[9·26 Supply Measures] Additional 30,000 Houses Including 3rd New Towns · One-Year Easing of Resale Restrictions on Public Land

The government has decided to convert residential land originally planned for sale to the private sector into public housing land, thereby supplying an additional 30,000 housing units in new towns in the Seoul metropolitan area to alleviate concerns about supply shortages. To ensure timely supply of public housing land to developers capable of advancing projects, the government will temporarily ease resale restrictions on public housing land for one year. It will also accelerate project progress by relaxing various regulatory procedures that slow down approvals.

On the 26th, the government held a 'Real Estate Related Ministers' Meeting' at the Government Complex Seoul and announced measures to revitalize housing supply reflecting these points.

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho, Minister of Land, Infrastructure and Transport Won Hee-ryong, and Financial Services Commission Chairman Kim Ju-hyun are announcing the "Housing Supply Activation Plan" on the 26th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Jo Yong-jun jun21@

Expanding Supply by Increasing Floor Area Ratio in 3rd Phase New Towns... Introducing Fast Track to Shorten Project Duration by 4-6 Months

First, to compensate for the contraction in private supply, the government will secure additional public housing units. The floor area ratio of 3rd phase new towns such as Goyang Changneung and Namyangju Wangsuk will be increased to supply an additional 30,000 units. Enhancing land use efficiency will enable securing more units and reduce development costs, which will help lower sale prices.

Existing residential land plots that have not yet been sold or developed for private sale will be converted into public housing projects. Among 14,000 unsold residential land units (29 plots), after reviewing location, size, and demand, approximately 5,000 units will be converted to public housing land to increase public housing supply. The volume of new public land will be increased to about 85,000 units, 20,000 units more than the original plan of 65,000 units, and the announcement timing will be advanced from the first half of next year to November this year.

The supply speed will also be increased through a fast track. By approving district plans and housing project plans simultaneously, the government plans to shorten project progress by more than 4 to 6 months. Additionally, various impact assessments required for housing project plan approval will be relaxed to allow final change approval or completion before construction starts. For public housing projects by local public corporations, feasibility reviews will be exempted for projects costing over 50 billion KRW, to be implemented within this year.

Furthermore, the pre-application for New:Home scheduled for the end of this year will proceed as planned without disruption. Major 3rd phase new towns will begin site development construction in earnest this year, and the Incheon Gyeyang project aims to start construction in the fourth quarter. Supply within urban centers through public urban complex projects will also be actively promoted. The government plans to designate a total of 10,000 units within the year, visualize the first 3,000-unit project, and pursue institutional improvements such as excluding these from the price ceiling system.

The appearance of Goyang Changneung District in the 3rd New Town [Image source=Yonhap News]

Public Land Resale Allowed for One Year... Incentives for Advancing Approval Procedures by One Year

To activate private housing supply, resale restrictions on public land will also be eased. For developers capable of advancing projects, resale restrictions on residential land will be temporarily relaxed for one year to ensure timely supply of public land. Accordingly, resale below the initial price will be allowed once from two years after the transfer of land ownership registration and contract. To prevent speculative bidding, resale between affiliated companies will be prohibited, and local governments will be requested to investigate and strictly punish side agreements.

Incentive measures to encourage approvals have also been prepared. Normally, approval procedures are completed within two years after public land supply, but if completed within one year, incentives will be provided for new public land supply. A certain portion of the new land lottery allocation will be preferentially supplied to companies that obtain early approvals, and in competitive supply methods, a bonus point of up to the current maximum of 5% will be granted. The same will apply to already sold land, excluding companies involved in speculative bidding.

Measures to swiftly convert existing sale projects into rental projects have also been introduced. The public-supported private rental housing contest currently underway will be expanded from 10,000 units annually to 20,000 units, and the fund-supported loan limit, currently between 70 million KRW and 120 million KRW, will be temporarily increased to between 90 million KRW and 140 million KRW.

Reflecting recent inflation, standards for construction cost increases have also been established. The government will use the revised standard contract form from August to adjust construction costs that may cause disputes. When judging whether to reflect price fluctuations, the item adjustment rate or index adjustment rate used in construction will be the basis, and the method for calculating amounts during contract adjustments will be specified. Especially for redevelopment projects, a specialized standard contract form will be separately prepared to encourage parties to negotiate and narrow differences if construction costs rise beyond a certain level.

Approval procedures will also be improved. Local government consultative bodies will be operated to actively resolve approval obstacles, and integrated review of housing project approvals will be made mandatory to shorten approval periods. Rational standards for school facility donations will be established, and the scope of exemptions for school site charges will be expanded.

Plans to expand construction workforce will also be pursued. The quota for hiring foreign workers in the construction sector will be continuously expanded to ensure stable construction progress by legally employing foreign construction workers.

Additionally, legislative tasks to rationalize regulations identified as obstacles to redevelopment and other maintenance projects, such as rationalizing redevelopment charges and abolishing residency requirements, will be actively discussed with the National Assembly and promptly revised.