Urban Public Housing Complex Project: Over 70% Public Sale of Housing (Comprehensive)

Ministry of Land, Infrastructure and Transport Announces Legislative Notice for Amendment to Enforcement Decree of Public Housing Special Act on 16th
Public Owner-Occupied and Public Rental Housing to Have 10-20% Quotas Each
Amendments to Promote Small-Scale Housing Maintenance and Urban Regeneration Also Finalized

[Asia Economy Reporter Kangwook Cho] More than 70% of the housing built through the core ‘Urban Public Housing Complex Project’ of the February 4th supply plan will be supplied as public sale housing. Public owner-occupied housing with equity accumulation and profit-sharing types, as well as public rental housing, will be built at rates of 10-20% each.

The Ministry of Land, Infrastructure and Transport announced on the 16th that it will give prior notice of the amendment to the Enforcement Decree of the “Special Act on Public Housing” containing these details. The amendment mainly specifies the details of the urban public housing complex project presented in the February 4th plan and the operation method of profit-sharing type public owner-occupied housing.

The urban public housing complex project is a project to supply housing through high-density development led by public institutions in station areas, low-rise residential areas, and semi-industrial zones. It is carried out as a public-led fast track that relaxes urban regulations such as floor area ratio incentives and simplifies approval procedures such as integrated review.

According to the amendment, more than 70% of urban public housing will be supplied as general public sale housing. For landowners without additional payment capacity, public owner-occupied housing (profit-sharing type, equity accumulation type) is set at 10-20% of the total. Public rental housing will be supplied at 15-20% in station area projects and 10-20% in other types.

The floor area ratio in residential areas can be increased up to 120% of the legal maximum. If the district area is less than 50,000㎡, the obligation to secure urban parks or green spaces is exempted. The project target requires that the number of old buildings over 20 years old must be 40-60% of the buildings in the area.

To receive in-kind compensation through equity accumulation or profit-sharing type sale housing, one must be a non-homeowner or own only one house within the district at the time of the compensation plan announcement. If one household or one person owns more than one land parcel, only one house will be supplied, and if two or more people share one house or one land parcel, only one house will be supplied. It is possible to receive two houses within the total compensation amount or the residential exclusive area of the previous house. However, in this case, one house must be a small house with an exclusive area of 60㎡ or less.

After the project district is designated, a resident council consisting of all landowners will be formed. The resident council can recommend constructors or appraisers with a majority attendance and majority approval of those present.

For efficient operation, the resident council may establish a resident representative meeting. The representative meeting, composed of 5 to 25 members, can provide opinions on detailed criteria such as bidder qualifications during constructor bidding announcements, additional payment methods, and timing of move-in fees.

The supply price of profit-sharing type sale housing will be determined through consultation between the public housing project operator and landowners within a range of 50-80% of the sale price. The repurchase price of profit-sharing type sale housing is calculated by applying the profit and loss sharing standard to the arithmetic average of two or more appraisal values at the time of repurchase. Profit-sharing type housing supplied to non-homeowners will be supplied at a level below 80% of general public sale housing in the same area, and at repurchase, 50-80% of the appraisal price will be applied proportionally to the holding period and sale price. Both in-kind compensation recipients and general non-homeowners are subject to a 5-year actual residence obligation.

For public sale housing and public owner-occupied housing, the general supply ratio will be expanded to 50%, up from the current 15% for public sale housing. The current 100% sequential selection method for general supply will be changed to 70% sequential and 30% lottery. Eligibility is limited to household members who have been non-homeowners for more than 3 years. If the sale price of public sale housing (60㎡ or less) exceeds 900 million KRW, income requirements will be waived.

In addition, the Ministry of Land announced prior notice of amendments to the Enforcement Decrees of the “Special Act on Vacant Houses and Small-scale Housing Maintenance” and the “Special Act on Urban Regeneration Activation and Support.”

Small-scale redevelopment projects target areas where the number of old buildings accounts for two-thirds or more of all buildings and meet conditions such as access to two or more roads (each at least 6m and 4m wide). The project implementation area for private street housing maintenance projects will be doubled from 10,000㎡ to 20,000㎡.

Also, the area of the newly established Residential Regeneration Innovation District under the amended Urban Regeneration Act is limited to within 20,000㎡ to prevent excessive land acquisition. The Residential Regeneration Innovation District project targets areas where the sum of buildings over 20 years old, vacant houses, suspended construction buildings, and dangerous buildings accounts for two-thirds or more of all buildings in the district.