SH Corporation Builds Land-Leased Social Housing Using Vacant Houses in Seoul

An empty house in Yeongdeungpo-gu, Seoul

[Asia Economy Reporter Onyu Lim] Seoul Housing and Communities Corporation (SH Corporation) announced on the 2nd that it will construct land-lease social housing by utilizing some of the vacant houses located in Seoul and will publicly recruit private business operators from the 24th of this month to the 12th of next month.

'Vacant House Utilization Land-Lease Social Housing' is a type of public housing where public housing is built on vacant house sites and leased to young people or newlyweds at prices lower than market rates. It targets vacant house sites owned by SH Corporation or vacant house sites proposed for purchase by business operators to SH Corporation, which are leased long-term at low interest rates to social housing operators (social economy entities related to housing).

In particular, participation is also possible for vacant house sites desired by business operators (hope-type projects), not just vacant house sites owned by SH Corporation, so social housing projects are expected to be promoted in a more autonomous form.

To provide more people with opportunities to participate in the project, SH Corporation expanded the eligibility criteria for the public offering to include small and medium-sized enterprises under the Small and Medium Enterprise Act engaged in construction, real estate, leasing, and other industries.

Business operators can finance up to 90% of the project cost through loans. SH Corporation supports maintaining the loan interest rate at 1.8% (for up to 15 years) to reduce the interest burden on business operators. The land lease fee is 1% per year (excluding VAT) of the land appraisal value set by SH Corporation. This structure allows long-term leasing (30 to 40 years) at affordable prices, enhancing the sustainability of the project.

Additionally, upon expiration of the project period, SH Corporation will purchase the buildings owned by the business operators based on the construction cost confirmed by SH Corporation. This structure alleviates the financial burden on private business operators and prevents risks related to the return of deposits to tenants.

An SH Corporation official stated, "By setting the rent for social housing at 80% or less of the surrounding market price, we expect to reduce the housing cost burden for low-income youth and newlyweds."

To lower the barriers for 'Vacant House Utilization Land-Lease Social Housing,' SH Corporation relaxed the scoring criteria for similar project performance and dedicated social housing personnel among the evaluation criteria, and plans to assist in reviewing and supplementing difficulties encountered during the preparation of project applications through prior consultations.

Kim Seyong, President of SH Corporation, said, "As an urban regeneration rental housing model that revitalizes vacant houses through public-private cooperation and supplies rental housing, we expect it to simultaneously achieve urban regeneration and job creation effects, bringing vitality to local communities."

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