Public Rental Housing Cheaper Than Market Price, 80,000 Units by Next Year
Already Received 80% of This Year's Target Applications from Private Sector
Kim Su-sang, Director of the Housing and Land Office at the Ministry of Land, Infrastructure and Transport, is announcing the progress of short-term housing supply measures, including public jeonse, during the Weekly Housing Supply briefing at the Government Sejong Complex on the 6th. (Photo by Ministry of Land, Infrastructure and Transport)
[Asia Economy Reporter Moon Jiwon] The government plans to supply 38,000 units of ‘public jeonse’ and ‘non-residential remodeling housing’ this year through a short-term housing supply plan. The government explained that it has already received project applications for about 30,000 units, which is approximately 80% of this year’s target supply volume (38,000 units), from private developers.
On the 6th, the Ministry of Land, Infrastructure and Transport announced, "As part of the follow-up measures to the 2·4 Plan, about 30,000 units of projects have been applied for by private developers as of the end of last month."
The short-term housing supply plan involves providing new housing that newlyweds, large families, and the elderly can move into within 1 to 2 years in urban areas. By securing housing in urban areas through methods such as new construction purchase agreements, ‘public jeonse housing’ mainly of medium-sized units will be supplied to 3-4 person households, and ‘non-residential remodeling housing’ will be supplied to single-person households.
The Ministry of Land, Infrastructure and Transport plans to supply a total of 80,000 units, including 38,000 units this year and 42,000 units next year. Of these, 32,000 units will be in Seoul.
In the case of new construction purchase agreements, private developers enter into a prior agreement with the Korea Land and Housing Corporation (LH) and others to sell the housing they build, which is then purchased upon completion and supplied. Residents can live at less than 50% of the market price. The ministry received about 18,000 units of project applications from private developers by the end of last month. Currently, about 14,000 units have also signed agreement contracts. The ministry conducted tenant recruitment for 2,100 units by the end of last month and plans to recruit tenants for an additional 3,900 units by the end of this year.
Public jeonse housing is a type introduced for the first time this year through the November 19th jeonse measures last year. Households of 3-4 persons can live for up to six years in newly built medium-sized housing with three or more rooms at a jeonse deposit of 90% or less of the market price. It is characterized by allowing all non-homeowners to apply without separate income or asset requirements. If competition arises, tenants are selected by random lottery. About 9,600 units of projects have been applied for from the private sector, and contracts for 900 units have been completed. The ministry plans to secure about 3,000 more units within the first half of the year by providing various incentives.
Non-residential remodeling is a project to remodel hotels, commercial buildings, offices, etc., in good urban locations into housing to respond to the increasing demand for single-person housing. Currently, a total of 28 projects (about 3,000 units) have been applied for by private developers. On-site inspections and purchase reviews will be completed in the first half of the year, and tenant recruitment is expected to begin around the end of the year at the earliest.
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