Activation of Senior Residences... Future Housing Strategy for an Aging Society [AK Radio]

Accelerating Aging Era, New Housing Strategies
Expanding Demand for Customized Rental Housing by Asset and Income

The recent government announcement on revitalizing senior residences is emerging as a crucial housing strategy in Korean society, which is rapidly entering an aging society. In particular, this announcement is significant as it includes various housing types and services for the elderly. Senior residences encompass concepts such as Silver Towns, Silver Stays, and elderly welfare housing, aiming to provide housing solutions tailored to diverse income groups and needs.

Senior residences fundamentally refer to housing facilities for the elderly. Among them, Silver Towns are the most well-known type, primarily high-end elderly welfare housing supplied by the private sector. Silver Towns require a deposit ranging from 200 million to 1 billion KRW upon move-in, with monthly rents between 2.3 million and 4.6 million KRW. These costs include various services such as cleaning, meals, health care, and leisure activities.

On the other hand, Silver Stays, targeting middle-class elderly, are privately rented housing supported by public subsidies, with rents set at 95% or less of market prices, providing basic health care and housekeeping services. Elderly welfare housing for low-income groups is designed to offer affordable access to health and leisure services, with deposits ranging from 2 million to 3.5 million KRW and monthly rents between 40,000 and 70,000 KRW.

As Korean society enters a super-aged society, the demand for housing facilities for the elderly is increasing. However, current senior residences are mainly located on the outskirts of cities, posing accessibility issues. Access to essential infrastructure such as hospitals and stores is difficult, causing inconvenience for actual users. Especially, accessibility to medical facilities located in urban centers is crucial for prompt response in emergencies, but current senior residences fall short in this regard.

Senior residence providers point out difficulties in securing sites in urban areas and high initial investment costs as major problems. In particular, current legal regulations require ownership of both land and buildings to establish Silver Towns, making it difficult for private businesses to enter the market. Additionally, the recovery of funds for Silver Towns takes a long time, increasing the risk for operators.

From the users' perspective, lack of information about high-end housing facilities like Silver Towns is identified as a problem. There is insufficient clear information about what facilities and services are provided, making it difficult for users to make choices. Furthermore, the burden of asset liquidity, such as selling existing homes or utilizing housing pensions to move into Silver Towns, is significant.

The government is proposing various regulatory relaxations and incentives to address these issues. It plans to ease the requirements for land and building ownership and amend regulations to allow the establishment of Silver Towns with only land or building usage rights. Additionally, it aims to reactivate the sales-type model of Silver Towns to revitalize areas with declining populations and support site acquisition through floor area ratio relaxation and utilization of idle facilities.

However, for these policies to be effective, more specific support measures are needed. In particular, a long-term housing supply and demand plan is required to expand senior residence supply within urban centers, and a cautious approach considering the impact on the existing real estate market is necessary.

Senior residences are an important housing strategy in preparation for entering an aging society. Along with government policy improvements, social interest and discussion are needed at this time. Various forms of senior residence supply should be provided so that the elderly can spend a comfortable old age in housing facilities suited to them, and both the government and private sector must work together to achieve this.

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