Urban Commercial and Office Spaces Supplied as Public Rental Housing... "Targeting 8,000 Units"

Minister of Land, Infrastructure and Transport Kim Hyun-mi is deep in thought at the 1st Real Estate Market Inspection Meeting of Related Ministers held on the 5th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Moon Jiwon] The government is set to actively promote a project that converts vacant stores and offices in urban areas into residential spaces. The government's goal is to supply an additional 8,000 housing units in downtown areas such as Seoul through this initiative. However, concerns have been raised that the effect on stabilizing housing prices may not be significant, as most of the supplied housing will be spaces for single-person households, and the willingness of building owners to participate remains uncertain.

On the 11th, the Ministry of Land, Infrastructure and Transport announced that a partial amendment to the Special Act on Public Housing, which expands the supply of public rental housing for 1-2 person households in urban areas, passed the Cabinet meeting that day. The amendment, primarily proposed by Park Sanghyuk of the Democratic Party of Korea, passed the National Assembly plenary session on the 4th.

The core content of the amendment is to expand the range of existing buildings that public housing providers can purchase for supplying public rental housing from residential and quasi-residential buildings to offices and commercial stores.

Previously, public housing providers purchased residential and quasi-residential buildings, renovated them, and supplied them, but going forward, offices and lodging facilities in urban areas can also be remodeled and supplied as public rental housing.

To revitalize the project, the government will allow private developers to participate alongside public institutions such as Korea Land and Housing Corporation (LH) and Seoul Housing and Communities Corporation (SH).

When private developers enter into purchase agreements with public housing providers to participate in the public rental housing supply project, the parking standards applied to LH, which is 0.3 spaces per household, will be applied equally.

Once the public housing provider completes the contracted housing subject to the relaxed parking standards, they must request the private developer to purchase the property within one month, and the private developer must complete the purchase within two months of receiving the request. The government expects that through this project, LH and SH will supply about 5,000 units, and private developers about 2,000 units in downtown areas such as Seoul.

However, since most of the units are expected to be 'one-room' units for single-person households, the industry assesses that the effect on stabilizing housing prices is uncertain. An industry official said, "It may help young people and other single-person households, but the effect of dispersing demand for Seoul apartments and stabilizing housing prices will be limited."

It is also pointed out as a problem that only single-person households without vehicles can move in, and that the residential environment is poor due to locations in commercial areas. This amendment is scheduled to take effect on October 18. The government plans to revise subordinate laws to specify the types of buildings that can be purchased and to establish detailed procedures such as relaxed parking standards.

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