[2022 National Audit] They Said They Would Increase Public Rental Apartment Sizes... Zero New Supply of Units Over 60㎡ This Year

Construction-Type Public Rental Housing by LH Until July

Only 5 New Approvals with 1,139 Units

[Asia Economy Reporter Kim Min-young] It has been revealed that there were no cases introducing medium-sized units preferred by tenants in this year’s newly promoted ‘construction-type public rental housing’ projects. Although the government promised to increase the supply of units with exclusive areas of 60㎡ (18 pyeong) or more to improve the quality of public rental housing, which has been neglected by the market, this has not been properly implemented.

According to data submitted by the Ministry of Land, Infrastructure and Transport and Korea Land and Housing Corporation (LH) to Hong Ki-won, a member of the Democratic Party of Korea, from January to July this year, the number of newly approved LH construction-type public rental housing projects was five, totaling 1,139 units. By region, the breakdown is as follows: △ Sejong City (Administrative Complex 6-3M4 Block) 159 units △ Gyeongju, Gyeongbuk (Gyeongju Naenam 1 Block) 90 units △ Daejeon City (Daejeon Indong 1 Block) 120 units △ Icheon, Gyeonggi (Icheon Janghowon B-2 Block) 620 units △ Changnyeong, Gyeongnam (Changnyeong Yeongsan 2 Block) 150 units.

The problem is that there was no supply in Seoul, where housing demand is concentrated, and even these were built only as small units with exclusive areas under 60㎡. Of the total 1,139 units, 828 units, or 72.7% of the total supply, were 46㎡ or less, approximately 14 pyeong in size. The integrated public rental housing in Icheon Janghowon B-2 Block, the only one in the metropolitan area, consists of more than half of the 620 units as 442 units (294 units of 26㎡ and 148 units of 37㎡), which are about 10 pyeong in size, and the permanent rental housing in Gyeongju Naenam 1 Block, with 90 units, is composed only of 26㎡ (7.9 pyeong) units.

Previously, in the 2022 work report, the Ministry of Land, Infrastructure and Transport promised that from this year, newly approved construction-type public rental housing would be supplied as integrated public rental housing regardless of classification such as permanent, national, or happy housing, and that the proportion of medium-sized units with exclusive areas of 60 to 85㎡ would be expanded. The Yoon Seok-yeol administration set a policy to improve the size and internal and external quality of public rental housing, but has yet to achieve clear results.

Moreover, concerns have been raised that the drastic budget cuts for public rental housing next year by the Ministry of Land, Infrastructure and Transport will hinder the supply of high-quality public rental housing. According to the proposed budget for next year presented by the Ministry, the loan and financing budgets for construction-type public rental housing?permanent, national, and happy housing?will decrease by 41.4% (126.7 billion KRW), 52.4% (572.5 billion KRW), and 37.8% (1.0254 trillion KRW) respectively compared to this year. The budget for multi-family purchase rental housing will also decrease by 33.6% (3.0797 trillion KRW), from 9.156 trillion KRW to 6.0763 trillion KRW during the same period.

Assemblyman Hong Ki-won said, "To improve housing quality, more money needs to be spent, but I cannot understand how the government plans to provide quality housing while cutting related budgets," emphasizing, "The government support unit price must be made realistic, and the rental housing budget must be significantly increased."