Junggi Junganghoe Proposes Expansion of Priority Supply Volume and Public Rental Housing

Perspective view of exclusive housing for small and medium-sized enterprise workers in Eumseong-gun, Chungbuk. Photo by Junggi Joonganghoe

[Asia Economy Reporter Moon Hyewon] The Korea Federation of Small and Medium Business (KBIZ) proposed expanding the priority supply volume and public rental housing projects as real estate policies to support workers in small and medium-sized enterprises (SMEs).

On the 23rd, KBIZ announced this through the "Research Report on Real Estate Policy Measures to Improve Housing Welfare for SME Workers."

According to KBIZ, current real estate policies supporting SME workers include the priority supply system for SME workers, exclusive housing projects for SME workers, and the rental deposit loan system for young SME employees. However, the actual priority supply volume and exclusive housing supply for SME workers were found to be minimal. KBIZ explained that it is difficult to expect the effectiveness of these systems, and the current rental deposit loan support system, capped at 100 million KRW, is insufficient to cover the continuously rising rental deposits.

In the case of Singapore, the real estate market is analyzed to be very stable through policies such as ▲strong public-led public rental housing policies ▲provision of public rental housing and community facilities of various sizes ▲expansion of supply volume and prevention of speculative demand by selling and renting at prices 45% lower than market prices and offering discounts upon purchase after renting.

KBIZ argued that Korea should also refer to Singapore's policies and pursue expanding the priority supply volume for SME workers, expanding public rental housing projects for SME workers, raising the upper limit on rental deposit loans for SME workers, and exempting acquisition tax for housing welfare facilities for SME workers.

In particular, it was explained that to stabilize housing for SME workers, 15% of the housing supply volume should be specially allocated to SME workers, and public rental housing should be built in industrial complexes and greenbelt areas to provide affordable rents.

To improve accessibility and utilization of the system for SME workers, KBIZ proposed expanding the priority supply recommendation institutions for SME workers beyond the Ministry of SMEs and Startups to include economic organizations such as KBIZ and industry-specific SME organizations like SME cooperatives.

Yang Chanhoe, head of the KBIZ SME Research Institute, said, "If real estate policies to improve housing welfare for SME workers are promoted, positive effects such as strengthening SME competitiveness through job creation and attracting talented personnel, as well as stabilizing the real estate market through expanded public supply, can be expected."

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