The Path Opens for Supplying 88,000 Public Housing Units in Aging Residential Areas

'Public Housing Special Act' Amendment Approved at Cabinet Meeting
Extension of Urban Complex Project Sunset to End of 2026
Improvements to Landowner Priority Supply Criteria and Other Systems

The sunset deadline for the ‘Urban Public Housing Complex Project’ (hereinafter referred to as the Urban Complex Project), which supplies public housing by high-density development of old residential areas in the city center that lack business viability, has been extended. This has paved the way to supply 80,800 public housing units nationwide in urban centers. The government also announced that it will revise related systems in line with this extension of the sunset deadline.

Ministry of Land, Infrastructure and Transport. / Photo by Hyunmin Kim kimhyun81@

On the 10th, the Ministry of Land, Infrastructure and Transport announced that the Cabinet meeting approved the promulgation of the amendment to the ‘Special Act on Public Housing’ to extend the sunset deadline of the Urban Complex Project. The amendment will be promulgated and enforced on the 20th of this month, and the sunset deadline will be extended by 2 years and 3 months until December 31, 2026.

The Urban Complex Project refers to the high-density redevelopment of old areas within the city center, such as station areas, semi-industrial zones, and low-rise residential areas, led by public institutions like the Korea Land and Housing Corporation (LH), to supply newly built housing. Introduced as a ‘three-year temporary’ measure in 2021 to expand urban housing supply, the project is currently underway in a total of 53 locations nationwide, with a scale of 88,000 housing units. However, as the sunset deadline approached on the 20th of this month, concerns arose that the momentum for project promotion would be lost. Although 16 designated districts and 6 planned districts are unaffected by the sunset, candidate sites face a high possibility of project cancellation.

The Ministry of Land, Infrastructure and Transport judged that additional housing supply was necessary to resolve the shortfall in housing supply, which did not meet the original target of ‘196,000 units over five years,’ and to cool down the overheated housing market. Accordingly, it submitted a request to the National Assembly to extend the sunset deadline by 1 year and 3 months until 2025. During the National Assembly discussions, the period was extended by an additional year.

With the extension of the sunset deadline, it is expected that the government’s goals of approving projects for 10,000 housing units and designating districts for 15,000 housing units under the Urban Complex Project will be achieved within this year. The privately led Urban Complex Project, not by public institutions, is also scheduled to be fully implemented starting February next year.

The Ministry will also undertake system improvements such as rationalizing the priority supply reference date for landowners. Currently, the priority supply reference date is uniformly set as June 29, 2021, so those who acquired land or other properties after that date cannot receive apartment sale rights and can only receive cash settlements. The Ministry plans to raise resident participation rates by adjusting the reference date to the individual candidate site selection date, allowing those who acquire land or housing afterward to also receive apartment allocations. Four amendment bills to the Special Act on Public Housing, including these system improvements, have been submitted to the Land, Infrastructure and Transport Committee.

Meanwhile, regardless of this extension of the sunset deadline, candidate sites such as ‘Near Beondong Middle School’ in Gangbuk-gu, Seoul, where the participation intention rate was below 50% after a resident briefing session on detailed project plans, will discontinue the project. The same applies to the ‘South Side of Seodaemun Station’ candidate site in Seodaemun-gu, where the local government requested withdrawal due to low participation intention rates.

Kim Baeseong, head of the Public Housing Promotion Division at the Ministry of Land, Infrastructure and Transport, said, "With this extension of the sunset deadline, we expect not only stable project promotion but also the full-scale discussion of system improvements to enhance resident participation."