily reduced. In addition, joint inspections of rental business operators by related agencies will be conducted to strengthen landlord management.
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