Seoul City Provides One-Year Free Guarantee for Jeondae-Type Social Housing Rental Deposits

[Asia Economy Reporter Lim On-yu] The Seoul Metropolitan Government announced on the 11th that it will launch the 'Seoul Social Housing Safety Guarantee' product for sublease-type social housing in collaboration with the Korea Credit Guarantee Fund on the 19th to strengthen the protection of deposit guarantees for tenants of rental housing.

Seoul social housing is a publicly supported private rental housing where the Seoul Metropolitan Government purchases land or partially supports building remodeling costs, and social economy entities related to housing, such as cooperatives, act as operators, allowing tenants to live for up to 10 years at about 80% of the market rent. The sublease type involves operators leasing privately owned buildings or vacant houses, remodeling them, and then re-leasing them to tenants.

As of July this year, there are 457 sublease-type social housing units in Seoul.

With the introduction of the safety guarantee, tenants can receive their deposits back even if the operator's business situation deteriorates. Although there were existing rental deposit return guarantee products, they required collateral on the owned building, so sublease-type social housing operators could not subscribe.

The city plans to operate the safety guarantee with a total deposit limit of 3 billion KRW and fully support the guarantee fee rate of 0.5% during the first year of the pilot project period.

Kim Seong-bo, head of the Housing and Architecture Headquarters of Seoul City, said, "We will create residential conditions where citizens can live comfortably from the tenants' perspective for sublease-type social housing, which had somewhat insufficient tenant protection," adding, "We will also revitalize the supply of social housing."

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