From August, Mandatory Supply Ratio for Rental Housing Raised to 30%

[Asia Economy Reporter Yoo In-ho] Starting as early as August, the mandatory supply ratio of rental housing in redevelopment complexes applying for project implementation plan approval in Seoul is expected to increase to 30%.

According to the Ministry of Land, Infrastructure and Transport on the 13th, the Regulatory Reform Committee of the Office for Government Policy Coordination passed the amendment to the Enforcement Decree of the "Urban and Residential Environment Improvement Act" on the 10th, which raises the upper limit of the mandatory supply ratio of rental housing in redevelopment complexes. Previously, in April last year, the Ministry of Land announced a policy to raise the mandatory rental ratio for redevelopment and announced the amendment to the enforcement decree for public comment in September.

The amendment includes raising the upper limit of the rental ratio against the total housing in metropolitan redevelopment complexes from 10-15% in Seoul and 5-15% in Gyeonggi and Incheon to 20%. Redevelopment complexes are required to build rental housing due to the public nature of the project.

The amendment also includes raising the rental ratio that local governments can increase according to the housing supply and demand situation from the existing 5 percentage points to 10 percentage points. When the enforcement decree sets the mandatory rental range, local governments set the mandatory rental ratio for redevelopment complexes in the area again within this range through ordinances.

Seoul City is very proactive in raising the mandatory rental ratio for redevelopment complexes, and it is known that once the enforcement decree is amended, the ordinance will be revised to increase the rental housing supply ratio up to 30%.

Accordingly, it is expected to affect redevelopment projects underway in Seoul. According to the Seoul City Redevelopment and Reconstruction Cleanup System, currently, 295 redevelopment projects are underway, including 76 urban environment improvement projects, and 125 districts have proceeded to the union establishment approval stage, which is before the project implementation plan approval. There are 50 redevelopment complexes at the union establishment approval stage, just before the project implementation plan approval.

With the amendment of the enforcement decree, redevelopment projects in commercial areas, which were previously excluded from the mandatory rental housing supply target, are newly included. However, the Ministry of Land plans to remove the lower limit of the mandatory rental supply ratio for commercial area redevelopment such as the Saeun Sangga redevelopment, reflecting Seoul City's opinion.

The amendment to the enforcement decree is scheduled to be promulgated in early May after review by the Ministry of Government Legislation, vice ministerial meetings, and Cabinet approval. Although the amendment was originally set to take effect immediately after promulgation, a three-month grace period was granted as local governments need time to prepare ordinance amendments. The amended enforcement decree will take effect from early August.

This content was produced with the assistance of AI translation services.